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Admit It: Medicare Errs In Crackdown On Hospital Quality

Filed by KOSU News in Health.
October 3, 2012

Medicare has an embarrassing admission about readmissions: It goofed.

A computer programming error led the Centers for Medicare & Medicaid Services to miscalculate financial penalties against hospitals that have high rates of patients returning within 30 days. The Hospital Readmissions Reduction Program, established by the 2010 health care law, kicked in Monday, with 307 hospitals losing 1 percent of their regular reimbursements.

As NPR reported Wednesday the penalties are intended to push hospitals to pay more attention to what happens to patients after they leave and also to neutralize a perverse consequence of the way Medicare reimburses providers: that every readmission ends up being a moneymaker because the hospital gets paid to fix its own mistakes.

Medicare published a list of the penalties in August. But on Friday, the last workday before the penalties started, Medicare published new rates after discovering it inadvertently included data in its calculations that were too old. As a result, 1,422 hospitals are getting hit with slightly higher penalties, while 55 hospitals are getting slight reprieves. A total of 2,217 hospitals will lose some money.

The changes from the error are tiny, amounting on average to a fraction of a percent for most of the affected hospitals. The biggest changes are coming to Florala Memorial Hospital in Florala, Ala., which will see its penalty rise from 0.62 percent to 0.73 percent of its reimbursements, and Western Pennsylvania Hospital in Pittsburgh, which will see its penalty decrease from 0.51 percent to 0.4 percent.

The mistake riles some hospital leaders, who are already frustrated with the way Medicare has implemented the punishments. Medicare is not giving a break to hospitals that have lots of low-income patients, who are among the most likely to end up back in the hospital. It’s also not distinguishing between planned rehospitalizations and avoidable ones.

Here’s the full list of updated penalties. [Copyright 2012 Kaiser Health News]

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