What are Medicare readmission penalties and how do they work?
Each year, Medicare calculates the penalties based on the previous 3 years’ readmission data and then hospitals are penalized up to 3% of their total Medicare payments the following year.
How many hospitals were wrongly penalized by the hospital readmissions reduction program?
Between 10% and 12% of hospitals penalized by the Hospital Readmissions Reduction Program (HRRP) should not have been, according to a study. Lower-revenue hospitals were more likely to be wrongly assessed penalties. In FY21, 2,545 hospitals will face HRRP penalties, with 41 facing the maximum 3% cut in Medicare payments.
What is the average penalty for Medicare penalties?
In its 10th annual round of penalties, Medicare is reducing its payments to 2,499 hospitals, or 47% of all facilities. The average penalty is a 0.64% reduction in payment for each Medicare patient stay from the start of this month through September 2022.
How much did Ohio hospitals get penalized for Medicare fraud?
Overall, out of 3,129 U.S. hospitals included in the penalty program, 2,583 hospitals (83%) received penalties totaling $563 million. The average penalty was 0.71% of total Medicare payments. 56 hospitals received the maximum (3%) penalty. In Ohio, 90% of hospitals were penalized.
When did CMS start penalizing hospitals for readmissions?
Oct. 1, 2012Since the start of the program on Oct. 1, 2012, hospitals have experienced nearly $1.9 billion of penalties, including $528 million in fiscal year (FY) 2017. In FY 2013, payment penalties were based on hospital readmissions rates within 30 days for heart attack, heart failure and pneumonia.
When was Hrrp implemented?
2012The Affordable Care Act (ACA) established the Hospital Readmission Reduction Program (HRRP) in 2012.
Does Medicare penalize hospitals for readmissions?
For the readmission penalties, Medicare cuts as much as 3 percent for each patient, although the average is generally much lower. The patient safety penalties cost hospitals 1 percent of Medicare payments over the federal fiscal year, which runs from October through September.
What is the Medicare readmission policy?
Medicare counts the readmission of patients who returned to a hospital within 30 days even if that hospital is not the one that originally treated them. In those cases, the penalty is applied to the first hospital.
Why did hospitals have limited incentives to reduce readmissions prior to the ACA?
Hospitals had limited incentives to reduce readmissions prior to the Affordable Care Act (ACA)because before ACA hospitals gained income for patients that were in and out of the hospital.
What is the maximum penalty that a hospital can incur based on their readmission rates during the performance period?
About 1 percent of Medicare admissions will occur in hospitals that will receive the maximum penalty, a 3-percent reduction in Medicare payments across all inpatient admissions.
At what level of readmission rates are hospitals penalized?
The average penalty this fiscal year is 0.64%, with 39 hospitals losing the maximum of 3% of reimbursements. Over the lifetime of the program, 2,920 hospitals have been penalized at least once. That's 93% of the 3,139 general acute hospitals subject to HRRP evaluation, and 55% of all hospitals.
What are CMS penalties?
A CMP is a monetary penalty the Centers for Medicare & Medicaid Services (CMS) may impose against nursing homes for either the number of days or for each instance a nursing home is not in substantial compliance with one or more Medicare and Medicaid participation requirements for long-term care facilities.
What is the Medicare readmission rate?
16.9 percentThe overall readmission rate was 14.0 per 100 index admissions, with Medicare stays having the highest readmission rate (16.9 percent) and privately insured stays having the lowest readmission rate (8.7 percent).
What does readmission within 30 days with the same diagnosis mean?
Readmissions during the 30-day period that follow a planned readmission are not counted in the outcome. In the case of multiple readmissions during the 30-day period, the measure counts only one outcome. Readmissions to the same hospital on the same day for the same principal diagnosis are not counted in the outcome.
What is the benchmark for readmission rate?
Benchmark readmission rates, based on the overall rate of readmission within 30 days of discharge for beneficiaries in each of 18 clinical risk groups over the 5-year period, ranged from 5.3% to 41.8% (Table 1).
What hospitals are subject to reimbursement penalties for Hacs?
Which hospitals do the HAC Reduction Program apply to?Critical access hospitals.Rehabilitation hospitals and units.Long-term care hospitals.Psychiatric hospitals and units.Children's hospitals.Prospective Payment System-exempt cancer hospitals.Veterans Affairs medical centers and hospitals.More items...•
How many condition or procedure specific unplanned readmission measures are there?
CMS includes the following six condition or procedure-specific 30-day risk-standardized unplanned readmission measures in the program:
What is CMS payment reduction?
The payment adjustment factor is the form of the payment reduction CMS uses to reduce hospital payments. Payment reductions are applied to all Medicare fee-for-service base operating diagnosis-related group payments during the FY (October 1 to September 30). The payment reduction is capped at 3 percent (that is, a payment adjustment factor of 0.97).
How long does CMS give hospitals to review their HSRs?
