CMS' readmissions program changes hit specialty hospitals
Skip to main content
MDHC_Logotype_white
Subscribe
  • My Account
  • Login
  • Subscribe
  • News
    • This Week's News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • People
    • Regional News
    • Digital Edition
    • Biden's early approach to virus: Underpromise, overdeliver
       Alan B. Miller
      Looking ahead with optimism as we continue to transform healthcare
      Cable news and the gender gap
      An older man wearing a mask receiving a vaccine.
      Want more diversity in clinical trials? Start with the researchers
    • Biden's early approach to virus: Underpromise, overdeliver
      An older man wearing a mask receiving a vaccine.
      Want more diversity in clinical trials? Start with the researchers
      A phone screen showing the question, "Mary we hope this information was helpful and we'd like to keep guiding you. Are you interested in knowing when it's your turn to receive the vaccine?"
      Chatbots, texting campaigns help manage influx of COVID vax questions
      Dr. Karen DeSalvo
      Next Up Podcast: What to expect with telehealth and healthcare technology in the next 4 years
    • Health suffers as rural hospitals close
      Medicare ACO participants fell in 2021
      Louisiana gets reports vaccine providers are discriminating
      'We know this is real': New clinics aid virus 'long-haulers'
    • Last-minute COVID costs cut into UnitedHealthcare's $396 million operating income
      CMS approves rule forcing insurers to ease prior authorization
      COVID-19 still a big uncertainty for insurers in 2021
      Health insurers' outlook boosted after Dems' Georgia win
    • It's a secret: California keeps key virus data from public
      lacewell_linda_supertinendent_dept_of_financial_services_8.47.jpg
      New York state investigates drug price spikes during pandemic
      Health experts blame rapid expansion for vaccine shortages
      HHS freezes rule targeting community health centers' drug discounts
    • By the Numbers: 20 largest healthcare investment banks in 2020
      Providers await new HHS coronavirus grant reporting deadline
      Operation Warp Speed Dr. Moncef Slaoui, Pfizer Group President Angela Hwang, Moderna CEO Stephane Bancel, CVS Health Executive Vice President Karen Lynch and McKesson CEO Brian Tyler participate in a panel discussion on the COVID-19 vaccine.
      Hospitals, drug companies strive to stand out virtually at JPM
      Intermountain, Trinity, Memorial Hermann behind $300M private equity fund
    • Dr. Karen DeSalvo
      Next Up Podcast: What to expect with telehealth and healthcare technology in the next 4 years
      Next Up Podcast: What to expect with telehealth and healthcare technology in the next 4 years - Transcript
      A man in a room with servers.
      Momentum grows to outsource hospital tech functions in 2021
      5 things to know about Google's $2.1B Fitbit acquisition
    • An older man wearing a mask receiving a vaccine.
      Want more diversity in clinical trials? Start with the researchers
      Avocado
      Avocado a day keeps the doctor away
      50% of Americans make resolutions. Fewer than 27% keep them over time.
      Data Points: Sticking with your resolutions
      U.K. chief scientist says new virus variant may be more deadly
    • Cerner names Erceg as new CFO
      Elizabeth Richter will serve as acting CMS administrator
      Providence names new chief financial officer
      Wisconsin's top health official departing for federal job
    • Midwest
    • Northeast
    • South
    • West
  • Insights
    • ACA 10 Years After
    • Best Practices
    • InDepth Special Reports
    • Innovations
    • The Affordable Care Act after 10 years
    • New care model helps primary-care practices treat obesity
      doctor with patient
      COVID-19 treatment protocol developed in the field helps patients recover
      Rachel Wyatt
      Project to curb pressure injuries in hospitals shows promise
      Yale New Haven's COVID-19 nurse-staffing model has long-term benefits
    • Modern Healthcare InDepth: Breaking the bias that impedes better healthcare
      Videos: Healthcare industry executives describe their encounters with racism
      Michellene Davis
      Healthcare leadership lacks the racial diversity needed to reduce health disparities
      Dr. James Hildreth
      How medical education can help fight racism
      Quotes from rebadged employees
      Outsourcing IT, revenue cycle takes toll on internal culture
    • A phone screen showing the question, "Mary we hope this information was helpful and we'd like to keep guiding you. Are you interested in knowing when it's your turn to receive the vaccine?"
      Chatbots, texting campaigns help manage influx of COVID vax questions
      A woman with a wearable sensor talking to her provider.
      Wearable sensors help diagnose heart rhythm problems in West Virginia
      self service station
      COVID-19 pushes patient expectations toward self-service
      Targeting high-risk cancer patients with genetics
  • Transformation
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Highmark Health inks six-year cloud, tech deal with Google
      Study: 1 in 5 patients report discrimination when getting healthcare
      HHS proposes changing HIPAA privacy rules
      Android health records app launches at 230 health systems
    • California hospitals prepare ethical protocol to prioritize lifesaving care
      Amazon, JPMorgan Chase, Berkshire Hathaway disband Haven
      Digital pathways poised to reshape healthcare continuum in 2021
      Healthcare was the hardest hit by supply shortages across all U.S. industries
