Biggest losers of readmission penalty: Big hospitals, safety nets

A new research letter in the Journal of the American Medical Association confirms that large, academic and safety-net hospitals will receive the biggest penalties for readmissions.

Researchers found that 40 percent of large hospitals will see big Medicare reimbursement cuts, compared with 28 percent of small hospitals, and 44 percent of major teaching hospitals will face high penalties, compared with 33 percent of nonteaching hospitals.

Similarly, 44 percent of safety nets will get steep reimbursement cuts, while only 30 percent of non-safety hospitals will be penalized.

Hospitals in large urban areas, such as the District of Columbia, Connecticut and New York will fare the worst. Meanwhile, small, community hospitals operating in more rural states, including Maine, Nebraska, Utah and South Carolina, will likely earn bonus payments from Medicare, FierceHealthFinance previously reported. In fact, the biggest bonus will go to Treasure Valley Hospital, a 10-bed facility in Idaho, which will see its Medicare reimbursement jump nearly 1 percent.

The authors questioned whether quality played a role in differences in hospital readmission rates and, instead, pointed to previous research that showed a link between severity of illnesses and socioeconomic factors and rehospitalization, MedPage Today reported.

For instance, a January study by the Commonwealth Fund suggested readmission penalties will hit safety nets hard because those hospitals treat a large share of patients who are low-income, uninsured and underinsured, as well as have higher rates of chronic health conditions, disability, mental illness and substance abuse.

The findings also echo concerns about how hospitals already under great financial pressure will absorb the additional payment cuts, Reuters noted.

"We want to create incentives but be aware some of these high rates are occurring in resource poor areas," Harlan Krumholz, of the Yale School of Medicine told Reuters.

For more:
- check out the JAMA research letter
- read the MedPage Today article
- here's the Reuters article