CMS sends confidential Hospital-Specific Reports (HSRs) to hospitals annually. CMS gives hospitals 30 days to review their HRRP data as reflected in their HSRs, submit questions about the calculation of their results, and request calculation corrections. The Review and Correction period for HRRP is only for discrepancies related to the calculation of the payment reduction and component results.
When did the Hospital Readmissions Reduction Program start?
The Hospital Readmissions Reduction Program (HRRP) was created by the 2010 Affordable Care Act and began in October 2012 as an effort to make hospitals pay more attention to patients after they leave. Readmissions occurred with regularity — for instance, nearly a quarter of Medicare heart failure patients ended up back in the hospital within 30 days in 2008 — and policymakers wanted to counteract the financial incentives hospitals had in getting more business from these boomerang visits.
How many hospitals are exempt from Medicare?
An additional 2,216 hospitals are exempt from the program because they specialize in children, psychiatric patients or veterans. Rehabilitation and long-term care hospitals are also excluded from the program, as are critical access hospitals, which are treated differently because they are the only inpatient facility in an area. Of the 3,046 hospitals for which Medicare evaluated readmission rates, 82% received some penalty, nearly the same share as were punished last year.
Is Medicare cutting Medicare payments?
The federal government’s effort to penalize hospitals for excessive patient readmissions is ending its first decade with Medicare cutting payments to nearly half the nation’s hospitals.
What is the third year of Medicare readmissions reduction?
The third year of Medicare’s Hospital Readmissions Reduction Program increases the maximum penalty for hospitals and expands the number of conditions the government evaluates.
What is the maximum penalty for CMS?
CMS’ penalties are an “adjustment factor” that will be applied to Medicare reimbursements for care for patients admitted for any reason. The lowest adjustment factor, 0.97, is the maximum penalty; it means that a hospital would be reimbursed only 97 percent of the amount Medicare usually pays. The highest adjustment factor is 1 and means ...
How much would Medicare pay for kidney failure?
Thus, if Medicare would normally pay a hospital $15,000 for a kidney failure patient, with a 1.5 percent penalty Medicare would deduct $225 and pay $14,775.
Do hospitals lose money with 0 percent penalty?
Hospitals receiving a 0 percent penalty are not losing any money. Because the penalty will be applied prospectively over the next federal fiscal year, the exact amount of dollars a hospital will lose is not yet known, although many hospitals can estimate their likely losses based on previous years’ Medicare payments.
What are the consequences of readmissions reduction?
This week the influential peer-reviewed Health Services Research explored another often-discussed unintended consequence of the readmissions reduction program: unfair penalties on safety-net hospitals. The study found that hospitals serving disadvantaged neighborhoods were more likely to pay extra for higher readmissions than hospitals serving more affluent populations—a financial hit to hospitals that are already economically vulnerable. The researchers modeled a method developed by National Academies of Science, Engineering, and Medicine, for adjusting the readmissions calculations to account for “social risk factors” such as poverty and housing stability. According to the researchers, the adjustment would reduce readmissions penalties to safety-net hospitals by over 20 percent, which would have amounted to $17 million for these hospitals between 2012 and 2015.
How long does it take for a discharged patient to return to their johnnies?
But one in six discharged patients in the U.S. are back in their johnnies in less than 30 days, a third of them in less than seven days, at a national cost of more than $41 billion annually. That’s a hefty burden on patients, taxpayers and employers who pay those bills, and awful for patients. To address the issue, a payment program by CMS, ...
How long does it take to get back in the hospital after discharge?
But one in six discharged patients in the U.S. are back in their johnnies in less than 30 days, a third of them in less than seven days, at a national cost of more than $41 billion annually. That’s a hefty burden on patients, taxpayers and employers who pay those bills, and awful for patients.
Is there a need for vigilance in Medicare readmissions?
Still, much more needs to be done. There is a need for ongoing vigilance, flexibility and refinements of the readmissions reduction program. But we should never let the inevitable need for refinements send us backward to the nonsensical policies of the old days, just a decade ago, when Medicare paid the hospitals more when readmissions occurred. This is a policy that works, as long as we make it better together.
Can Medicare adjust for safety net?
There are policies that could address the special circumstances of safety-net hospitals without condemning their patients to a lesser status in the measurement. For instance, instead of adjusting numbers based on the profile of individual patients, Medicare could adjust for the profile of individual hospitals. ...
Is Medicare coding a devilish issue?
Commenters suggest these problems call into question the value of the entire program. But let’s not throw the baby out with the bathwater. Other studies have found promising results without the disturbing uptick in mortality rates, so the jury is still out. And coding problems are always a devilish issue in the Medicare program, by no means unique to the readmissions reduction effort. There are ways to fix them.
What are the conditions covered by Medicare readmission?
The readmission rates initially only applied to Medicare patients suffering from heart failure, heart attacks, and pneumonia, but the program was expanded to encompass other conditions such as knee and hip replacements and coronary artery bypass graft surgery.
What to do if you have a readmission from Medicare?
If you're a Medicare patient who suspects that you've received inadequate care associated with a hospital readmission, then consider talking to an attorney. A health care attorney can provide answers for you and can give you guidance on necessary steps to take.
