Update: Centers for Medicare and Medicaid Services (CMS) released a revised list of hospitals’ penalties for 2013 days before the Readmissions Reduction Program began October 1. In the notice, it cited a calculation error as the cause of the mistake. The organization inadvertently included Medicare inpatient claims with discharge dates occurring prior to July 1, 2008 when it calculated the readmissions adjustment factors. Data used is supposed to be limited to the timeframe of July 1, 2008 through June 30, 2011. As a result of the correction, penalties for 55 hospitals were reduced and penalties for 1,422 hospitals increased slightly for 2013.
On Monday, hospitals across the United States faced the launch of an initiative that will impose financial penalties for Medicare readmission rates that exceed national averages. The Hospital Readmissions Reduction Program, intended to compel hospitals to improve quality of care beyond acute events, imposes penalties ranging from .01 percent to 1 percent of base operating DRG payments.
Mercy Hospital and Medical Center in Chicago was among 278 hospitals hit with the maximum .01 percent penalty for 2013. For Mercy, with its annual revenue of $260 million, the penalty amounts to about $400,000.
Of the 278 hospitals penalized at the maximum level:
- 85 are independent, not-for-profit facilities
- 88 are part of not-for-profit health systems
- 56 are for-profit facilities
- 49 are government owned facilities
Improvement will not necessarily guarantee safety from future penalties. It depends largely on the way each hospital’s program is structured, as payment cuts are assessed using national averages of readmission for each condition. Consequently, the thresholds for penalties are subject to constant change.
Those opposed to the initiative argue that penalties could be the last straw for hospitals that are already struggling financially, many of them stand-alone hospitals that treat vulnerable patient populations. Others contend that hospitals should not be responsible for decisions made by patients after their release – for example, making a follow-up visit to their primary care physician.
Proponents of the initiative are adamant that establishing and maintaining a patient-centered focus on the transition of care from an inpatient to outpatient setting can reduce readmission rates for patients in the long run.
Healthcare.gov has further information on the Hospital Readmission Reduction Program. Do you think the program will achieve success in decreasing readmission rates, or will the penalties ultimately damage our health care system?