Thousands of hospitals penalized for high readmission rates

October 7, 2014

A record number of hospitals received cuts to their Medicare reimbursements for failing to meet targets on patient hospital readmissions, according to data released by CMS.

A record number of hospitals received cuts to their Medicare reimbursements for failing to meet targets on patient hospital readmissions, according to data released by the Centers for Medicare and Medicaid Services (CMS).

Nearly 80% of the nearly 3,400 hospitals judged on readmission rates received financial penalties, with 39 hospitals receiving the highest penalty, according to a report in Kaiser Health News. Every hospital in New Jersey and the majority of facilities in 28 states will be fined this year, according to the Kaiser report.

The penalties are part of CMS’s Hospital Readmissions Reduction Program, a provision of the Affordable Care Act that aims to encourage hospitals to improve transitions of care with other providers after patients are released. Hospitals are tracked on their rate of readmissions within 30 days of discharge for some specific conditions, including heart failure, heart attack, pneumonia, elective knee and/or hip replaces and chronic obstructive pulmonary disease, chronic bronchitis and other lung ailments. The penalties are levied as a reduction in Medicare reimbursements, ranging from less than 1% to 3% for hospitals with the highest readmission rates.

Preventable hospital readmissions are a major factor in the high cost of healthcare, and contribute to a large portion of Medicare’s expenses. In 2013, nearly 18% of hospitalized Medicare patients were readmitted within a month, according to Kaiser Health News. It’s estimated that $17 billion is spent on avoidable patient readmissions.

Community factors may be linked to hospital readmission rates, according to a study published earlier this year in Health Services Research. Researchers examined 4,073 hospitals with publicly reported 30-day readmission rates for patients discharged from July 1, 2007, to June 30, 2010, with acute myocardial infarction, heart failure, or pneumonia. They linked these to publicly available county data.

The study found that 58% of national variation in hospital readmission rates was explained by the county in which the hospital was located. Several county characteristics-including access to care and poverty rates-were found to be independently associated with higher readmission rates. These characteristics explained almost half of the variation across counties, the study found.

More than 1,400 hospitals are exempt from the program. They include cancer and critical care hospitals.