News: 2,583 hospitals hit with new round of readmission penalties

Medicare cut payments to 2,583 hospitals this week in the newest round of readmission penalties, according to Kaiser Health News. Medicare estimates that the cuts will cost hospitals $563 million over a year.

Of the 3,129 general hospitals evaluated in the Hospital Readmission Reduction Program, 83% received a penalty that will take effect in fiscal year 2020 (which began on Tuesday, October 1).

The Hospital Readmission Reduction Program has been used to adjust Medicare payments since 2012, but their efficacy has been repeatedly questioned. In fact, some studies have seen a correlation between the lower readmission rates and higher mortality rates.

A recent analysis from the Medicare Payment Advisory Commission (MedPAC), however, found no such correlation, so the program is likely here to stay. On average, penalized hospitals will see a 0.71% decrease in payment for each patient who leaves the hospital over the next year, according to the Kaiser Health News analysis. The analysis also found:

• 1,177 hospital received a higher penalty than they did last year
• 1,148 hospitals received a lower penalty than last year
• 64 hospitals received the same penalty as last year
• 194 hospitals that hadn’t been penalized last year are receiving one this year
• The maximum penalty (a 3% reduction) was assessed against 56 hospitals
• 372 hospitals avoided penalties in both years

Editor’s note: To read Kaiser Health News’ coverage of this story, click here. To read about the MedPAC analysis of the readmission program, click here.