    • A phone screen showing the question, "Mary we hope this information was helpful and we'd like to keep guiding you. Are you interested in knowing when it's your turn to receive the vaccine?"
      Chatbots, texting campaigns help manage influx of COVID vax questions
      A woman with a wearable sensor talking to her provider.
      Wearable sensors help diagnose heart rhythm problems in West Virginia
      New care model helps primary-care practices treat obesity
      How hospitals are building on COVID-19 telehealth momentum
    • Regional insurers bet big on virtual-first plans
      MedPAC votes to boost hospital payments, freeze or cut other providers
      Most Next Gen ACOs achieved bonuses in 2019
      Congress recalibrates Medicare Physician Fee Schedule after lobbying
  • Data/Lists
    • Rankings/Lists
    • Interactive Databases
    • Data Points
    • Health Systems Financials
      Executive Compensation
      Physician Compensation
  • Op-Ed
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
    • Wellstar CEO calls adapting for the pandemic her bold move
      Howard P. Kern
      Recognizing the value of telehealth in its infancy
      Dr. Stephen Markovich
      A bold move helped take him from family doctor to OhioHealth CEO
      Dr. Bruce Siegel
      Why taking a hospital not-for-profit was Dr. Bruce Siegel’s boldest move
    • Barry Ostrowsky
      Ending racism is a journey taken together; the starting point must be now
      Laura Lee Hall and Gary Puckrein
      Increased flu vaccination has never been more important for communities of color
      John Daniels Jr.
      Health equity: Making the journey from buzzword to reality
      Mark C. Clement and David Cook
      We all need to 'do something' to fight inequities and get healthcare right, for every patient, every time
    •  Alan B. Miller
      Looking ahead with optimism as we continue to transform healthcare
      Dr. Bruce Siegel
      By protecting the healthcare safety net, Biden can put us on the path to a stronger country
      Healing healthcare: some ideas for triage by the new Congress, administration
      Dr. Sachin H. Jain
      Medicare for All? The better route to universal coverage would be Medicare Advantage for All
    • Letters: Eliminating bias in healthcare needs to be ‘deliberate and organic’
      Letters: Maybe dropping out of ACOs is a good thing for patients
      Letters: White House and Congress share blame for lack of national COVID strategy
      Letters: VA making strides to improve state veterans home inspections
    • Sponsored Content Provided By Optum
      How blockchain could ease frustration with the payment process
      Sponsored Content Provided By Optum
      Three steps to better data-sharing for payer and provider CIOs
      Sponsored Content Provided By Optum
      Reduce total cost of care: 6 reasons why providers and payers should tackle the challenge together
      Sponsored Content Provided By Optum
      Why CIOs went from back-office operators to mission-critical innovators
  • Awards
    • Award Programs
    • Nominate
    • Previous Award Programs
    • Other Award Programs
    • Best Places to Work in Healthcare Logo for Navigation
      Nominations Open - Best Places to Work in Healthcare
      Nominations Open - Health Care Hall of Fame
      Nominations Open - 50 Most Influential Clinical Executives
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Top 25 Minority Leaders
    • Top 25 Women Leaders
    • Excellence in Nursing Awards
    • Design Awards
    • Top 25 COOs in Healthcare
    • 100 Top Hospitals
    • ACHE Awards
  • Events
    • Conferences
    • Galas
    • Webinars
    • COVID-19 Event Tracker
    • Leadership Symposium
    • Healthcare Transformation Summit
    • Women Leaders in Healthcare Conference
    • Workplace of the Future Conference
    • Strategic Marketing Conference
    • Social Determinants of Health Symposium
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Minority Leaders Gala (2022)
    • Top 25 Women Leaders Gala
  • Listen
    • Podcast - Next Up
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
    • Dr. Karen DeSalvo
      Next Up Podcast: What to expect with telehealth and healthcare technology in the next 4 years
      Carter Dredge
      Next Up Podcast: Ready, set, innovate! Innovation and disruption in healthcare
      Next Up Podcast: COVID-19, social determinants highlight health inequities — what next?
      Ceci Connolly
      Next Up Podcast: How to navigate the murky post-election waters
    • Beyond the Byline: Regulators aim to boost value push with fraud and abuse law updates
      An older man wearing a mask receiving a vaccine.
      Beyond the Byline: Verifying information on the chaotic COVID-19 vaccine rollout
      doctor burnout
      Beyond the Byline: How healthcare supply chain struggles contribute to employee burnout
      Beyond the Byline: Covering race and diversity in the healthcare industry
    • Leading intention promote diversity and inclusion
      Introducing Healthcare Insider Podcast
    • The Check Up: Chip Kahn
      The Check Up: Chip Kahn of the Federation of American Hospitals
      The Check Up: Trenda Ray
      The Check Up: Trenda Ray of the University of Arkansas for Medical Sciences
      The Check Up: Dr. Kenneth Davis
      The Check Up: Dr. Kenneth Davis of Mount Sinai Health System
      The Check Up: Dr. Thomas McGinn
      The Check Up: Dr. Thomas McGinn of CommonSpirit Health
    • Video: Ivana Naeymi Rad of Intelligent Medical Objects
  • MORE +
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Government
October 05, 2018 01:00 AM

