Monday, 10 August 2015 03:45

Readmissions Still Costing Providers Dearly

Written by Mark Spivey

American hospitals were hit with a whopping $420 million in funding losses last year due to the lingering issue of readmissions, according to a recent Kaiser Health News analysis of Centers for Medicare & Medicaid Services (CMS) records.

Last year marked the fourth straight year of federal readmission penalties, which affected nearly 2,600 hospitals across the nation; the Hospital Readmissions Reduction Program, as it is called, was created as a provision of the Patient Protection and Affordable Care Act. All of those facilities will receive reduced payments for every Medicare patient receiving care, readmitted or not, starting in October.

The Program has proven to be an effective enforcement tool – nationally, readmission rates have dropped since it was introduced, Kaiser Health noted – but roughly one of every five Medicare patients sent to a U.S. hospital winds up returning within one month. What’s more, Kaiser’s report on its analysis of CMS records indicated, more than 90 percent of the hospitals penalized for readmissions in the past year had also been punished the year before.


The readmission penalties came as the result of issues with care for Medicare patients originally hospitalized for one of five conditions: heart attack, heart failure, pneumonia, chronic lung problems, or elective hip or knee replacements. For each hospital, Kaiser Health reported, Medicare determined what it thought the appropriate number of readmissions should be based on the mix of patients and how the hospital industry performed overall – if the number of readmissions was above that projection, Medicare fined the hospital.

In this round of penalties, the average Medicare payment reduction is 0.61 percent per patient stay, but 38 hospitals will receive the maximum cut of 3 percent, the KHN analysis revealed. A total of 506 hospitals, including those facing the maximum penalty, will lose 1 percent of their Medicare payments or more.

The lower payments will affect three-quarters of hospitals or more in nearly a fifth of U.S. states, including Alabama, Connecticut, Florida, Massachusetts, New Jersey, New York, Rhode Island, South Carolina, Virginia, and the District of Columbia. Kaiser Health also found that fewer than a quarter of hospitals face punishments in Idaho, Iowa, Kansas, Montana, Nebraska, North Dakota, and South Dakota.

Most of the 2,232 U.S. hospitals spared penalties this year were excused not because Medicare found readmissions to be sufficiently infrequent, but because they were automatically exempted from being evaluated, according to Kaiser Health News — either because they specialized in certain types of patients, such as veterans or children, because they were critical access hospitals, or because they had too few cases for Medicare to accurately assess.

Mark Spivey is a national correspondent for He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

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Last modified on Wednesday, 26 August 2015 07:54