Medicare Rules for Hospital Readmission Rates Lessen Financial Burden

According to a research published in JAMA Internal Medicine, Medicare reimbursement rules that went into effect in January are shifting the financial burden of readmission rate penalties to hospitals that serve wealthier populations.

Karen E Joynt Maddox, MD, MPH, cardiovascular division, department of medicine, Washington University School of Medicine, St Louis, MO, and colleagues examined how the Hospital Readmissions Reduction Program (HRRP), “in which hospitals are judged within 5 peer groups based on the proportion of their patients who are dually enrolled in Medicare and Medicaid,” are effected by the latest rule changes.

According to a press release that discussed Dr Joynt Maddox’s study, HRRP can cut a hospital’s Medicare reimbursements by up to 3% and has in the past been criticized for unfairly penalizing “safety-net hospitals” where the majority of the patient population is on the lower income end of the spectrum.

“The new rules recognize the reality that it is harder to prevent readmissions when people don’t have stable housing or social support,” said Dr Joynt Maddox in a press release. “If you have patients who struggle to put food on the table, it’s going to be tougher for them to manage their end-stage heart failure. The old system took money away from hospitals that serve the most vulnerable patients. It created a significant disincentive to provide health care to poor people, and that’s the last thing we want.”

According to the study, the new rule can increase penalties more than $12 million for the hospitals serving the fewest poor patients. In comparison, penalties for the hospitals serving the highest proportion of poor patients are projected to decrease by more than $22 million. On an individual hospital level, the changes are projected to range from an increase in penalties of $225,000, to a decrease of $436,000.

“This was a positive change for the HRRP,” Dr Joynt Maddox said. “Making the program more fair doesn’t take away from its goal, which is to use financial incentives to make hospitals think differently about care beyond their walls. Hospitals are increasingly working to provide a soft landing, including discharge planning and communication with outpatient care providers.”—Edan Stanley