In quality push, hospitals face Medicare penalty over readmissions

More than 2,000 hospitals — including some prominent Tampa Bay facilities and nationally recognized institutions — will be penalized by the government starting in October because many of their patients are readmitted soon after discharge, new records show.

Together, these hospitals will forfeit about $280 million in Medicare funds over the next year as the government begins a wide-ranging push to start paying health care providers based on the quality of care they provide.

With nearly one in five Medicare patients returning to the hospital within a month of discharge, the government considers readmissions a prime symptom of an overly expensive and uncoordinated health system. Hospitals have had little financial incentive to ensure patients get the care they need once they leave. In fact they benefit financially when patients don't recover and return for more treatment.

Nearly 2 million Medicare beneficiaries are readmitted within 30 days of release each year, costing Medicare $17.5 billion in additional hospital bills. The national average readmission rate has remained steady at slightly above 19 percent for several years, even as many hospitals have worked harder to lower theirs.

• • •

The penalties, authorized by the 2010 health care law, are part of a multipronged effort by Medicare to use its financial muscle to force improvements in hospital quality. In a few months, hospitals will be penalized or rewarded based on how well they adhere to basic standards of care and how patients rated their experiences.

Overall, Medicare has decided to penalize around two-thirds of the hospitals whose readmission rates it evaluated, records show.

The penalties will fall heaviest on hospitals in New Jersey, New York, the District of Columbia, Arkansas, Kentucky, Mississippi, Illinois and Massachusetts, a Kaiser Health News analysis of the records shows.

A total of 278 hospitals nationally will lose the maximum amount allowed under the health care law: 1 percent of their base Medicare reimbursements. Several of those are top-ranked institutions, including Beth Israel Deaconess Medical Center in Boston, a teaching hospital of Harvard Medical School.

"A lot of places have put in a lot of work and not seen improvement," said Dr. Kenneth Sands, senior vice president for quality at Beth Israel. "It is not completely understood what goes into an institution having a high readmission rate and what goes into improving" it.

In the Tampa Bay area, only Northside Hospital in St. Petersburg, part of the HCA chain, will get the full 1 percent penalty.

Some, including the Morton Plant hospitals, will receive no penalty.

Critical to success are hand-offs and transitions, said Dr. Bruce Flareau, executive vice president over quality efforts at the BayCare Health System, which includes the Morton Plant Mease hospitals.

That means hospital-based doctors and nurses must communicate with the social workers, physical therapists and primary care doctors treating the patient at home.

A readmission could be avoided if the team helps the patient who can't afford to fill a prescription, or lacks transportation to a follow-up medical appointment.

Keep up with Tampa Bay’s top headlines

Subscribe to our free DayStarter newsletter

We’ll deliver the latest news and information you need to know every morning.

Loading...

You’re all signed up!

Want more of our free, weekly newsletters in your inbox? Let’s get started.

Explore all your options

"I don't think there's an easy button here," Flareau said. "You're moving from a cottage industry where physicians were the unique provider of care to now a team provider of care."

• • •

The rising stakes have hospitals' attention.

The maximum penalty will increase after this year, to 2 percent of regular payments starting in October 2013 and then to 3 percent the following year. This year, the $280 million in penalties comprise about 0.3 percent of the total amount hospitals are paid by Medicare.

According to Medicare records, 1,933 hospitals will receive penalties less than 1 percent; the total number of hospitals receiving penalties is 2,211. Massachusetts General Hospital in Boston, which U.S. News last month ranked as the best hospital in the country, will lose 0.5 percent of its Medicare payments because of its readmission rates, the records show.

The penalties have been intensely debated. Studies have found that African-Americans are more likely to be readmitted than other patients, leading some experts to be concerned that hospitals that treat many blacks will end up being unfairly punished. Hospitals have been complaining that Medicare is applying the rule more stringently than Congress intended by holding them accountable for returning patients no matter the reason they come back.

Some safety-net hospitals that treat large numbers of low-income patients tend to have higher readmission rates, which the hospitals attribute to the lack of access to doctors and medication these patients often experience after discharge.

But in the Tampa Bay area, Tampa General, a safety net hospital, is on the low end of the penalties.

The analysis of the penalties shows that 76 percent of the hospitals that treat lots of low-income patients will lose Medicare funds in the fiscal year starting in October.

The government's penalties are based on the frequency that Medicare heart failure, heart attack and pneumonia patients were readmitted within 30 days between July 2008 and June 2011. Medicare took into account the sickness of the patients when calculating whether the rates were higher than those of the average hospital, but not their racial or socio-economic background.

The penalty will be deducted from reimbursements each time a hospital submits a claim starting Oct. 1.

Times staff writer Letitia Stein contributed. Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization.