New CMS policy cuts readmission fines for safety-net, teaching, rural hospitals

A 2019 fiscal year change in CMS policy resulted in a drop in readmission fines for academic, safety-net and rural hospitals, according to a new study published in JAMA Internal Medicine.

The study analyzed how the recent change, which separates hospitals into five peer groups based on the proportion of patients they serve who are dually eligible for Medicare and Medicaid, affected readmission penalties at 3,049 hospitals.

The changes to the CMS program were made to address complaints from safety-net hospitals, which argued they were unfairly penalized because of their complex patient case mix.

Due to the changes, the study found that 44.1 percent of teaching hospitals and 43.7 percent of rural hospitals had a lower penalty this year than last year.

The average penalty for teaching hospitals is expected to decrease from $287,268 to $283,461. For rural hospitals, the average penalty is estimated to drop from $55,268 to $53,633.

Additionally, as a whole, penalties for the hospitals serving the highest amount of poor patients are estimated to decline by more than $22 million in total.

The study authors noted that the average penalty is an estimate because some hospitals are still reporting fiscal year 2019 claims.

Read the full study here.


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