Medicare Dings Hospitals for Readmissions

Dayton Daily News (OH)

August 24, 2012

Twelve area hospitals are among thousands nationwide that will lose up to 1% of their Medicare funding for readmitting too many patients soon after they are discharged.

About 2,200 hospitals will be penalized, forfeiting an estimated $280 million over the next year beginning in October, according to Kaiser Health News, which analyzed and published government data used for this story.

The penalties are part of the 2010 healthcare law and are meant to spur hospitals into reducing the estimated $17.4 billion the government says it spends each year on Medicare patients who are unnecessarily readmitted less than a month after being released from the hospital. The government will increase the penalties to a maximum of 2% next year and 3% in 2014.

In Ohio, the U.S. Centers for Medicare and Medicaid Services will penalize 97 of the 137 hospitals it analyzed, or 70%. Nationwide, the government penalized about two-thirds of the 3,367 hospitals it reviewed, with 278 losing the maximum 1%.

Locally, Good Samaritan Hospital in Dayton had the highest readmission rate and, as a result, will receive the largest cut in its Medicare reimbursements, about 0.66%.

The other area hospitals seeing the most cuts are: Spring-field Regional Medical Center, 0.54%; Grandview Hospital & Medical Center, 0.45%; Fort Hamilton Hughes Memorial Hospital in Hamilton, 0.27%; and Atrium Medical Center in Franklin, 0.23%. The penalties range as low as 0.01% for Kettering Medical Center.

Officials with all the hospitals declined to say how the penalties will translate into dollars, but as a point of reference, the Columbus Dispatch reported a 0.64% penalty against Ohio State University’s Wexner Medical Center will cost the Columbus hospital about $700,000.

Big chunk

Medicare is a major financial driver for healthcare in Ohio; the government insurance program for the elderly and disabled younger people paid for 41% of all medical services at Ohio hospitals last year, according to the Ohio Hospital Association.

Bryan Bucklew, CEO and president of the Greater Dayton Area Hospital Association, said his organization has member hospitals with between 70 and 75% of their patients on Medicare or Medicaid. “Any reduction in either Medicare or Medicaid has an adverse impact on their bottom line,” he said. “That’s a quick way to get people’s attention.”

So why the difference in readmission numbers among different hospitals, some of which are in the same parent company? Socioeconomic status, age, race and education are all factors, officials said. Research has shown that hospitals serving low-income or minority communities are more likely to have higher readmission rates. Poorer areas may not have as ready access to medical care.

“If I’m a 45-year-old female with a job, I drive, I have insurance, and I have Medicare, maybe a supplemental insurance, and I’m well-educated,” said Chris Turner, chief quality officer for Kettering Health Network. “I’m more likely to follow up than someone who is 70 years old, no longer drives, on a fixed budget, who can’t cover-out-of-pocket costs.”

Communities with more people who suffer from chronic disease such as obesity or diabetes are more affected, Buckew said. “We have a challenging environment where we don’t have as much access to primary and preventative care as other communities do,” he said. “People with chronic disease tend to end up in the ER. So you’re treating the symptoms instead of the episodes.”

To try to reduce readmissions and avoid government penalties, hospitals are adopting strategies to make sure patients follow their post-discharge instructions. “We have pursued several initiatives that have led to improvements,” Dave Lamb, a spokesman for Springfield Regional Medical Center, said in an email. “Key strategies have included helping patients follow physician instructions and making sure they obtain follow-up care.”

Before patients are discharged, a hospital might make sure they schedule a follow-up appointment. Afterward, hospitals could phone patients or knock on their door. Hospitals also are sharing information to try to develop best practices.

Rock and a hard place

But hospitals complain there’s only so much they can do to control what patients do after they are discharged. They criticized the criteria Medicare uses to count readmissions. For example, it doesn’t differentiate between someone who was readmitted to the hospital because they didn’t follow instructions, and then someone who may be readmitted for an entirely different problem, such as a car accident.

And in some instances, readmissions are a prescribed part of treatment, said Diane Ewing, a spokeswoman for Premier Hospital Network. “For instance, heart patients or cancer patients or others upon discharge may be told they need to come back for a treatment … but that counts as a readmission,” Ewing said. “I think you have to balance.”

Even so, Bucklew said he thinks the penalties will ultimately cause hospitals to become more engaged with patients. “I think it makes sense for everybody. In the long-run, it saves everybody money. People utilize the system less, people get better quality of care and continual care.”

But Turner with the Kettering Health Network said she’s concerned that small, independent hospitals might suffer from the Medicare cuts and other penalties associated with the healthcare law.

“Especially my concern is not about systems like ours, but small community-based hospitals that don’t have other hospitals in their systems to kind of learn from and/or offset losses,” she said. “Some of the hospitals in these communities with high-risk patients might find themselves in a situation where they can’t provide all the services they’re providing today.”