Medicare Revises Hospitals’ Readmission Penalties

From the NAHC Report Article

CMS Toughens Penalties

Medicare’s new readmission penalties for hospitals just got a bit tougher. The Centers for Medicare & Medicaid Services (CMS) has discovered errors in its initial calculations in August, according to Kaiser Health News. 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, the agency reported.

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 returns to the hospital within a month of discharge, costing the government an extra $17.5 billion in 2010.

Kaiser health News reported that experts say many 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, it reported.

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.

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.