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16-08-2012 | Article

Many hospitals to feel Medicare's reimbursement sting


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MedWire News: Hospitals in the USA are expected to lose a combined $ 280 million in Medicare reimbursements when a new rule governing readmissions goes into effect in October, a report says.

Under new Medicare "value-based purchasing" rules being implemented in October 2012, hospitals with high readmission rates for certain procedures and conditions will be penalized with lower reimbursement rates.

Conditions with specified processes that should be followed, according to Medicare rules published in The Federal Register, include acute myocardial infarction (AMI), heart failure, pneumonia, healthcare-associated infections, and surgeries.

Clinical process of care measures for AMI, for example, include fibrinolytic therapy delivered within 30 minutes of hospital arrival, primary percutaneous coronary intervention received within 90 minutes of hospital arrival, and prescribing aspirin at discharge.

Among the more than 2211 US hospitals that will lose a portion of their Medicare payments is Massachusetts General Hospital (MGH), recently ranked as the USA's top hospital, which will forfeit 0.5% of its Medicare payments, according to a report in Kaiser Health News.

"A total of 278 hospitals nationally will lose the maximum amount allowed under the health care law: 1 percent of their base Medicare reimbursements. Several of those are top-ranked institutions, including Hackensack University Medical Center in New Jersey, North Shore University Hospital in Manhasset, NY [New York], and Beth Israel Deaconess Medical Center in Boston, a teaching hospital of Harvard Medical School," the report says.

The penalties will be based on 30-day readmission rates from July 2008 through June 2011 for heart failure, AMI, and pneumonia. Future Medicare reimbursements to affected hospitals will have the specified penalty amount deducted from the total.

Medicare's inpatient prospective payment system normally takes into account labor and non-labor costs, the share of low-income patients treated, and the added costs of indirect medical education at teaching hospitals. However, while the penalties calculated were adjusted for severity of illness index at specific hospitals, Medicare did not take into account the socioeconomic background of patients, Kaiser's Jordan Rau reports.

A total of 1933 hospitals will be penalized by lesser amounts, and 1156 hospitals will not be penalized, says Rau.

By Neil Osterweil, MedWire Reporter