There was plenty of good news in the second-year results from the CMS' 30-day hospital readmissions penalty program, which was largely overlooked by the press. A large majority of hospitals either stayed out of the penalty box or reduced their fines. Even the minority of hospitals that absorbed higher penalties had a significant share that improved their readmissions performance once you factor in the doubling of fines this year.
Overall, 1,370 or 40% of the 3,355 eligible hospitals reduced their penalties between 2012 and 2013. Another 912 or 27% stayed the same—no penalties in either year. And the number of hospitals that received the maximum penalty dropped significantly from 274 in 2012 to 19 in 2013.
Even among the 1,073 or one-third of hospitals with higher penalties, the numbers suggest their overall performance actually improved. Stony Brook (N.Y.) University Hospital on Long Island, for instance, saw its penalty increase from the maximum 1% in 2012 to 1.48% in 2013, which is well below this year's maximum penalty of 2%. While readmissions obviously remained a problem there, the movement was in the right direction.
The improved performance for most hospitals wasn't an overnight affair. Medicare calculated last year's penalties based on a rolling average of 30-day readmissions between 2008 and 2011 for three major conditions—heart attack, heart failure and pneumonia. This year, they advanced the evaluation period by a year. Including another post-reform year mattered.