CMS penalizes 2,273 hospitals for high readmissions: 6 things to know

CMS evaluated two and a half years of readmission cases for Medicare patients through the Hospital Readmissions Reduction Program and penalized 2,273 hospitals that had a greater-than-expected rate of return, according to a Nov. 1 report from Kaiser Health News.

The average payment reduction was 0.43 percent, the lowest rate reduction since 2014. Reductions will be applied to each Medicare payment to the affected hospitals from Oct. 1 through next September. It is expected to cost the hospitals $320 million over the 12-month period. 

The report notes that the COVID-19 pandemic caused turmoil in hospitals and that CMS decided to exclude the first half of 2020 from the report due to the chaos. CMS also excluded Medicare patients who were readmitted with pneumonia across all three years because of the difficulty distinguishing them from COVID patients. 

Some hospitals will see their penalties greatly reduced from last year. The penalty on Athens, Ga.-based St. Mary's Hospital is dropping from 2.54 percent to 0.06 percent. Lexington, Ky.-based Saint Joseph East received a maximum penalty of 3 percent last year, which was reduced to 0.78 percent from the current analysis. Flemington, N.J.-based Hunterdon Medical Center's rate went from 2.29 percent to 0.12 percent, according to the report. 

  • Forty-three percent of the nation's 5,236 hospitals were penalized.
  • All but 770 penalized hospitals were automatically exempted.
  • The 2,193 exempted hospitals specialize in pediatrics, psychiatry, or veterans care. 
  • Rehabilitation, long-term, and critical access hospitals were also excluded from the program. 
  • Maryland hospitals were exempted due to a special payment arrangement with Medicare. 
  • Seventy-five percent of Medicare-assessed hospitals were penalized. 

"Covid has been a tremendously disruptive force for all aspects of health care, most certainly CMS' quality measurement programs. It's probably going to be a couple of volatile years for readmission penalties," Akin Demehin, senior director of quality and patient safety policy at the American Hospital Association, told Kaiser Health News.

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