The Hospitals Most Likely to be Hurt by Readmission Penalties

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Who is most likely to be impacted by readmission penalties? According to a Reuters article by Andrew M. Seaman, new research published online in The Journal of the American Medical Association has found, “Large teaching hospitals and hospitals that primarily provide care to poor and uninsured patients are most likely to lose federal money under the U.S. government’s plan to improve quality by tying payments to readmissions.”

Obviously, this is disturbing news, but not entirely surprising. Such concerns already existed when CMS first revealed that under the Affordable Care Act, it would be “tying hospital payments to the number of patients who returned for care within 30 days of their first discharge,” Seaman writes.

CMS is predicting that 0.3 percent of funding or $270 million will be lost by hospitals in 2013 because they surpassed the pre-ordained CMS readmission rate. Large teaching hospitals and poorer hospitals tend to have higher readmissions rates, since the former is dealing with intricate medical issues and the latter is seeing mostly uninsured patients. As a result, such cuts will seriously damage their ability to provide care, especially since they “may not be able to absorb the funding loss.”

The study looked at hospital readmission data from 2008 to 2011 for 3,282 hospitals and “found that 44 percent of the 270 major teaching hospitals…will see the largest penalties, compared to 33 percent of the 3,012 smaller or non-teaching hospitals” and “44 percent of the 769 safety-net hospitals…will get a high penalty, compared to 30 percent of the 2,513 non-safety-net hospitals that serve wealthier and better insured patients.”

Dr. Harlan Krumholz, director of the New Haven, Conn.’s Yale School of Medicine’s Center for Outcomes Research and Evaluation, was a member of the team behind CMS’ quality measures, and he seems to have his doubts about the manner of this implementation.

According to Seaman, Krumholz would “prefer a system where no hospitals are penalized if they all improve their readmission rates.”

Of course, there’s also the debate about the rates themselves and whether they should even be used to measure quality.

“Previous research found factors outside of a hospital’s control, such as poverty and living situation, may be tied to a person’s risk of being readmitted to a hospital,” Seaman writes.

As healthcare leaders, what are your thoughts on this issue? Are readmission rates adequate for measuring a hospital’s quality? What should CMS rectify so that teaching and safety-net hospitals aren’t adversely affected?

-by Pete Fernbaugh

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