Which hospitals are most likely to face readmission penalties?

Safety-net hospitals, large facilities are most likely to see pay cuts

Large teaching hospitals and safety-net facilities are the facilities most likely to be penalized under the federal government's plan to tie Medicare payments to hospital readmission rates, according to a study in JAMA.

Under the Hospital Readmissions Reduction Program, CMS will withhold up to 1% of regular reimbursements for hospitals that have too many patient readmissions within 30 days of discharge because of certain medical conditions, including myocardial infarction, heart failure, and pneumonia. The penalty will climb to 3% in 2015.

For the study, researchers examined hospital readmission rates between 2008 and 2011 and surveyed about 50% of U.S. hospitals.

They found that 2,189 of the 3,282 hospitals they studied would receive reduced reimbursements under the CMS program. Specifically, they found that:

  • 44% of major teaching hospitals and safety-net hospitals likely would receive the largest penalties; and
  • 33% of non-teaching hospitals and 30% of non-safety-net facilities would receive the largest penalties.
  • The study also found that 40% of large hospitals would be penalized, compared with 28% of small hospitals.

The researchers wrote that they could not specifically determine why certain types of hospitals have higher readmissions rates than others.

Karen Joynt—lead author of the study and a cardiologist at Brigham and Women's Hospital—said that while the 1% maximum penalty "may be modest for some hospitals, [it] may represent substantial financial shortfalls for hospitals operating on low profit margins" (Seaman, Reuters, 1/22; Armour, Bloomberg, 1/22).

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