More than 2,200 hospitals face penalties under ObamaCare rules

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Report: Gov't to punish hospitals for 'excess readmissions'

Jonathan Serrie reports from Atlanta, Georgia

A provision of ObamaCare is set to punish roughly two-thirds of U.S. hospitals evaluated by Medicare starting this fall over high readmission rates, according to an analysis by Kaiser Health News.

Starting in October, Medicare will reduce reimbursements to hospitals with high 30-day readmission rates -- which refers to patients who return within a month -- by as much as 1 percent. The maximum penalty increases to 2 percent the following year and 3 percent in 2014.

Doctors are concerned the penalty is unfair, since sometimes they have to accept patients more than once in a brief period of time but could be penalized for doing so -- even for accepting seniors who are sick.

"Among patients with heart failure, hospitals that have higher readmission rates actually have lower mortality rates," said Sunil Kripalani, MD, a professor with Vanderbilt University Medical Center who studies hospital readmissions. "So, which would we rather have -- a hospital readmission or a death?"

But according to federal government figures, nearly one in five Medicare patients is readmitted to a hospital within 30 days of release, costing taxpayers an estimated $17.5 billion.

"Readmissions has been a low-hanging fruit for Medicare," said Jordan Rau, a staff writer with KHN, an editorially independent program of the non-partisan Kaiser Family Foundation. "They've been very unhappy that about 2 million Medicare beneficiaries are being readmitted every year between 30 days of discharge."

Medicare evaluated readmission rates at 3,367 of the nation's hospitals and will impose penalties on 2,211 starting in October, according to KHN. The analysis shows 278 hospitals will receive this year's maximum penalty of 1 percent. On the other side of the spectrum, 50 hospitals will receive the minimum penalty of 0.01 percent, KHN reports.

The penalties are intended to create financial incentives for the quality of care hospitals provide, instead of the number of procedures. But physicians debate whether readmission rates are the best measure of outcomes.

Kripalani and some other physicians are concerned that readmissions-based penalties may have a disproportionate effect on research hospitals because they handle large numbers of complex cases.

"Often these kinds of institutions take care of the most sick patients," Kripalani said. "They're sent patients by other hospitals because of specific expertise they have. So, perhaps it shouldn't be surprising that some of the nation's best hospitals do have slightly higher readmission rates compared to other hospitals."

The list of hospitals facing penalties includes nationally known names such as Vanderbilt, University of Chicago Medical Center and Massachusetts General, according to Medicare data compiled by KHN.

Some physicians are also concerned about what impact Medicare penalties will have on "safety-net" hospitals that treat large numbers of poor patients with limited access to primary and followup care. However, researchers who helped Medicare develop its quality assessment guidelines say the measures take into account the relative illness of patients coming into each hospital.

"The readmission measures are risk-adjusted measures," said Susannah Bernheim, MD, director of quality measurement programs at Yale School of Medicine's Center for Outcomes Research & Evaluation (CORE). "So, if safety-net hospitals are caring for patients that are generally sicker, that's going to be accounted for by the measures. What I think is really remarkable is how well many safety-net hospitals in this country do on the readmission measure."

Bernheim added that the risk-adjustment also applies to research/teaching hospitals serving the sickest patients.

"These measures represent what a patient really experiences," Bernheim said. "And as long as they're designed in a scientifically sound way, they're going to really help move the quality of our health care system forward in meaningful ways."

Physicians debate how much control hospitals actually have over readmission rates since many patients return after failing to follow recommended outpatient treatment, medication and dietary guidelines.

But faced with penalties, the nation's medical centers now have a financial incentive to seek improvements to the way they follow up with patients after they're released.

"There's a real question and a real heavy debate about whether it's fair to hold the hospital responsible for that," Rau of Kaiser Health News said. "Medicare's answer has been that the problem overall with the health care system is that no one's ever in charge. And so they've decided to tell the hospitals, 'Like it or not, your fault or not, you're in charge.'"