What Hospitals are Doing to Prepare for Medicare Readmission Penalties

Beckershospitalreview.com: Written by Elliot Zemel, JD, Fenton Nelson | May 23, 2012.

CMS began publicly reporting hospital readmission rates in July 2009. These reports highlight the amount of resources wasted by reimbursing care provided for potentially avoidable readmissions and spurred many proposals to reduce hospital readmissions as part of healthcare reform. According to some estimates, Medicare spends more than $12 billion a year in expenses associated with potentially avoidable readmissions. One study showed that 19.6 percent of all Medicare beneficiaries who had been discharged from a hospital were re-hospitalized within 30 days.

The Patient Protection Affordable Care Act, signed into law in 2010, calls for the nation to embrace strategies of quality improvement in healthcare. One such strategy requires hospitals to begin reducing their readmission rates within the context of quality improvement mandates. Under PPACA’s Hospital Readmission Reduction Program, hospitals with high readmission rates stand to lose up to 3 percent of their regular Medicare reimbursements. This 3 percent penalty comes in addition to any other cuts that Medicare may make over the coming years and/or any other penalties Medicare will be enforcing as well. The program goes into effect in fiscal year 2013, which begins Oct. 1, 2012. During the program’s first year, penalty limits will be capped at 1 percent.  Read More