About three-quarters of US hospitals were penalized for high readmission rates in 2015, losing a combined $420 in penalties. Kaiser reported that this year, 2,592 hospitals will receive lower payments for Medicare patients. All but 209 hospitals penalized this year were also penalized last year, Kaiser said.

More than half the hospitals penalized were done so at the lowest possible rate, between 0.01% and 0.05%. 

Hospitals have argued that CMS should include a sociodemographic adjustment when factoring in penalties, arguing that they have little control over the foods their patients eat or whether they fill their medications. The National Quality Forum has been assessing these factors in a comprehensive study, but results won’t be available until late 2016.

“Hospitals should not be penalized simply because of the demographic characteristics of their patients,” said Andrew S. Boozary, M.D. in JAMA last week. Boozary notes that safety-net hospitals were 60% more likely to be penalized in the first three years of reporting, and hospitals with the lowest profit margins were more likely to be penalized than more profitable ones.

Senators Joseph Manchin (D-W.Va.) and Roger Wicker (R-Miss.) coauthored the essay and are sponsors of a bill to consider sociodemographic factors in calculating readmissions. 

Our Take: If three-fourths of hospitals are getting dinged—now for the fourth straight year—something is wrong with how CMS is calculating the expected value of the rates. The Hospital Readmissions Reduction Program should be an incentive program, not a profit center.


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