Half of US hospitals face readmission penalties

Most hospitals will face some sort of Medicare penalty for excessive 30-day readmissions, losing a combined $420 million in the fourth year of the federal readmission reduction program, according to a Kaiser Health News analysis.

Beginning in October, 2,592 hospitals will receive lower payments for Medicare patients that stay in the hospital, whether or not they are readmitted, according to KHN. The fines are based on readmissions between July 2011 and June 2014 for Medicare patients who were hospitalized due to a heart attack, heart failure, pneumonia, chronic lung problems or elective hip or knee replacements.

The KHN analysis found that Medicare fined a hospital if it had a higher number of readmissions than the agency deemed appropriate based on the hospital's mix of patients and how the hospital industry performed overall.

The report also reveals that: 

  • The average Medicare payment reduction is 0.61 percent per patient stay
  • Thirty-eight hospitals will receive the maximum cut of 3 percent
  • A total of 506 hospitals will lose 1 percent or more of their Medicare payments
  • All but 209 of the hospitals penalized in this round were also punished last year

The lower payments will impact three-quarters of hospitals in Alabama, Connecticut, Florida, Massachusetts, New Jersey, New York and Rhode Island, according to the analysis.

The majority of the 2,232 hospitals that escaped Medicare penalties were automatically exempt because they specialize in certain types of patients, were designated as critical access hospitals or didn't have enough cases for an accurate assessment, the article said.

Although hospitals have been lobbying for changes in the Hospital Readmissions Reduction Program to penalties for readmission factors beyond their control, the Centers for Medicare & Medicaid services said in a final rule released last week that it would not make unilateral changes in the program because some safety-net hospitals are able to keep readmissions rates low.

The agency said in the rule that it doesn't want to hold hospitals to different standards for the outcomes of their patients of low sociodemographic status because it does't want to "mask potential disparities or minimize incentives to improve the outcomes of disadvantaged populations."

To learn more:
- read the KHN analysis
- here's the final rule

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