96% Medicare Penalty for Readmissions?

Medicare has announced plans to penalize 2, 633 hospitals for giving follow-up care to seniors, even if the care was appropriate, according to an online report by Medical News. Northwestern Memorialin Chicago, the largest hospital in Illinois, did 1, 651 elective hip and knee replacements for Medicare between 2009 and 2012. The hospital faces the possibility of paying 46% of the revenue from those operations as a penalty.

In Philadelphia, Pennsylvania Hospital of the University of Pennsylvania did 1, 020 replacements and will pay 57% of that revenue as a penalty. Parkwest Medical Center in Knoxville did 1, 079 replacements and will pay a 31% penalty. The Medical Center of the University of California at Davis did 226 replacements and will pay a 27% penalty.

Another example is Froedtert Memorial Lutheran in Milwaukee which did 245 replacements and may pay a 96% penalty. Nationwide, 223 hospitals face penalties which are over a fifth of their revenue from hip and knee replacements.

Hospitals pay these penalties if they readmit more seniors within 30 days after discharge than the national average. The hospitals listed above readmitted 7% to 10% of their patients after hip and knee replacements. The national average is 5%. Medicare released the new rules with data to estimate these penalties on May 15.

According to the Medical News writer, hospitals cannot give up this much revenue, and may need a new business model that would reduce their treatment of Medicare patients. The American College of Surgeons warned Medicare last year about “the potential that these hospitals will decrease their care for such patients, thereby creating an access issue.” They pointed out that seniors who cannot get hip and knee replacements lose the mobility they need to stay healthy.

Medicare charges these penalties one to four years after treatment, even though the readmissions were fully approved by doctors and Medicare at the time of treatment, and were paid for by Medicare.

Doctors Karen Joynt and Ashish Jha of Harvard, writing in the January 23, 2013 issue of the Journal of the American Medical Association, found that the penalties fall heaviest on hospitals which serve the neediest patients. They wrote that “large hospitals, teaching hospitals, and safety net hospitals are more likely to receive payment cuts” from readmission penalties. They wrote that readmissions are, “likely related to both case mix (medical complexity) and socioeconomic mix of the patient population.” A list of penalties for every hospital, based on Medicare data, is at Globe1234.com. Medicare will take comments on the readmission penalties until June 30.