What is a Hospital Readmission?
A hospital readmission is an event that occurs when a patient who had been previously discharged is readmitted within a designated period. This is a bad situation for most patients, as it suggests inadequate care.
Why are hospital readmissions problematic?
Rehospitalizations are problematic for Medicare because they reflect a failure in care and subsequent hospital readmissions result in greater costs. This article discusses the relationship between hospital readmissions ...
When did HRRP start?
Since the implementation of the HRRP in 2012, hospital readmission rates for Medicare patients have decreased. Despite the apparent success, there is criticism about the program itself and whether it adequately deals with the issue at the expense of patient care.
How long does it take for a hospital to readmit?
According to Medicare, a hospital readmission is "an admission to an acute care hospital within 30 days of discharge from the same or another acute care hospital." However, a readmittance for follow-up care does not constitute a "readmission" for Medicare.
What is the premature discharge to a setting (usually their home) where the patients' needs aren't met?
Additionally, the premature discharge to a setting (usually their home) where the patients' needs aren't met for post-hospital care makes it highly likely that the patients will be readmitted.
How does the Hospital Readmissions Reduction Program adjust payments?
For each eligible hospital, we calculate the payment adjustment factor. The payment adjustment factor corresponds to the percent a hospital’s payment is reduced. The payment adjustment factor is a weighted average of a hospital's performance across the six HRRP measures during the HRRP performance period. We apply the payment adjustment factor for all discharges in the applicable fiscal year, no matter the condition.
What are applicable Hospital Readmissions Reduction Program hospitals?
Section 1886 (d) (1) (B) of the Social Security Act defines applicable hospitals under HRRP.
What measures are included in the Hospital Readmissions Reduction Program?
We use the excess readmission ratio (ERR) to assess hospital performance. The ERR measures a hospital’s relative performance and is a ratio of the predicted-to-expected readmissions rates. We calculate an ERR for each condition or procedure included in the program:
How will I know whether CMS incorporated changes to the Hospital Readmissions Reduction Program?
These changes are published annually after a public comment period, with the Inpatient Prospective Payment System /Long-Term Care Hospital Prospective Payment System (IPPS/LTCH PPS) Final Rule.
What is the Review and Correction period?
The 30-day Review and Correction period allows applicable hospitals to review and correct their HRRP Payment Reduction and component result calculations as reflected in their HSR (i.e., Payment Adjustment Factor, Dual Proportion, Peer Group Assignment, Neutrality Modifier, ERR, and Peer Group Median ERRs) prior to them being used to adjust payments. Hospitals can’t submit corrections to the underlying claims data or add new claims to the data extract during this period.
How long does it take for an unplanned readmission to happen?
Unplanned readmissions that happen within 30 days of discharge from the index (i.e., initial) admission. Patients who are readmitted to the same hospital, or another applicable acute care hospital for any reason. Readmissions to any applicable acute care hospital are counted, no matter what the principal diagnosis was.
When did the HRRP start?
Section 3025 of the Affordable Care Act required the Secretary of the Department of Health and Human Services to establish the HRRP starting October 1, 2012 (i.e., Federal Fiscal Year [FY] 2013).
How much is HRRP penalty?
The issue also likely affected the size of penalties on hospitals, the authors concluded. HRRP penalties range from 0% to 3% of all Medicare fee-for-service payments during a performance period.
How many hospitals will face HRRP penalties in FY21?
In FY21, 2,545 hospitals will face HRRP penalties, with 41 facing the maximum 3% cut in Medicare payments.
How much was the HRRP cut in FY21?
The HRRP produced $553 million in hospital cuts for FY21, CMS estimated. That was a slight decrease from FY20, when 2,583 hospitals incurred $563 million in penalties and 56 hospitals had the maximum cut.
When did the HRRP change?
The HRRP has undergone several changes since penalties first were assessed in 2012, including an effort to account for socioeconomic differences among hospitals with larger shares of low-income patients. But a growing body of research has been critical of the program.
Who doubted executives at individual hospitals could determine whether their organization wrongly faced HRRP penalties?
Shen doubted executives at individual hospitals could determine whether their organization wrongly faced HRRP penalties, given that they would need access to other hospitals’ data as well.
Does readmission reduce readmission rates?
The use of readmission measures also drew significant focus when a study of the high-profile Camden Coalition of Healthcare Providers, which focused on coordinating outpatient care and social services for patients with complex medical and social needs after hospital discharge, found it did not significantly reduce readmission rates.
Does HRRP reduce readmissions?
For instance, a January 2019 study in Health Affairs found the HRRP either had no effect on readmissions or led to an industrywide reduction in readmissions that was roughly half as large as prior estimates suggested.
How much does Medicare cut for readmissions?
For the readmission penalties, Medicare cuts as much as 3 percent for each patient, although the average is generally much lower.
Why are Maryland hospitals exempt from Medicare penalties?
Maryland hospitals are exempted from penalties because that state has a separate payment arrangement with Medicare.
