MedPAC: Hospitals treating poor take unfair readmissions hit

The Medicare Payment Advisory Commission has concluded that the financial penalties for readmissions levied against hospitals that serve the poor are too onerous and should be reversed, reported Kaiser Health News.

According to the MedPAC report, low-income patients were harder to keep tabs on post-admission, because they often cannot afford medications or have easy access to physicians. As a result, MedPAC found that hospitals with a Medicare patient load that was below 3 percent low income received an average readmission penalty of 0.21 percent of its Medicare payments. But hospitals where more than 18 percent of the Medicare patients were low-income had an average penalty of 0.45 percent.

The penalties are tough on hospitals that treat a large proportion of poor patients, as they often operate on slimmer margins that facilities treating wealthier patients.

"The idea is right, but the implementation has been greatly flawed by penalizing hospitals that take care of the most vulnerable patients," Atul Grover, chief public policy officer at the Association of American Medical Colleges, told Kaiser Health News.

The MedPAC reported recommended that moving forward, penalty levels be computed in part by comparing hospital readmission rates between facilities with similar levels of poor Medicare patients.

The Centers for Medicare & Medicaid Services did not comment on the most recent MedPAC report.

To learn more:
Read the Kaiser Health News article
Read the MedPAC report (.pdf)

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