Medicare Penalizes Hospitals For High Readmission Rates

Lonely old asian patient on patient bed in hospital

Posted By: Ct Health I Team November 6, 2020

By Cara Rosner

Most Connecticut hospitals will lose some of their Medicare reimbursement payments over the next year as penalties for having too many readmitted patients, according to new data from the Centers for Medicare and Medicaid Services (CMS).

Statewide, 25 of the hospitals evaluated – or 89% – will have reimbursements reduced, to varying degrees, in the 2021 fiscal year that started Oct. 1, according to a Kaiser Health News analysis of CMS data.

Nationwide, almost half of hospitals, or 2,545 of them, will have their Medicare reimbursements cut, according to Kaiser Health News. The latest penalties were calculated using data from June 2016 through June 2019, meaning the influx of patients to hospitals seen amid the pandemic didn’t factor in.

iStock Photo.

Twenty-five hospitals are being penalized for high rates of patients who are readmitted within one month of discharge.

CMS has been imposing reimbursement reductions since the 2013 fiscal year, to penalize hospitals that have high rates of patients who are readmitted within one month of being discharged. The penalties were enacted under the Affordable Care Act.

This year’s penalties come as many hospitals already face financial hardship from the pandemic.

“We’re not really sure why they (CMS) chose to still go through with the readmission criteria,” said Dr. Mary Cooper, chief quality officer and senior vice president for clinical affairs at the Connecticut Hospital Association (CHA). Levying penalties at this time “feels insensitive” as hospitals continue to be front-line responders to the COVID-19 crisis, she said.

But hospitals continuously are working to improve readmissions rates, Cooper said.

“We always want to make it better,” she said.

In partnership with Unite Us and United Way’s 2-1-1 information line, the hospital association this year began rolling out programs that connect hospitals with community-based organizations, with the goal of improving care coordination, Cooper said. Hospitals are being given tools that help them assess “other factors that may be affecting their [patients’] health outcomes,” she said, such as social, economic and genetic factors.

The program makes it easier to refer patients to organizations such as food pantries, housing agencies, transportation authorities and other services that can affect patients’ health outcomes once they leave the hospital, Cooper said. Those agencies also can report back to the hospitals.

“This year, more than ever, there’s been such a need for

[coordinated care]

. The hospitals were just so happy to implement that; we have tremendous buy-in. We’ve never had access to that kind of closed-loop referral before.”

— Dr. Mary Cooper

So far, about one third of hospitals statewide are part of the program, and it is slated to be implemented at all hospitals by the end of 2021, Cooper said. These efforts, though, likely won’t be reflected in readmissions data for a few years, she added.

This year, no Connecticut hospitals received the maximum penalty rate of 3%, but three will lose more than 2% of their Medicare reimbursements. They are: Manchester Memorial Hospital, at 2.89%; Bridgeport Hospital, at 2.62%; and Rockville General Hospital, at 2.02%.

Most hospitals in the state – 20 of them – are losing less than 1% of their reimbursements. They include: Danbury Hospital at 0.39%, Norwalk Hospital at 0.92%, Greenwich Hospital at 0.79%, St. Vincent’s Medical Center in Bridgeport at 0.72%, Griffin Hospital in Derby at 0.33%, Middlesex Hospital at 0.88%, and Charlotte Hungerford Hospital in Torrington at 0.36%.

Stamford Hospital, which for two years in a row was not penalized, will see a 0.07% reduction.

Among the state’s largest hospitals, Hartford Hospital is losing 0.90% of its reimbursement, Yale New Haven Hospital, 0.70% and St. Francis Hospital and Medical Center, 0.50%.

Three hospitals received no penalty: Hebrew Home and Hospital Inc. in West Hartford, Masonicare Health Center in Wallingford, and Sharon Hospital.

Since the program’s inception, most Connecticut hospitals have gotten penalties each year.

“It always concerns me when we have a situation where it’s same story, different year; and that’s what’s we’re having here,” said Lisa Freeman, executive director of the Connecticut Center for Patient Safety.

That shows, she said, that the penalties aren’t having the intended effect of reducing admissions in a meaningful way. Many hospitals are likely just budgeting the penalties into their cost of doing business, she said.

Some hospitals are making strides, but others have a long way to go, Freeman said. A big part of the problem, she said, is poor coordination of care once patients leave the hospital. Ensuring patients have access to doctors for follow-up visits, can get to a pharmacy to fill prescriptions, and are connected to other services they need, for instance, should be considered upon discharge, she said.

“It really does concern me. It’s something that we absolutely have to attend to. Right now, the system is not set up to support the kind of coordination that’s needed. We’re just not thinking the process through, and therefore we’re setting it up to fail.”

— Lisa Freeman

Eight Connecticut hospitals are exempt from the program. They are: Connecticut Children’s Medical Center in Hartford, Connecticut Valley Hospital in Middletown, Natchaug Hospital in Mansfield, Connecticut Mental Health Center in New Haven, Southwest Connecticut Mental Health in Bridgeport, Silver Hill Hospital Inc. in New Canaan, the Connecticut Hospice Inc. in Branford, and Albert J. Solnit Children’s Center in Middletown.

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