By Jordan Rau NOVEMBER
2, 2020
Nearly half the nation’s
hospitals, many of which are still wrestling with the financial fallout of the
unexpected coronavirus, will get lower payments for all Medicare patients
because of their history of readmitting patients, federal records show.
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Historical Data
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The penalties are the
ninth annual round of the Hospital Readmissions Reduction Program created as
part of the Affordable Care Act’s broader effort to improve quality and lower
costs. The latest penalties are calculated using
each hospital case history between July 2016 and June 2019, so the flood of
coronavirus patients that have swamped hospitals this year were not included.
The Centers for Medicare
& Medicaid Services announced in September it may suspend the
penalty program in the future if the chaos surrounding the pandemic, including
the spring’s moratorium on elective surgeries, makes it too difficult to assess
hospital performance.
For this year, the
penalties remain in effect. Retroactive to the federal fiscal year that began
Oct. 1, Medicare will lower a year’s worth of payments to 2,545 hospitals, the
data show. The average reduction is 0.69%, with 613 hospitals receiving a
penalty of 1% or more.
Out of 5,267 hospitals in
the country, Congress has exempted 2,176 from the threat of penalties, either
because they are critical access hospitals — defined as the only inpatient
facility in an area — or hospitals that specialize in psychiatric patients,
children, veterans, rehabilitation or long-term care. Of the 3,080 hospitals
CMS evaluated, 83% received a penalty.
The number and severity
of penalties were comparable to those of recent years, although the number of
hospitals receiving the maximum penalty of 3% dropped from 56 to 39. Because the penalties are
applied to new admission payments, the total dollar amount each hospital will
lose will not be known until after the fiscal year ends on July 30.
“It’s unfortunate that
hospitals will face readmission penalties in fiscal year 2021,” said Akin
Demehin, director of policy at the American Hospital Association. “Given the
financial strain that hospitals are under, every dollar counts, and the impact
of any penalty is significant.”
The penalties are based
on readmissions of Medicare patients who initially came to the hospital with diagnoses of congestive heart
failure, heart attack, pneumonia, chronic obstructive pulmonary disease, hip or
knee replacement or coronary artery bypass graft surgery. Medicare counts as a
readmission any of those patients who ended up back in any hospital within 30
days of discharge, except for planned returns like a second phase of surgery.
A hospital will be
penalized if its readmission rate is higher than expected given the national
trends in any one of those categories.
The industry has
disapproved of the program since its inception, complaining the measures aren’t
precise and it unfairly punishes hospitals that treat low-income patients, who
often don’t have the resources to ensure their recoveries are successful.
Michael Millenson, a
health quality consultant who focuses on patient safety, said the penalties are
a useful but imperfect mechanism to push hospitals to improve their care. The
designers of the penalty system envisioned it as a way to neutralize the
economic benefit hospitals get from readmitted patients under Medicare’s
fee-for-service payment model, as they are otherwise paid for two stays instead
of just one.
“Every industry complains
the penalties are too harsh,” he said. “if you’re going to tell me we don’t
need any economic incentives to do the right thing because we’re always doing
the right thing — that’s not true.”
Jordan Rau: jrau@kff.org, @JordanRau
https://khn.org/news/medicare-fines-half-of-hospitals-for-readmitting-too-many-patients/
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