Once again, Medicare penalizing most hospitals for patient readmission rates

Four out of five Georgia hospitals are set to receive Medicare penalties for having too many patients returning within a month of their discharge.

The readmission penalties, levied under the Affordable Care Act, are meant to encourage hospitals to pay closer attention to what happens to patients after discharge.

Kaiser Health News reported Thursday that Medicare is punishing 2,573 hospitals nationally, just two dozen short of what it did last year, according to federal records. Starting in October, the federal government will cut those hospitals’ payments by as much as 3 percent for a year.

Of the 100 Georgia hospitals evaluated for penalties, 82 received the fines. That percentage is similar to the national average. KHN’s analysis found that of the 3,241 hospitals whose readmissions were evaluated, Medicare penalized four out of five, KHN’s analysis found.

Last year, 89 percent of Georgia hospitals drew the readmission fines.

High rates of readmissions have been a safety concern for decades. KHN noted that in 2011, 3.3 million adults returned to the hospital, running up medical costs estimated at $41 billion, according to the federal Agency for Healthcare Research and Quality.

A hospital can be penalized even if its unexpectedly high readmission rates are for just one of the six conditions targeted. Those conditions are heart attacks, heart failure, pneumonia, chronic lung disease, hip or knee replacements, and coronary artery bypass graft surgery.

Hospitals were evaluated on patients discharged between July 2013 and June 2016.

St. Francis Hospital

Nationally, more than 1,500 hospitals were exempted from penalties, including those treating veterans, children and psychiatric patients. Small, “critical access” hospitals, which Medicare also pays differently because they are the only hospitals in their areas, also were excluded.

The 18 hospitals in Georgia that did not receive penalties include rural facilities such as Evans Memorial in Claxton and Fannin Regional in Blue Ridge. Major urban/suburban hospitals avoiding readmission fines include Gwinnett Medical Center in Lawrenceville, Piedmont Athens Regional in Athens, and St. Francis Hospital in Columbus.

(Here’s a link to the list of Georgia hospitals and their penalties. Scroll down to the link that says Medicare Readmission Penalties by Hospital and download the spreadsheet.)

This year, the national average penalty will be 0.73 percent of each payment Medicare makes for a patient between Oct. 1 and Sept. 30, 2018, according to a Kaiser Health News analysis. Forty-eight hospitals nationally – including Georgia’s Chestatee Regional in Dahlonega — received the maximum punishment of a 3 percent reduction.

“Of the 100 Georgia hospitals evaluated in the Hospital Readmissions Reduction Program, 72 either had no penalties or were docked below the national penalty average of .73 percent for each Medicare payment,’’ Earl Rogers, president of the Georgia Hospital Association, said in a statement Friday. “Although many hospital readmissions remain outside of hospitals’ control, this data shows that hospitals in the state are making significant improvements in areas that can be influenced.

“Georgia hospitals take these reports seriously and will continue to work diligently to reduce readmission rates.”

Evans Memorial

Medicare has said the penalty program replaced a system that inadvertently rewarded hospitals for readmissions. Under that system, a readmission counted as a separate hospital stay, so the facility got paid for two stays instead of one.

The penalties, which begin their sixth year in October, have coincided with a nationwide decrease in hospital repeat patients, KHN’s Jordan Rau reported. Between 2007 and 2015, the frequency of readmissions for conditions targeted by Medicare dropped from 21.5 percent to 17.8 percent, with the majority of the decrease occurring shortly after the health law passed in 2010, according to a study in the New England Journal of Medicine..

Some hospitals began giving low-income patients free medications prescribed for their recovery, while others sent nurses to check up on patients considered most likely to relapse in their homes, KHN reported. Readmissions dropped more quickly at hospitals potentially subject to the penalty than at other hospitals, another study found.

“The sum of the evidence really suggests that this program is helping people,” said Dr. Susannah Bernheim, of the Yale-New Haven Hospital Center for Outcomes Research and Evaluation.

But the reductions have been leveling off in the past few years, suggesting that the penalties’ ability to induce improvements may be waning. “Presumably, hospitals made substantial changes during the implementation period but could not sustain such a high rate of reductions in the long term,” the New England Journal article said.

“We have indeed reached the limits of what changes in how we deliver care will allow us to do,” said Nancy Foster, vice president for quality at the American Hospital Association. “We can’t prevent every readmission. It could be that there is further room for improvement, but we just don’t know what the technique is to make that happen.”

This year, the average penalty will be 0.73 percent of each payment Medicare makes for a patient between Oct. 1 and Sept. 30, 2018, according to a Kaiser Health News analysis. Forty-eight hospitals nationally – including Georgia’s Chestatee Regional in Dahlonega — received the maximum punishment of a 3 percent reduction.

Every non-excluded hospital in Delaware and West Virginia will have its reimbursements reduced, KHN noted. Ninety percent or more will be punished in Arizona, Connecticut, Florida, Kentucky, Massachusetts, Minnesota, New Jersey, New York and Virginia. Sixty percent or fewer will be penalized in Colorado, Kansas, Idaho, Montana, Oregon, South Dakota and Utah.

Congress last year instructed Medicare to make one future alteration in response to complaints from safety-net hospitals and major academic medical centers.


The hospitals, including Grady Memorial in Atlanta, have objected that their patients tend to have lower incomes than those in other hospitals and are more likely to return to the hospital, some because they don’t have a primary care doctor and others because they can’t afford the right medication or diet.

These hospitals argue that this is a disadvantage for them because Medicare bases its readmission targets on industry-wide trends and that it hurts them financially, depriving them of resources they could use to help those same patients.

In October 2018, Medicare will begin basing the penalties on how hospitals compare to their peer groups with similar numbers of poor patients, KHN reported.

Bernheim noted that despite the complaints of safety-net hospitals about the fairness of the process, they have shown some of the greatest drops in readmission rates.