CMS to Fine Hospitals $227M for High Readmissions

CMS will fine hospitals a total of $227 million for greater-than-expected readmission rates for the second year of the Hospital Readmissions Reduction Program, according to a Kaiser Health News report.

The program, which began Oct. 1, 2012, penalizes hospitals for heart attack, heart failure and pneumonia 30-day readmission rates for Medicare patients that are greater than predicted, after adjusting for patients' illness severity.

The second round of penalties is based on readmissions of Medicare patients discharged between July 2009 and June 2012. The maximum penalty will increase from 1 percent this fiscal year to 2 percent for next fiscal year, which begins Oct. 1.

The penalties will apply to every payment for a Medicare patient stay from Oct. 1, 2013 through Sept. 30, 2014, meaning hospitals can only estimate the total amount of fines they will owe, according to the report.

Here are some other key facts about the second year of readmission penalties from Kaiser Health News' analysis of CMS data:

•    The $227 million total penalties are $53 million less than the current fiscal year's penalties. The average fine decreased from 0.42 percent this year to 0.38 percent for the second year.

•    The number of hospitals that will be penalized beginning Oct. 1 — 2,225 — is similar to the number being penalized in the program's first year — 2,213, which is roughly two-thirds of eligible hospitals, according to the report.

•    A total 1,154 hospitals will receive no fines as of Oct. 1.

•    Of the 2,225 hospitals that will have Medicare payments reduced, 18 will have payments reduced by the full 2 percent and 154 hospitals will have payments reduced by 1 percent or more.

•    While 1,371 hospitals will be fined less than they were in the program's first year, 1,074 hospitals will be fined more.

•    All states except Maryland, which CMS exempted due to its reimbursement system under a federal waiver, will pay a fine beginning Oct. 1.

More Articles on Hospital Readmissions:

Study: EMR's Risk Assignment Helps Cut Heart Failure Readmissions 19%
Bronx Collaborative Finds Success With Model-Based Readmissions Intervention
Readmissions Dilemma: Admit or Observe?

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