2013 Medicare Readmission Penalties

The 2013 Medicare Readmission Penalties are representative of a new health-quality ranking policy intended by the Federal Government to sanction hospitals to reduce avoidable hospital readmissions rates. These are penalties included in the Affordable Care Act with the explicit rationale to penalize hospitals with excess readmissions (above expected rates) for targeted conditions (such as heart attack, heart failure and pneumonia). Facilities are penalized to pay up when they have too many of these “bounce-backs”, when patients have to be readmitted within 30 days after an inpatient stay, an underlying implication of an inordinately uneconomical and uncoordinated system. This is a health metric supported by regulators at the Center for Medicare and Medicaid Services (CMS) to pressure hospitals to lower the number of preventable admissions. The maximum readmission penalty is limited to 1 percent of total Medicare inpatient reimbursement revenue in 2013, increasing to 2 percent in 2014 and topping out at 3 percent in 2015. The penalties are considered as added impetus for follow through and good healthcare management practice, a benefit metric acknowledged by Coy Smith, vice president for in-patient care services and chief nursing officer at Wilmington’s St. Francis Hospital.

What do these penalties signify for patients?

What these penalties signify for patients is better healthcare services as hospitals are made to take wider responsibility for patients once they leave. These penalties are a part of the Medicare Hospital Readmissions Reduction Program which originated in the Health Care Reform Law and provides incentives for providers to reduce readmissions. With these penalties in place hospitals are starting to implement new protocols and processes to prevent readmissions. There are support strategies being introduced, which are helping hospitals to examine their current rates of readmissions; to better assess and prioritize improvement opportunities, to develop action plans of strategies to implement and to effectively monitor progress of patients each step of the way.

What do these penalties signify for the healthcare industry?

Some experts have argued the penalties are not fair and balanced, especially for hospitals that treat large numbers of low-income patients with higher readmission rates.  There are safety nets in place for providers and teaching hospitals, which are not subject to penalties and are supported to do as well or better to reduce readmission rates.  Also, there is a $500 million allocation in the healthcare law for hospitals to take advantage of HCO partnerships and QIOs interventions, as resources to help lower the proportion of re-hospitalization rates.

Click here to view the 2013 Medicare Readmissions Penalties By Hospital.

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