Fewer Medicare Patients Return to
Hospital in First Year of Medicare Penalties
Medicare targeting rehospitalizations
as a significant indicator of gaps in medical quality in the nation’s
By Jordan Rau, Kaiser Health News Blog
9, 2013 - During the first eight months of this year, fewer than 18
percent of Medicare patients ended up back in the hospital within a
month of discharge, the lowest rate in years, the government reported
Friday. This drop occurred during the first year that Medicare
financially penalized hospitals for their readmission rates, and the
government seized on the decrease as evidence the incentives are having
The government is targeting
rehospitalizations as a significant indicator of gaps in medical quality
in the nation’s hospitals. While some elderly patients inevitably return
to the hospital, the government and some researchers believe many of
those returns are avoidable if hospitals monitor patients after their
release to ensure they get appropriate medications and follow-up visits
In the first year of the program,
which began in August 2012, Medicare
fined 2,213 hospitals—about two-thirds of those it evaluated— for
higher than anticipated readmission rates. Last August, Medicare issued
a second year of penalties against 2,225 hospitals. The maximum
penalties created by the health law have risen from 1 percent of regular
Medicare payments to 2 percent, and they will increase for a third and
final time next August to 3 percent.
Medicare said this year’s decrease translated into 130,000 fewer
readmissions nationally. Three out of every four local hospital markets
experienced a decrease in readmission rates of a half-percent or more.
Only one state—Utah—did not see a drop, and Medicare noted that state’s
rates were already among the lowest in the country.
“We can see that the decline in
all-cause readmission rates that began in 2012 is continuing this year
on a widespread basis,” the Centers for Medicare & Medicaid Services
wrote on the agency blog. “While we continue to monitor and study
these encouraging reductions, what is clear is that intense focus on
reducing hospital readmissions through improved processes of care and
new tools in the Affordable Care Act are having a demonstrably positive
The penalty program has not been
particularly welcome among hospitals, with many complaining that it
unfairly hits facilities that treat large numbers of low-income
patients. Dr. Atul Grover, the chief public policy offer of the
Association of American Medical Colleges, questioned whether the drop in
readmissions was due to improvements in patient care or hospital efforts
to avoid formally admitting return patients who show up in their
emergency rooms, and instead keeping them for a day or two for “observation.”
Medicare does not count those patients when tallying rehospitalization
“If you think about the growth in
observation status that’s been reported over the last six months, I
think it’s potentially an issue,” Grover said.
Medicare did not publish the
individual readmission rates for hospitals that were used in this
analysis, and its public listing of rates on its Hospital Compare
has not been updated since July 2012. Medicare’s new analysis looked
at readmissions of patients with any kind of problem within 30 days of
discharge, while Hospital Compare only reports 30-day readmission rates
for three common conditions: heart failure, heart attack and pneumonia.
Because Medicare decides penalties
by comparing a hospital’s rate to how many patients their peers readmit,
it is likely that many hospitals will still be penalized next year even
if their record has improved. Kaiser Health News has published the first
two years’ readmission penalties for individual hospitals, which can be
this interactive tool.
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