Medicare slaps two-thirds of US hospitals with readmission penalties

Two-thirds of the nation's hospitals will get hit with fines in the second round of Medicare's readmission penalties, according to data released Friday by the Centers for Medicare & Medicaid Services.

For the upcoming year, 2,225 of the nation's 5,700 hospitals will receive payment reductions totaling $227 million starting on Oct. 1. Of those hospitals, 18 hospitals will lose 2 percent of Medicare reimbursements, the top penalty, while 154 will lose 1 percent or more.

In the first round of penalties, almost 300 hospitals received the maximum fine--a 1 percent loss of their base Medicare payments, FierceHealthFinance previously reported.

This time around, 1,074 hospitals will receive higher penalties, including 283 hospitals not penalized in round one that will see Medicare payment reductions in the upcoming year, Kaiser Health News noted.

However, 1,371 hospitals will see a lower fine. And nationwide, total readmission penalties will fall $53 million to $227 million, down from the $280 million in total fines recouped during round one.

KHN highlighted Alegent Creighton Health Midlands Hospital in Papillion, Neb., as the hospital that will see the largest drop in fines as it goes from the maximum 1 percent fine in round one to no fine in round two.

The CMS data showed hospitals that treat large numbers of poor people took a major hit from fines for high readmissions in both rounds of penalties, KHN noted.

Such figures validate concerns from the Medicare Payment Advisory Commission. In a June report, MedPAC concluded readmission penalties levied against safety-net hospitals are too onerous and should be reversed, pointing out that low-income patients are harder to keep tabs on post-admission, because they often cannot afford medications or have easy access to physicians

For more:
- here's the CMS data (see FY 2014 IPPS Final Rule readmissions reduction data file)
- read the KHN article