CMS Revises Hospitals' Readmission Penalties for the Second Time

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CMS has once again revised penalties for hospitals under its Hospital Readmissions Reduction Program, which cuts hospitals' Medicare payments up to 1 percent for higher-than-expected 30-day readmission rates for heart attack, heart failure and pneumonia patients, according to a Kaiser Health News report.

The penalties are based on discharges from July 1, 2008, to June 30, 2011. Medicare initially released penalties for hospitals in August, then revised them at the end of September after finding errors in its calculations. This second revision corrects technical errors resulting from CMS' failure to include all Medicare inpatient claims in its calculations, according to a CMS correction document.

The corrections decreased penalties for 1,246 hospitals and increased penalties for 226 hospitals, resulting in a total $280 million in penalties — $10 million less than previously calculated, according to the report.

Here are some other key findings from a Kaiser Health News analysis of the new data:

•    On average, payments changed 0.03 percent from the previously released penalties.
•    The largest decrease in penalties occurred for St. Claire Regional Medical Center in Morehead, Ky., with a drop from 0.93 percent to 0.72 percent of Medicare payments.
•    LaSalle General Hospital in Jena, La., had the largest increase in penalties, rising from 0.65 percent to 0.84 percent.
•    The penalties for 329 hospitals that were changed in September are now back to their original level announced in August.
•    Thirty-one fewer hospitals face the maximum penalty, bringing the total number of hospitals losing 1 percent of Medicare payments to 276.
•    Three hospitals' penalties were dropped completely, bringing the total number of penalized hospitals to 2,213 — about two-thirds of hospitals reviewed, according to the report.

The penalties, which apply to the fiscal year ending in September, are capped at 1 percent of Medicare payments this year, but will increase to 2 percent beginning in October and 3 percent in 2014.

More Articles on the Hospital Readmissions Reduction Program:

CMS Miscalculates Readmissions Rates, More Than 1K Hospitals to Face Higher Penalties
MedPAC: 67% of Hospitals Face Readmissions Penalty

High Readmissions Cost More Than 2k Hospitals $280M in Medicare Funds

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