Hospital Medicare Penalties for Readmissions -- Indiana-Specific Rates Posted

Nearly one in five Medicare patients returns to the hospital within a month of discharge. The Affordable Care Act added a section establishing the Hospital Readmissions Reduction Program, which requires CMS to reduce payments to IPPS hospitals with excess readmissions, effective for discharges beginning on October 1, 2012.

CMS will use readmission measures for Acute Myocardial Infarction (AMI), Heart Failure (HF) and Pneumonia (PN) and the calculation of the excess readmission ratio, which will then be used, in part, to calculate the readmission payment adjustment under the Hospital Readmissions Reduction Program.

The excess readmission ratio includes adjustment for factors that are clinically relevant and the excess readmission ratio is based on discharges occurring during the 3-year period of July 1, 2008 to June 30, 2011.

According to Kaiser Health News, more than 2,000 hospitals are scheduled to receive Medicare payment reductions because their readmission rates for certain diagnoses (acute myocardial infarction, heart failure, and pneumonia) are deemed too high by the federal Centers for Medicare and Medicaid Services (CMS). The payment reductions could be as high as 1% of hospital Medicare revenues in 2012-13 and will increase to a maximum of 2% starting in October 2013 and then to 3% the following year. LeadingAge Indiana recommends all members read the Kaiser information, including reports on Indiana hospital-specific Medicare penalty rates, (article). This information could help gauge a local hospital’s interest in working with long term service and support providers to reduce preventable hospitalizations and improve care transitions.

For the period starting October 1, 2012, the average Medicare penalty for the nation’s hospitals is shown by Kaiser to be 0.28%; Indiana’s hospitals fare much better with an average payment reduction penalty of 0.16%. (Click here to see state-by-state penalty rates)