The Medicare and Medicaid Services organization are a situation where they need to make significant changes to their structuring to stay vital. Finances are tight and the healthcare industry is evolving by the day. This requires precise and focused calculations on how to organize Medicare and how to get hospitals to reduce certain weaknesses. Readmission to a hospital is considered two visits within 30 days. They generally need to be related to each other.
This is a rather common occurrence with the elderly, where pneumonia and heart failure are not entirely uncommon. These hospital readmission rates are damaging to the bottom line. What makes them more frustrating is that they can generally be avoided. This is where the CMS has initiated a performance improvement in healthcare. Their efforts are striving to reduce the amount of patience that returned within a month and reduce the total output of unnecessary and potentially extraneous Medicare payments. The total plan has a number of ideas in it, but one of them is penalties imposed on the hospital.
What are the penalties?
The organization applied a 1% reduction in Medicare payments in 2013 for their hospital readmissions reduction program. This is for hospitals that did not pass their overarching tests and were seeing too high of readmission rates. This was doubled to 2% in 2014, and will cap out with 3% in 2015. This will continue as long as necessary, and there are no plans to reduce or increase this rate for the readmission reduction program.
Stats on Penalties
Right now, roughly 2/3 of hospitals have the penalty imposed on them. The average penalty is about $125,000, which is imposed on an annual basis if the hospital does not reduce the rates.
Truthfully, these rates are pretty marginal. The Medicare payments as a whole tend to be absolutely massive, so a roughly hundred thousand dollars difference is not particularly felt. But the fact that CMS organization is taking this extra step is a move in the right direction. It suggests that people are paying attention to these alterations and how they are developing.
Will hospitals be hampered by these penalties? It is probably unlikely. The overall readmission program is a potentially interesting way to place extra emphasis where it is needed. It is fascinating to see how these changes will occur in the future, if hospitals receiving penalties will simply continue to do as they do because the number is not substantial enough.
Readmission Reduction Program 