The federal government’s effort to penalize hospitals for excessive patient readmissions is ending its first decade with Medicare cutting payments to nearly half the nation’s hospitals, including 18 in the Cincinnati region. The program, created by the Affordable Care Act, has shown a reduction in readmissions without boosting patient deaths.
In its 10th annual round of penalties, Medicare is reducing its payments to 2,499 hospitals, or 47% of all facilities. The average penalty is a 0.64% reduction in payment for each Medicare patient stay from the start of October through September 2022. The fines can be heavy, averaging $217,000 for a hospital in 2018, according to Congress’ Medicare Payment Advisory Commission, or MedPAC.
Medicare estimates the penalties over the next fiscal year will save the government $521 million. Thirty-nine hospitals received the maximum 3% reduction, and 547 hospitals had so few returning patients that they escaped any penalty.
Most Cincinnati area hospitals are seeing smaller cuts in their payments this year. The exceptions include two facilities that are facing their biggest cuts since the program began: Mercy Health Jewish Hospital, which will see a cut of 0.9%, and Christ Hospital, with a cut of 0.3%.
The other area hospitals facing payment cuts are (in alphabetical order):
- Atrium Medical Center – 0.14%.
- Bethesda North – 0.41%.
- Fort Hamilton-Hughes – 0.24%.
- Good Samaritan – 0.6%.
- Jewish Hospital - Mercy Health – 0.9%.
- McCullough-Hyde Memorial – 1.15%.
- Mercy Health Anderson – 1.08%.
- Mercy Health Clermont – 0.86%.
- Mercy Health Fairfield – 0.72%
- Mercy Health West – 0.59%.
- St. Elizabeth Dearborn – 0.46%.
- St. Elizabeth Edgewood – 0.48%.
- St. Elizabeth Florence – 0.28%.
- St. Elizabeth Fort Thomas – 0.56%.
- University of Cincinnati Medical Center – 0.04%.
- West Chester Hospital – 0.04%.
To see how readmission rates have changed over time or to see rates for hospitals outside the area, click on this link.
More than 2,200 hospitals nationally are exempt from the program because they specialize in children, psychiatric patients or veterans. Rehabilitation and long-term care hospitals are also excluded from the program, as are critical access hospitals, which are treated differently because they are the only inpatient facility in an area.
Of the 3,046 hospitals for which Medicare evaluated readmission rates, 82% received some penalty, nearly the same share as were punished last year.
The Hospital Readmissions Reduction Program began in October 2012 as an effort to make hospitals pay more attention to patients after they leave.
Readmissions occurred with regularity – for instance, nearly a quarter of Medicare heart failure patients ended up back in the hospital within 30 days in 2008 – and policymakers wanted to counteract the financial incentives hospitals had in getting more business from these boomerang visits.
MedPAC has found readmission rates declined from 2008 to 2017 after the overall health conditions of patients were taken into account. Heart failure patient readmission rates dropped from 24.8% to 20.5%, heart attack patient rates dropped from 19.7% to 15.5%, and pneumonia patient rates decreased from 20% to 15.8%, according to the most recent MedPAC analysis. Readmission rates for chronic obstructive pulmonary disease, hip and knee replacements, and conditions that are not tracked and penalized in the penalty program also decreased.
The program “has been successful in reducing readmissions, without causing an adverse effect on beneficiary mortality,” MedPAC wrote. The commission added that untangling the exact causes of the readmission rates was complicated by changes in how hospitals recorded patient characteristics in billing Medicare and an increase in patients being treated in outpatient settings. Those factors made it difficult to determine the magnitude of the readmission rate drop due to the penalty program, MedPAC said.
The current penalties are calculated by tracking Medicare patients who were discharged between July 1, 2017, and Dec. 1, 2019. Typically, the penalties are based on three years of patients, but the Centers for Medicare & Medicaid Services excluded the final six months in the period because of the chaos caused by the pandemic as hospitals scrambled to handle an influx of COVID-19 patients.
Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.
KHN reporter Jordan Rau was the primary contributor to this report.
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