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MA Hospitals Cry Foul Over State Readmission Fines

Cheryl Clark, for HealthLeaders Media, September 26, 2011

Massachusetts hospitals are vehemently objecting to a state policy poised to impose fines of 2.2% of Medicaid payments on 24 facilities said to have higher than average rates of readmissions.

According to the Massachusetts Hospital Association, the penalty provisions, set to become effective Oct. 1, are "an unsound and arbitrarily designed policy" that "appears to be based on the simplistic and flawed premise that preventable readmissions are caused principally by hospitals," rather than patients, their families or by other providers, said Timothy Gens, MHA vice president and general counsel.

He made his remarks in a nine-page letter Sept. 14 to state Medicaid Director Julian Harris.

State officials believe the fines will save the state $5.2 million in the first year. Massachusetts is believed to be the second state to impose such penalties for higher Medicaid readmissions, subsequent to the adoption of a similar policy by the state of New York earlier this year.

Gens made clear in an interview Friday that MHA's members do not object to having a program that addresses readmissions, because "almost every hospital in the state is involved in some initiative or collaboration." 

Rather, they object to the state Medicaid agency's selection of the 3M Potentially Preventable Readmission system to determine those rates, a formula that he says was rejected by the National Quality Forum and the state's Health Care Quality & Cost Council's Expert Panel on Performance Measurement.

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