CMS' readmissions program changes hit specialty hospitals

Maria Castellucci
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    Recent changes to the CMS' Hospital Readmissions Reduction Program will result in smaller penalties at teaching and community hospitals and larger penalties at specialty hospitals, according to a Modern Healthcare analysis.

    In its most recent release of hospital readmissions penalties data, the CMS for the first time risk adjusted hospitals by five peer groups to address differences in socioeconomic conditions between hospital patient populations. A study by consulting firm Sullivan, Cotter and Associates and Modern Healthcare found that teaching and community hospitals avoided larger penalties while specialty hospitals saw penalties rise as a result of the methodology changes.

    Of the 2,979 teaching and community hospitals, 602 face a Medicare payment penalty of 1% or higher in fiscal 2019 compared with fiscal 2018 when 653 hospitals faced similar penalties. By comparison, of the 174 specialty hospitals, 34 will face a penalty of 1% or higher in fiscal 2019 while 27 faced similar penalties in fiscal 2018.

    Additionally, the number of specialty hospitals hit with a 3% penalty—the highest a hospital can get dinged with in the CMS program—jumped from 10 in fiscal year 2018 to 18 in fiscal year 2019 while the number of community and teaching hospitals with 3% penalties fell from 38 to 29.

    Hospital stakeholders and policy experts say the new risk adjustment will level the playing field for teaching and community hospitals that have historically struggled under the program, but more work is needed.

    Dr. Ashish Jha, a professor of health policy at the Harvard School of Public Health who has written extensively about the program, said the change "moves the ball in the right direction."

    Specialty hospitals, which often have larger proportion of commercially insured and healthier patient populations, were usually able to avoid penalties from the readmissions program because their performance was being compared to teaching and community hospitals, which are more likely to have poorer and sicker populations vulnerable to readmission. In fact, 117 specialty hospitals won't get a penalty in fiscal 2019 a drop from 2018 when 133 hospitals were able to avoid a penalty.

    "We're encouraged by these shifts. They clearly show that the challenges vulnerable patients and their hospitals face make a difference, and it validates our work to account for this in the readmissions reduction program," said Dr. Bruce Siegel, president and CEO of America's Essential Hospitals, in a statement.

    Congress ordered the CMS in 2016 to fix a longstanding complaint from hospitals—safety-net hospitals in particular—that they are unfairly penalized in the CMS' Hospital Readmissions Reduction Program. Hospitals argue readmissions are difficult for them to control considering a patient's social conditions influence whether or not they will return within 30 days of discharge.

    To address this, the CMS divided hospitals with similar proportions of dual-eligible patients into five groups and compared their readmission rates for six conditions or procedures. Dual-eligibility is viewed by some as an indicator of poor socioeconomic conditions. The population also accounts for a significant percentage of Medicare spending because patients usually have complex healthcare needs.

    The majority of specialty hospitals—78.2%— were in peer group one, which is the group with the lowest proportion of dual-eligible patients, according to Sullivan Cotter's analysis.

