Medicare Revises Hospitals’ Readmissions Penalties

Washington, DC, United States (KaiserHealth) – Medicare’s new readmission penalties for hospitals just got a bit tougher.

The Centers for Medicare & Medicaid Services has discovered errors in its initial calculations in August. As a result, 1,422 hospitals with comparatively high readmission rates will lose slightly more money than they were expecting, according to a Kaiser Health News analysis of the revised penalties. Fifty-five hospitals will lose less than were previously told.

The changes were tiny, averaging two-hundreds of a percent of a hospital’s regular Medicare reimbursements. The largest changes affect Florala Memorial Hospital in Florala, Ala., which will see its penalty increase from 0.62 percent to 0.73 percent of its reimbursements, and Western Pennsylvania Hospital in Pittsburgh, which will see its penalty drop from 0.51 percent to 0.4 percent.

“It looks this is just adjustments on the margins as opposed to wholesale change,” said Dr. Karen Joynt, a cardiologist at Brigham And Women’s Hospital in Boston and an instructor at Harvard Medical School. “For a few of them it might make a difference.”

The revised penalties are an unexpected twist in Medicare’s Hospital Readmission Reduction Program, created by the 2010 health care law to crack down on the high rates of return of patients. Nearly one in five Medicare patients return to the hospital within a month of discharge, costing the government an extra $17.5 billion in 2010.

Experts say many of these readmissions are unavoidable given the infirmity of the population, but others are due to surgical mistakes or lapses in patient care after people leave the hospital. A total of 2,217 hospitals are being punished in the first year of the program, which began Oct. 1. Of those, 307 will be docked the maximum amount: 1 percent of their regular Medicare reimbursements.

Overall, Medicare has estimated it will recoup about $280 million from hospitals where it determined too many heart attack, heart failure or pneumonia patients returned within 30 days.

The penalties are not popular among most hospitals since they don’t get any extra payments for efforts to reduce readmissions. In addition, the hospital industry has complained that Medicare doesn’t do an adequate job of distinguishing between necessary and planned readmissions and ones that could have been avoided.

Nonetheless, hospitals have been preemptively increasing their efforts to cut back on return customers. Some make sure patients get follow-up appointments and take their medication after they return home. Others send nurses to visit patients at high risk of return at home.

Medicare’s mistake occurred in its calculations of the penalties for hospitals, according to a notice the agency published Friday. Medicare said it would be basing the penalties on the readmission rates and reimbursements for patients who were discharged from July 2008 through June 2011. But the agency wrote that it “inadvertently” included Medicare claims before July 1, 2008, in its evaluations.

Dr. Atul Grover, the chief lobbyist for the Association of American Medical Colleges, called the correction “disconcerting, particularly with a policy that’s bad to begin with.”

Two hospitals that Medicare had announced it would not penalize will now lose 0.01 percent of their reimbursements after the recalculations. Those hospitals are Community General Hospital in Dilley, Texas, and Providence Willamette Falls Medical Center in Oregon City, Ore.

Kaiser Health News had earlier published the penalties for all hospitals and has updated our PDF chart and downloadable csv file with the previous and corrected readmission penalties.

jrau@kff.org

– Provided by Kaiser Health News.

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