The Penalties Are Coming: Hospitals to be penalized – LTC facilties act now to benefit!
By Jordan Rau
Kaiser Health News
More than 2,000 hospitals — including some nationally recognized ones — will be penalized by
the government starting in October because many of their patients are readmitted soon after
discharge, new records show.
Together, these hospitals will forfeit more than $280 million in Medicare funds over the next
year as the government begins a wide-ranging push to start paying health care providers based on
the quality of care they provide.
With nearly one in five Medicare patients returning to the hospital within a month of discharge,
the government considers readmissions a prime symptom of an overly expensive and
uncoordinated health system. Hospitals have had little financial incentive to ensure patients get
the care they need once they leave, and in fact they benefit financially when patients don’t
recover and return for more treatment.
Nearly 2 million Medicare beneficiaries are readmitted within 30 days of release each year,
costing Medicare $17.5 billion in additional hospital bills. The national average readmission rate
has remained steady at around 19 percent for several years, even as many hospitals have worked
harder to lower theirs.
The penalties, authorized by the 2010 health care law, are part of a multipronged effort by
Medicare to use its financial muscle to force improvements in hospital quality. In a few months,
hospitals also will be penalized or rewarded based on how well they adhere to basic standards of
care and how patients rated their experiences. Overall, Medicare has decided to penalize 71
percent of the hospitals whose readmission rates it evaluated, the records show.
The penalties will fall heaviest on hospitals in New Jersey, New York, the District of Columbia,
Arkansas, Kentucky, Mississippi, Illinois and Massachusetts, a Kaiser Health News analysis of
the records shows. Hospitals that treat the most low-income patients will be hit particularly hard.
A total of 307 hospitals nationally will lose the maximum amount allowed under the health care
law: 1 percent of their base Medicare reimbursements. Several of those are top-ranked
institutions, including Hackensack University Medical Center in New Jersey, North Shore
University Hospital in Manhasset, N.Y. and Beth Israel Deaconess Medical Center in Boston, a
teaching hospital of Harvard Medical School.
“A lot of places have put in a lot of work and not seen improvement,” said Dr. Kenneth Sands,
senior vice president for quality at Beth Israel. “It is not completely understood what goes into an
institution having a high readmission rate and what goes into improving” it.
Sands noted that Beth Israel, like several other hospitals with high readmission rates, also has
unusually low mortality rates for its patients, which he says may reflect that the hospital does a
good job at swiftly getting ailing patients back and preventing deaths.
Penalties Will Increase Next Year
The maximum penalty will increase after this year, to 2 percent of regular payments starting in
October 2013 and then to 3 percent the following year. This year, the $280 million in penalties
comprise about 0.3 percent of the total amount hospitals are paid by Medicare.
According to Medicare records, 1,910 hospitals will receive penalties less than 1 percent; the
total number of hospitals receiving penalties is 2,217. Massachusetts General Hospital in Boston,
which U.S. News last month ranked as the best hospital in the country, will lose 0.53 percent of
its Medicare payments because of its readmission rates, the records show. The smallest penalties
are one hundredth of a percent, which 49 hospitals will receive.
Dr. Eric Coleman, a national expert on readmissions at the University of Colorado School of
Medicine, said the looming penalties have captured the attention of many hospital executives.
“I’m not sure penalties alone are going to move the needle, but they have raised awareness and
moved many hospitals to action,” Coleman said.
The penalties have been intensely debated. Studies have found that African-Americans are more
likely to be readmitted than other patients, leading some experts to be concerned that hospitals
that treat many blacks will end up being unfairly punished.
Hospitals have been complaining that Medicare is applying the rule more stringently than
Congress intended by holding them accountable for returning patients no matter the reason they
Hospitals That Serve Poor Are Hit Harder Than Others
Some safety-net hospitals that treat large numbers of low-income patients tend to have higher
readmission rates, which the hospitals attribute to the lack of access to doctors and medication
these patients often experience after discharge. The analysis of the penalties shows that 80
percent of the hospitals that have a lot of low-income patients will lose Medicare funds in the
fiscal year starting in October. Sixty-seven percent of the hospitals treating few poor patients are
going to be penalized, the analysis shows.
“It’s our mission, it’s good, it’s what we want to do, but to be penalized because we care for
those folks doesn’t seem right,” said Dr. John Lynch, chief medical officer at Barnes-Jewish
Hospital in St. Louis, which is receiving the maximum penalty.
“We have worked on this for over four years,” Lynch said, but those efforts have not substantially
reduced the hospital’s readmissions. He said Barnes-Jewish has tried sending nurses to patients’
homes within a week of discharge to check up on them, and also scheduled appointments with a
doctor at a clinic, but half the patients never showed. This spring, the hospital established a team
of nurses, social workers and a pharmacist to monitor patients for 60 days after discharge.
