More than three dozen hospitals across the U.S. will be penalized more than 3% on most of their CMS reimbursements in 2015, the first year in which the agency's three Medicare quality and safety incentive programs will be in effect.
According to a Modern Healthcare analysis of CMS data on penalties for fiscal 2015, when readmission, hospital-acquired condition and value-based purchasing rates are combined, two hospitals will have much of their Medicare payments docked over 4%. This includes a 4.44% reduction for the 180-bed Palisades Medical Center in North Bergen, N.J., and a 4.21% reduction for the 455-bed Pennsylvania Hospital in Philadelphia, one of the oldest hospitals in the U.S. (See list.)
Dr. Patrick Brennan, chief medical officer and senior vice president at the University of Pennsylvania Health System, said Pennsylvania Hospital is addressing specific problems and expects to see improvements next year. The readmission penalty increased from 0.35% in 2014 to 3% in 2015 because of additional measures for hip and knee surgery being added by the CMS for fiscal 2015, he said.
Readmission practice patterns for those procedures have been re-evaluated. The hospital also is addressing coding concerns that led to poor performance on patient-safety indicators.
Palisades officials, representing the most penalized hospital in the nation, did not provide comment. But noticeable on the hospital's home page is a link to a Joint Commission public notice that offers patients information on how to complain to the national accrediting body.
The combined penalties or rewards were derived by combining the percentages for the three quality programs included in the Patient Protection and Affordable Care Act. In 2015, hospitals can be penalized for excessive 30-day readmissions up to 3% of revenue from base operating diagnostic-related group payments by the CMS. The value-based purchasing program rewards or penalizes hospitals up to 1.5% of Medicare revenue based on a suite of quality indicators.
New this year is a 1% penalty on all Medicare revenue if a hospital falls into the bottom quartile in performance on hospital acquired conditions, or HACs, such as urinary catheter infections.
The escalating penalties are drawing fire from advocates for teaching hospitals and critical-access hospitals, which are disproportionately represented among the worst-performing hospitals. The CMS programs need to be refined to ensure they are not creating additional hardships, said Dr. Atul Grover, the chief public policy officer for the American Association of Medical Colleges, which represents the nation's academic medical community.