An Obamacare program that penalizes hospitals for too many patient readmissions unfairly targets facilities that treat many low-income residents, lawmakers and hospitals charge.
The Centers for Medicare and Medicaid Services said more than 2,000 hospitals will be penalized under an Obamacare-mandated program. Hospitals with a high rate of certain patients being readmitted as much as 30 days after discharge will find their Medicare payments reduced for a year.
This year, 2,662 hospitals will face penalties from the government, which is slightly more than the 2,638 in 2014, according to the agency, which administers the penalties. Many of the hospitals are repeats from last year, according to Kaiser Health News. The payment reductions for the 2,662 hospitals starts in October, last for one year and result in $420 million in savings for the government.
The Hospital Readmissions Reduction Program is part of a major push in Obamacare to shift healthcare payments toward the quality of care and not just a fee for service.
The program was implemented at the end of 2012. Only a year later, the readmission rate in hospitals dropped to about 17 percent after holding steady at 19 percent for many years, according to a March report from the American Hospital Association.
But critics charge that the quality metric has caused hospitals to pay for readmissions that aren’t their fault.
For instance, the agency doesn’t adjust the penalty based on socioeconomic factors, the report charged. “Research shows that economically disadvantaged patients often have limited access to services and resources that can help support their recovery,” the report noted.
Some senators are also upset at the perceived lack of understanding.
“Targeting hospitals for penalties, even if indirectly, simply because those hospitals care for more poor patients is not good policy,” wrote Sens. Joe Manchin, D-W.Va., and Roger Wicker, R-Miss., in an opinion piece last week in the Journal of the American Medical Association.
The opinion piece notes that safety-net hospitals were more than 60 percent more likely to be penalized than non-safety-net hospitals.
Manchin and Wicker joined a group of three other senators to introduce a bill that they say reforms the program so hospitals serving low-income patients are treated better.
CMS responded that a 2014 law calls for government advisers to study socioeconomic factors and provide recommendations on how to handle them. The agency will consider any recommendations.
The agency also must assess data collection on socioeconomic factors and will monitor the impact on providers’ results, the agency said.
In a rule published Friday, the agency said it is working with the nonprofit National Quality Forum, which is doing a two-year trial to test socio-demographic factors.
However, hospitals aren’t just upset about the lack of exemptions for socioeconomic conditions. They also say they are on the hook for readmissions that aren’t their fault.
“If someone fractures his leg after being hospitalized for pneumonia and is readmitted, that would count toward a readmission penalty,” said Paul Janke, CEO of Bay Area Hospital in Oregon. Janke spoke in the hospital association’s report.
The group said the government should instead focus on avoidable, unplanned readmissions such as an infection after receiving a surgical procedure.
The program does take into account certain factors such as the patient’s frailty.
It focuses on readmissions for patients treated for five conditions: heart failure, heart attack, pneumonia, chronic lung problems and emphysema. When the program debuted in 2012 there were only three conditions, but it has expanded to five.
CMS looks at the total readmissions and determines the penalty, which is meted out via a reduction in Medicare payments for a year.
The 2,662 hospitals facing penalties won’t see reduced payments until Oct. 1, the start of the federal fiscal year, and they won’t end until September 2016.
The payment reduction depends on the readmission rate for the hospital, with the highest reduction up to 3 percent. The penalty also applies to patients admitted for any condition, not just the five conditions used to determine the readmission rate, the agency said.
To determine the penalty rate, the agency looks at three years of discharge data. It calculates the penalty by using a formula that looks at readmissions for the five conditions compared with an average of comparable hospitals, according to the hospital association’s report.
