Lower Medicare reimbursement rates are coming in October of 2012, to 2,211 hospitals around the country, including 131 in Florida. This is allegedly due to excessive readmission rates in these hospitals between July 2008 and June 2011, according to the Centers for Medicare and Medicaid Services (CMS). This story was originally reported by Kaiser Health News on August 13, 2012, and by other sources.
Starting in October 2012, Millions of Dollars in Penalties will be Deducted from Medicare Reimbursements.
Starting October 1, 2012, penalties will be deducted from Medicare reimbursements each time a hospital submits a claim.
All together these hospitals will give up about $280 million in Medicare funds over the next year as the government begins a push to start paying health care providers based on the quality provided, according to the Kaiser Health News article. The government apparently considers readmissions a prime symptom of an overly expensive and uncoordinated health system.
The CMS records show nine hospitals in Florida, including Florida Hospital in Orlando, will deal with a one percent (1%) decrease caused by the penalties.
Medicare Attempting to Lower Readmission Rates.
According to the CMS nearly two million Medicare beneficiaries return to the hospital within a month of being discharged, costing Medicare $17.5 billion in additional hospital bills. CMS states the national average readmission rate is slightly above nineteen percent (19%).
Who Will Lose the Most Medicare Funds?
The penalties will fall heaviest on hospitals in New Jersey, New York, the District of Columbia, Arkansas, Kentucky, Mississippi, Illinois, and Massachusetts. Hospitals that treat mostly low-income patients will be hit particularly hard as well. This is all according to the report by Kaiser Heath News.
The analysis of the penalties shows seventy-six percent (76%) of the hospitals that have a majority of low-income patients will lose Medicare funds.
More Than 1,100 Hospitals Will Not Be Penalized.
The CMS report found 1,156 hospitals with acceptable readmission rates. Those hospitals will not lose any money. The analysis showed, on average, the readmission penalties were lightest on hospitals in Utah, South Dakota, Vermont, Wyoming and New Mexico. Idaho was the only state where no hospital was penalized by Medicare.
The Maximum Penalty to Increase Next Year.
The CMS notes the maximum penalty will increase to two percent (2%) starting in October 2013, and then to three percent (3%) the following year.
These penalties are part of an effort by Medicare to use its financial backbone to force improvements in hospital quality.
On top of the readmission reduction program, on August 27, 2012, the CMS will begin the Recovery Audit Prepayment Review (RAPR), in which Recovery Audit Contractors (RACs) will review a number of hospitals’ Medicare claims.
I previous wrote about the RAPR, click here to read that post.
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Rua, Jordan. “Medicare To Penalize 2,211 Hospitals For Excess Readmissions.” Kaiser Health News. (August 13, 2012). From: http://www.kaiserhealthnews.org/stories/2012/august/13/medicare-hospitals-readmissions-penalties.aspx?referrer=search
Kaiser Health News. “First Hospital Penalties for High Readmissions Detailed.” Kaiser Health News. (August 13, 2012). From: http://www.kaiserhealthnews.org/daily-reports/2012/august/13/quality-issues.aspx?referrer=search
Health News Florida. “Readmit Rates Cost FL Hospitals.” Health News Florida. (August 13, 2012). From: http://www.healthnewsflorida.org/hnf_stories/read/readmit_rates_cost_fl_hospitals
About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.
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