Bigger readmissions fines hit hospitals

August 5, 2013 in Medical Technology

By Jordan Rau, KHN Staff Writer

Medicare will levy $227 million in fines against hospitals in every state but one for the second round of the government’s campaign to reduce the number of patients readmitted within a month, according to federal records released Friday.

Medicare identified 2,225 hospitals that will have payments reduced for a year starting on Oct. 1. Eighteen hospitals will lose 2 percent, the maximum possible and double the current top penalty. Another 154 will lose 1 percent or more of every payment for a patient stay, the records show. Hospitals that treated large number of low income patients were more likely to be penalized than those treating the fewest impoverished people.

The penalty program, which began in October 2012, is among the toughest of Medicare’s efforts to pay hospitals for the quality of their performances rather than merely the number of patients they treat. Unlike other new programs created by the federal health law, the readmissions program offers hospitals no rewards for improvements or the opportunity to opt out.

[See also: EMRs shown to reduce heart readmissions.]

While the overall number of penalized hospitals stayed about the same — with Medicare penalizing two-thirds of eligible hospitals — there have been considerable shifts among facilities. A Kaiser Health News analysis found that 1,371 hospitals are receiving a lower fine. Alegent Creighton Health Midlands Hospital in Papillion, Neb., will see the biggest penalty decrease, going from the maximum 1 percent fine in the current year to no fine for the second year. Nationwide, the average hospital fine will be slightly smaller, and the national total will be $53 million less than this year’s fines.

Medicare is increasing penalties for 1,074 hospitals. A total of 283 hospitals not fined in the current year, including Stanford Hospital in California and Johns Hopkins’ Sibley Memorial Hospital in Washington, D.C., will be penalized in the new round.

The October penalties will be applied on at least four out of five hospitals in Alabama, Arkansas, Florida, Kentucky, Illinois, Massachusetts, New York, New Jersey, Tennessee, West Virginia and the District of Columbia, the KHN analysis found. Maryland, which Medicare exempted from the program because it has a unique reimbursement system designed under a federal waiver, is the only state without a hospital getting a fine.

[See also: El Camino slashes hospital readmissions.]

“The recognition of just how complex and difficult of a problem this is is growing as people are starting to grapple with it on the ground,” said Dr. Karen Joynt, a Boston cardiologist and Harvard researcher. “It’s going to take creativity and innovation and most importantly reaching outside the hospital walls.”

Fighting Incentives To Do More

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