CMS readjusts readmission penalties after 'technical error'

A little bad math is going to cost some hospitals even more. The Centers for Medicare & Medicaid Services today issued a notice, saying it discovered errors in its initial calculations for readmission penalties that went into effect this week.

Although the calculation is a change of only two-hundreds of a percent of regular Medicare reimbursements, it means that 1,422 hospitals with high readmission rates will lose slightly more payments than they initially thought, Kaiser Health News reported. However, 55 hospitals will lose less than initially thought.

Under the Hospital Readmission Reduction Program, CMS is reducing Medicare payments to hospitals with excess readmissions for heart attack, heart failure or pneumonia of up to 1 percent. Medicare said it would base the penalties for patients who were discharged from July 2008 through June 2011, Kaiser Health News noted, but CMS said the August final rule included Medicare claims before that period and now corrects the "technical errors," according to the CMS statement.

The recalculations means that Florala (Ala.) Memorial Hospital will be penalized up to 0.73 percent of its reimbursements, up from the original 0.62 percent, for example. And two hospitals--Community General Hospital in Dilley, Texas, and Providence Willamette Falls Medical Center in Oregon City, Ore.--which Medicare said it would not penalize will now lose out on 0.01 percent, the news outlet reported.

The readjusted calculations follow discontent from many providers, who already view the readmission rates as slightly skewed. For example, the American Hospital Association has been very vocal in the lack of distinction between avoidable and unavoidable readmissions, noting that some patients are planned to come back to the hospital, as well as a lack of considered community factors, such as clinical and pharmacy resources in the area.

The mistake could add fuel to the existing fire that is Medicare reimbursements.

For more information:
- read the Kaiser Health News article
- check out the CMS announcement