Medicare Penalizing Hospitals for Readmission Rates Under ACA

In an effort to emphasize quality of hospital care over quantity, the Centers for Medicare & Medicaid Services (CMS) have reported their second round of reimbursement reductions under the Hospital Readmissions Reduction Program. This key provision of the Affordable Care Act went into effect October 1, 2012; this year, CMS will reduce Medicare and Medicaid reimbursements to more than two thousand hospitals nationwide.

The CMS’*Hospital IQR program has established a national average for readmissions for heart attacks, heart failure, and pneumonia, and has monitored hospitals’ performance on each, since 2009. Hospitals have been required to participate in the program for reporting purposes, but were not penalized for their actual performance prior to the Hospital Readmissions Reduction Program.

Readmission applies to any patient who visits any hospital within 30 days of their initial discharge the same complaint, unless it is a planned readmission. Hospitals reporting excessive reimbursements will face reimbursement reductions calculated by algorithms available on the CMS Web site. CMS’ goal in implementing the HRRP is eliminate the “double dipping” incentive for hospitals to readmit patients by providing incomplete care during their initial admission.

Hospitals facing higher penalties are disproportionately located in underprivileged communities. Patients in these facilities are more susceptible to “preventable” causes of readmission, including the inability to purchase costly medication or to follow necessary but untenable discharge instructions. Slightly more than half of the hospitals facing reduction, however, have lowered their penalty amount due to procedural changes such as improved technology and discharge planning for patients.

One of the most important discharge instructions is follow-up with a physician. Some hospitals have begun locating a primary care provider for patients without one; others have opened their own clinics to provide post-discharge care to patients who cannot otherwise access a PCP.

Proposed rules for fiscal years 2014 and 2015 will include COPD, elective total hip arthroplasty, and total knee arthroplasty in future readmission calculations.

If you do work for a hospital facing reduction, PRN Funding’s healthcare factoring program can help you maintain a steady cash flow despite reimbursement reductions at the hospitals you serve.

Learn more about healthcare factoring and apply today.

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