Nearly 2,600 U.S. hospitals will see their Medicare reimbursement payments slashed as a result of having too many patients unnecessarily be readmitted within 30 days of discharge, as per the federal government’s standards.
A report this week from Kaiser Health News stated, “Medicare cut payments to 2,583 hospitals Tuesday, continuing the Affordable Care Act’s eight-year campaign to financially pressure hospitals into reducing the number of patients who return for a second stay within a month. The severity and broad application of the penalties, which Medicare estimates will cost hospitals $563 million over a year, follows the trend of the past few years. Of the 3,129 general hospitals evaluated in the Hospital Readmission Reduction Program, 83 percent received a penalty, which will be deducted from each payment for a Medicare patient stay over the fiscal year that begins today.”
The Hospital Readmissions Reduction Program (HRRP) is a Medicare value-based purchasing program that reduces payments to hospitals with excess readmissions. The fines for failure to meet the criteria of the Centers for Medicare & Medicaid Services (CMS) focus on six conditions: heart attack, congestive heart failure, pneumonia, chronic obstructive pulmonary disease (COPD), elective hip and knee replacements, coronary artery bypass graft surgery, and acute myocardial infarction. This year’s penalties are based on discharges from July 1, 2015, to June 30, 2018.
As noted by KHN, Medicare counts the readmission of patients who returned to a hospital within 30 days even if that hospital is not the one that originally treated them. In those cases, the penalty is applied to the first hospital rather than the one that took the readmitted patient.
There has been much debate over if the program has been effective or not. As KHN noted, “The hospital industry and some academics have raised concerns that some hospitals may be avoiding readmitting patients who require additional inpatient care out of fear of the financial repercussions, while others have said the program is not showing major benefits.”
The penalties are based on the frequency of readmissions of Medicare patients who had originally been treated for the six conditions, and the maximum reduction for any hospital is capped at 3 percent.
KHN’s analysis also revealed that the average penalty will be a 0.71 percent decrease in payment for each Medicare patient who leaves the hospital over the next year. What’s more, 1,177 hospitals received a higher penalty than they did last year; 1,148 hospitals received a lower one than last year; 194 hospitals that were not penalized last year are being punished this year; and 56 hospitals received the maximum penalty amount.
Not all U.S. hospitals are included in the program; Medicare exempted more than 2,100 this year either because they had too few cases to judge; were veterans hospitals, children’s hospitals, psychiatric hospitals or were critical-access hospitals, which are the only hospitals within reach of some patients, according to KHN.