“Some of the hospitals that are going to pay penalties are not going to be able to afford these
types of interventions,” said Lynch, who estimated the penalty would cost Barnes-Jewish $1
Atul Grover, chief public policy officer for the Association of American Medical Colleges, called
Medicare’s new penalties “a total disregard for underserved patients and the hospitals that care
for them.” Blair Childs, an executive at the Premier healthcare alliance of hospitals, said: “It’s
really ironic that you penalize the hospitals that need the funds to manage a particularly difficult
Medicare disagreed, writing that “many safety-net providers and teaching hospitals do as well or
better on the measures than hospitals without substantial numbers of patients of low
socioeconomic status.” Safety-net hospitals that are not being penalized include the University of
Mississippi Medical Center in Jackson and Denver Health Medical Center in Colorado, the
Bill Kramer, an executive with the Pacific Business Group on Health, a California-based
coalition of employers, said the penalties provide “an appropriate financial incentive for hospitals
to do the right thing in terms of preventing avoidable readmissions.”
The government’s penalties are based on the frequency that Medicare heart failure, heart attack
and pneumonia patients were readmitted within 30 days between July 2008 and June 2011.
Medicare took into account the sickness of the patients when calculating whether the rates were
higher than those of the average hospital, but not their racial or socio-economic background.
The penalty will be deducted from reimbursements each time a hospital submits a claim starting
Oct. 1. As an example, if a hospital received the maximum penalty of 1 percent and it submitted
a claim for $20,000 for a stay, Medicare would reimburse it $19,800.
The Centers for Medicare & Medicaid Services has been trying to help hospitals and community
organizations by giving grants to help them coordinate patients’ care after they’re discharged.
Leaders at many hospitals say they are devoting increased attention to readmissions in concert
with other changes created by the health law.
Sally Boemer, senior vice president of finance at Mass General, said she expected readmissions
will drop as the hospital develops new methods of arranging and paying for care that emphasize
prevention. Readmissions “is a big focus of ours right now,” she said.
Gundersen Lutheran Health System in La Crosse, Wis., and Intermountain Medical Center in
Murray, Utah, were among 887 hospitals where Medicare determined the readmission rates were
acceptable. Those hospitals will not lose any money, nor will another 346 hospitals that had too
few cases for Medicare to evaluate. On average, the readmissions penalties were lightest on
hospitals in Utah, South Dakota, Vermont, Wyoming and Oregon, the analysis shows. Idaho was
the only state where Medicare did not penalize any hospital.
Even some hospitals that won’t be penalized are struggling to get a handle on readmissions.
Michael Baumann, chief quality officer at the University of Mississippi Medical Center, said
in-house doctors had made headway against heart failure readmissions by calling patients at
home shortly after discharge. “It’s a fairly simple approach, but it’s very labor intensive,” he said.
The problems afflicting many of the center’s patients—including obesity and poverty that makes
it hard to afford medications—make it more challenging. “It’s a tough group to prevent
readmissions with,” he said.
Compression Therapy Reduces Blood Clots in Stoke Patients, Study Finds
New research shows that inexpensive leg compression devices help prevent fatal blood clots in stroke patients.
The thigh-length sleeves promote blood flow by periodically filling with air and gently squeezing the legs. Vascular PRN, based in Tampa, Fla., is a leading national distributor of intermittent pneumatic compression (IPC) therapy equipment. Greg Grambor, the company’s president, commented on the study. “Compression therapy has been around for over 20 years,” Grambor said. “Many doctors have already come to rely on this equipment for safe, effective, and affordable prevention of deep vein thrombosis. I’m glad this new research was done, and I hope it will help convince more doctors to give it a try.” Deep vein thrombosis (DVT) is the formation of a blood clot inside a vein deep within the body. It is common in stroke patients and immobile patients and can also occur in healthy people on long flights where movement is restricted. When a clot detaches, it can then become lodged in the arteries of the lungs, causing a potentially life-threatening pulmonary embolism.
The study involved nearly 3,000 stroke patients at over 100 hospitals across the United Kingdom. Results showed 8.5 percent of patients treated with compression devices developed blood clots, versus 12.1 percent of patients who received alternative treatments. “Many patients at risk of DVT are prescribed blood thinning drugs,” Grambor added. “But these drugs increase the risk of bleeding, which is quite dangerous for stroke patients as it may lead to bleeding in the brain.”
So far, no study has conclusively shown that blood thinners increase the survival rate of stroke patients. Doctors at the European Stroke Conference, held in London on May 31, 2013, discussed the study’s findings. Professor Martin Dennis of the University of Edinburgh said that the UK’s guidelines for treatment of stroke should be revised to recommend IPC treatment for all patients at high risk of DVT. Currently, they only recommend it in cases where blood thinners are unsuccessful or too risky.
Each year, some 15 million people worldwide suffer a stroke. One third of strokes are fatal and another third result in permanent disability.