After years of gently prodding hospitals to make sure discharged patients do not need to return, the federal government is using its financial muscle to discourage readmissions.
Medicare last month began levying financial penalties against 2,217 hospitals it says have had too many readmissions. Of those hospitals, 307 will receive the maximum punishment, a 1 percent reduction in Medicare’s regular payments for every patient over the next year, federal records show.
One of those is Barnes-Jewish Hospital in St. Louis, which will lose $2 million this year. Dr. John Lynch, the chief medical officer, said Barnes-Jewish could absorb that loss this year, but “over time, if the penalties accumulate, it will probably take resources away from other key patient programs.”
The crackdown on readmissions is at the vanguard of the Affordable Care Act’s effort to eliminate unnecessary care and curb Medicare’s growing spending, which reached $556 billion this year. Hospital inpatient costs make up a quarter of that spending and are projected to grow by more than 4 percent annually in coming years, according to the Congressional Budget Office.
The readmission penalties will recoup about $300 million this year. But the goal is to pressure hospitals to pay attention to what happens to their patients after they walk out the door. The penalties have captured the attention of hospitals, and many are trying to improve their supervision of discharged patients’ recoveries.
With nearly 1 in 5 Medicare patients returning to the hospital within a month — about 2 million people a year — readmissions cost the government more than $17 billion annually.
Some researchers fear the Medicare penalties are so steep, they will distract hospitals from other pressing issues, like reducing infections and surgical mistakes and ensuring patients’ needs are met promptly.
“It should not be our top priority,” said Dr. Ashish Jha, a professor at the Harvard School of Public Health who has studied readmissions.
With pressure to avert readmissions rising, some hospitals have been suspected of sending patients home within 24 hours, so they can bill for the services but not have the stay counted as an admission. But most hospitals are scrambling to reduce the number of repeat patients, with mixed success.