400 Additional Hospitals Face Obamacare Readmission Penalties Totaling $428 Million in Fiscal 2015

The Hospital Readmissions Reduction Program was created by Obamacare to penalize hospitals with excess numbers of patients readmitted within 30 days of discharge following treatment for heart attack, heart failure or pneumonia. In fiscal 2013, the penalty was up to a 1% dock in Medicare payments. That figure increased to 2% in fiscal 2014 and now sits at 3% for fiscal 2015. In addition to the increased fine, the program has added measures: Readmission rates for chronic obstructive pulmonary disease and total hip and total knee replacements. Modern Healthcare reports that 2,610 U.S. hospitals will see their Medicare payments docked in fiscal 2015, while just 769 U.S. hospitals will avoid such fines. Over the course of fiscal 2015, Medicare estimates the fines will total $428 million. Perhaps the measures are

not achieving their stated goal of improving care if fewer than one quarter of eligible hospitals can avoid the fines. According to Dr. Peter Pronovost, director at Johns Hopkins Medicine: “[The program] isn’t really as strong a signal for quality of care,” referring to it as “a mechanism to reduce payment rather than improve quality.” The penalties provide strong incentives to keep patients from readmission, although readmission includes factors beyond a hospital’s control such as patient’s ability to afford medications or transportation for follow-up visits. Pronovost concludes, “Sometimes the safer thing, and the higher quality of care might be to be readmitted, but with significant penalties the incentive is to do the opposite.” As Obamacare’s Hospital Readmissions Reduction Program enters its third year, the question remains: Is its real goal to increase quality, or just cut hospital reimbursement?

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