CMS penalizes 2,273 hospitals for high readmission rates, lowest since 2014

Editor's Note 

The Centers for Medicare & Medicaid Services (CMS), through the Hospital Readmissions Reduction Program, evaluated more than 2 years of readmission cases for Medicare patients and penalized 2,273 hospitals, Kaiser Health News November 1 reports. This is the lowest number of penalties since 2014.

The Hospital Readmissions Reduction Program, created by the Affordable Care Act and a part of Medicare’s hospital payment system, analyzes the return rates of Medicare patients within 30 days of leaving hospitals. This program lowers payments to hospitals that had higher than expected readmission rates.

CMS made the decision to exclude the first half of 2020 in their evaluation due to the unforeseen challenges of COVID-19. “The covid pandemic did a lot of really unprecedented things to care patterns of hospitals,” a health leader notes, adding that the change was necessary.

CMS evaluated readmission rates for the nation’s 5,236 hospitals and penalized 2,273 hospitals, a total of 43%. The average payment reduction was 0.43%, also the lowest average since 2014. The reductions will take effect through the next 12-month period, costing the penalized hospitals $320 million.

Also found in the CMS evaluation:

• 2193 of the unpenalized hospitals were automatically exempted.
• The exempted hospitals include those that specialize in children, psychiatric patients, or veterans.
• Rehabilitation, long-term care hospitals, and critical access hospitals are also excluded from the program.
• The government also exempted Maryland hospitals because that state has a special payment arrangement with Medicare.
• 75% of the Medicare assessed hospitals were penalized.

COVID-19 has caused a significant disruption in healthcare, the report notes. The fallout of the pandemic will likely affect CMS measurements for a couple of years.