Most U.S. hospitals will get less money from Medicare in fiscal 2016 because too many patients return within 30 days of discharge.
Only 799 out of more than 3,400 hospitals subject to the Hospital Readmissions Reduction Program performed well enough on the CMS' 30-day readmission program to face no penalty. Thirty-eight hospitals will be subject to the maximum 3% reduction, according to a Modern Healthcare analysis of newly posted CMS data.
The readmissions program, created under the Affordable Care Act, initially evaluated how often patients treated for heart attack, heart failure and pneumonia had to return to the hospital within 30 days of discharge. Facilities with too high a readmission rate saw their Medicare payments docked up to 1% in fiscal 2013. The financial stakes increased to a 2% reduction in fiscal 2014.
For fiscal 2015 the CMS added treatment for two conditions—chronic obstructive pulmonary disease and total hip and total knee replacements—and the penalty rose to 3%. The majority of hospitals faced fines during that reporting year. The number subject to penalties in fiscal 2016 rose by 55 facilities, to 2,665.
On Friday the CMS issued a final rule for Medicare's hospital inpatient prospective payment system. The regulations include several upcoming changes for the hospital inpatient quality reporting, excess readmissions, hospital-acquired condition and value-based purchasing programs.
Among those provisions is a major change to the readmission measure for pneumonia in fiscal 2017. The change expands the population cohort included in the analysis to patients with a principal discharge diagnosis of either sepsis or respiratory failure who also have a secondary diagnosis of pneumonia present on admission.
The hospital readmission reduction program has faced increasing criticism by health policy researchers and industry groups representing U.S. hospitals. They argue that many factors affecting whether a patient needs to be readmitted are beyond a hospital's control. In particular, facilities in poor communities may be unfairly penalized, some of the program's critics say.
The CMS said Friday that it is continuing to monitor the impact of socio-economic status on provider results within quality reporting programs. The agency is working with the National Quality Forum on a two-year trial to test risk-adjusting the measures for socio-demographic factors.
Certain types of hospitals, such as critical-access hospitals, and all hospitals in Maryland (because of its unique all-payer rate-setting system) are exempt from the readmissions program.
Use the search tool below to see the payment adjustments that will be applied to hospitals in fiscal 2016.
To see four years of results from the readmissions program and results from other federal incentive programs, explore Modern Healthcare's Hospital Quality & Safety Database.