    At the same time, 32.4% of major teaching hospitals were in peer group five while 25.9% were in peer group four.

    Minor teaching and large community were more evenly dispersed throughout all five groups with 19.4% in peer group one and 17.9% in peer group five.

    For fiscal year 2019, major teaching hospitals in peer group five will have an average payment reduction of .43% compared with last year when the hospitals had an average payment reduction of 0.58%.

    But the avoidance of penalties for major teaching hospitals wasn't as dramatic as the Association of American Medical Colleges had hoped. Dr. Atul Grover, executive vice president of the AAMC, said while the changes have provided "some relief," "the penalties remain high and disproportionately affect many major teaching hospitals."

    Richard Fuller, an economist for the clinical and economic research group at 3M Health Information Systems who has studied the readmissions program, said the avoidance of penalties for major teaching hospitals likely wasn't as dramatic because they are now "competing against themselves."

    Major teaching hospitals make up a substantial percentage of peer group five and these hospitals generally perform better on outcomes and preventing readmissions than other institutions so the change may have actually made it harder for major teaching hospitals to avoid a penalty, Fuller said.

    Another problem is that the peer grouping has only heightened the stark differences between specialty hospitals and other hospital types, said David Levine, senior vice president of advanced analytics and informatics at consultancy Vizient.

    Now that hospitals are being compared to each other in smaller groups, the specialty hospitals that dominate peer group one can influence how the community and minor teaching hospitals also in that group get penalized. Specialty hospitals generally have lower readmission rates, so it could increase penalties for the other hospitals in the same peer groups.

    About 19% of minor teaching hospitals share peer group one with specialty hospitals. Of the 840 minor teaching hospitals, 186 will get a penalty of 1% or higher in fiscal year 2019.

    "I think the CMS is going in the right direction, but I think with the cohorts, the specialty hospitals need to be excluded or in their own cohort," Levine said.

    Hospital stakeholders emphasize they don't want the CMS to stop changes to the program.

    Both America's Essential Hospitals and the American Hospital Association are pushing the CMS to risk adjust the measures used in the program.

    Akin Demehin, director of quality policy at the AHA, said by risk adjusting measures, the program will better distinguish between hospital characteristics. Right now, hospitals with very similar case mixes can be in different peer groups.

    "We are continuing to strive to improve the quality of care we deliver and we expect the CMS will want to improve the measures that are applied," said Nancy Foster, vice president of quality and patient safety policy at the AHA.

    Editor's Note: Sullivan Cotter used its own methodology to categorize hospitals by four types: specialty, small or medium community, large community or minor teaching and major teaching. The firm considers numerous sources to establish the groups including teaching status, case-mix index, resident-to-bed ratio and bed size.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    It's a secret: California keeps key virus data from public
    It's a secret: California keeps key virus data from public
    New York state investigates drug price spikes during pandemic
    New York state investigates drug price spikes during pandemic
    Sponsored Content
    Get Free Newsletters

    Sign up for free enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today

    The weekly magazine, websites, research and databases provide a powerful and all-encompassing industry presence. We help you make informed business decisions and lead your organizations to success.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS
    • Instagram

    Stay Connected

    Join the conversation with Modern Healthcare through our social media pages

    MDHC_Logotype_white
    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • This Week's News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition
    • Insights
      • ACA 10 Years After
      • Best Practices
      • InDepth Special Reports
      • Innovations
    • Transformation
      • Patients
      • Operations
      • Care Delivery
      • Payment
    • Data/Lists
      • Rankings/Lists
      • Interactive Databases
      • Data Points
    • Op-Ed
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Awards
      • Award Programs
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Top 25 Minority Leaders
        • Top 25 Women Leaders
      • Nominate
      • Previous Award Programs
        • Excellence in Nursing Awards
        • Design Awards
        • Top 25 COOs in Healthcare
      • Other Award Programs
        • 100 Top Hospitals
        • ACHE Awards
    • Events
      • Conferences
        • Leadership Symposium
        • Healthcare Transformation Summit
        • Women Leaders in Healthcare Conference
        • Workplace of the Future Conference
        • Strategic Marketing Conference
        • Social Determinants of Health Symposium
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Minority Leaders Gala (2022)
        • Top 25 Women Leaders Gala
      • Webinars
      • COVID-19 Event Tracker
    • Listen
      • Podcast - Next Up
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • MORE +
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing