Hospitals with the highest proportion of patients insured by both Medicare and Medicaid were more vulnerable this fiscal year to receive a penalty in CMS' readmissions program compared to hospitals with the smallest percentage of such patients, new data shows.
For the third year in a row, CMS peer grouped hospitals by proportion of dual eligible patients to determine penalties in its Hospital Readmissions Reduction Program. The change, which passed Congress in 2016, is an attempt to address long-standing complaints from safety-net hospitals that they are unfairly penalized when compared to hospitals that see patients with less socioeconomic challenges and risks such as specialty facilities. Congress opted to use dual eligible status to indicate poor socioeconomic status because the patients typically have complex healthcare needs, have income at or below poverty levels and account for a significant percentage of Medicare spending.
But an analysis by Modern Healthcare of the most recent data shows those in peer group five — or hospitals with the most proportion of dual-eligible patients — were still more likely to receive a penalty in fiscal year 2021 than hospitals in peer group one. Of the 616 hospitals in peer group five, 499 will see Medicare payment reductions this fiscal year. By comparison, of the 616 hospitals in peer group one, 448 will receive a payment reduction.