Skip to main content

04-11-2012 | Article

CMS finalizes tally for high hospital readmission penalties


Medicare Readmissions Reduction Program

medwireNews: A majority of hospitals across the nation will face fines for Medicare expenses brought on by patients returning to hospital soon after treatment, says a Kaiser Health News (KHN) analysis of the Medicare Readmissions Reduction Program.

A total of 2217 hospitals ‑ or roughly two-thirds of all US facilities ‑ will have their Medicare reimbursements reduced as a penalty for having too many patients with heart attacks, heart failure, or pneumonia return to hospital within 30 days.

For 304 hospitals, the Centers for Medicare and Medicaid Services (CMS) will impose the maximum penalty ‑ a 1% reduction in all of Medicare's reimbursements for the fiscal year beginning October 1, 2012.

The KHN analysis identified that safety-net hospitals in New Jersey, New York, Arkansas, Mississippi, and the District of Columbia were the predominant type of facility most severely hit by the penalties. These hospitals provide significant care to low-income, uninsured, and vulnerable populations.

Dividing the hospitals into quartiles according to the number of poor patients they treat, 12% of those in the highest quartile received the maximum penalty, while 20% avoided any penalty.

Conversely, 7% of hospitals in the lowest quartile incurred the maximum penalty, while 33% avoided any penalty.

Medicare's Hospital Readmission Reduction Program is part of the 2010 health system reform law that was created to stem the large number of patients who return to hospitals soon after discharge. In 2010, 20% of Medicare patients returned to hospitals within a month of discharge, which is estimated to have cost the government an extra $ 17.5 billion.

The CMS therefore initiated the readmissions-penalty policy to stem costly yet avoidable consequences of poor quality care and excessive spending at hospitals.

Hospitals that surpass an acceptable limit of 30-day hospital readmissions face up to 1% in reduced Medicare payments. The infractions that are currently being imposed equate to a total of $ 300 million for the 2013 fiscal year.

Under the Affordable Care Act, the CMS compared a hospital's readmission performance to the national average for patients treated for three acute health conditions: heart attack, heart failure, and pneumonia. By 2015, the review will also include readmissions for chronic obstructive pulmonary disease, coronary bypass surgery, coronary angioplasties, and other vascular conditions.

By Peter Sergo, medwireNews Reporter