A new proposal from the CMS could address one of the biggest concerns hospital leaders have long had with how readmission penalties are calculated.
Under the proposed rule, issued April 14, the CMS would for the first time consider a hospital's proportion of dual-eligible patients when determining penalties for organizations with relatively high rates of readmissions. Although hailed by industry stakeholders, many said it was an incremental change.
“It's a good way to start,” said Francois de Brantes, director of the Altarum Institute's Center for Payment Innovation. But Medicare has been urged for a long time to examine ways to adjust for social and demographic factors, he added. “The proposed rulemaking still hasn't fully resolved that question.”
The change stems from the 21st Century Cures Act, which was enacted in December 2016. The law required Medicare to take patient background into account when calculating payment reductions under the Hospital Readmission Reduction Program, and to adjust those penalties based on the proportion of patients who were dually eligible for Medicare and Medicaid.
Such patients are disproportionately expensive for hospitals. According to a June report from the Medicare Payment Advisory Commission, they constituted 18% of beneficiaries yet accounted for nearly one-third of total Medicare fee-for-service spending in 2012.