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Penalties to Start

Karen Minich-Pourshadi, for HealthLeaders Media, April 13, 2012
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This article appears in the April 2012 issue of HealthLeaders magazine.

Although experts disagree on how many readmissions are actually preventable, the Medicare Payment Advisory Commission reported in a 2007 study that about 40% of rehospitalizations annually are avoidable and cost the industry billions.

The MedPAC data helped drive the Patient Protection and Affordable Care Act's goal of reducing readmissions by tying them to reimbursements. For FY 2013, Medicare payment rates are scheduled to be reduced by a maximum 1% based on a hospital's ratio of actual to expected readmissions. For FY 2014 the maximum payment reduction is 2%; then the reduction caps at 3% for FY 2015 and beyond. Commercial payers are expected to follow suit and adopt similar payment reductions for providers in the coming years.

When the preventable admissions policy takes effect, the CMS will be watching three measures: acute myocardial infarction, heart failure, and pneumonia. Then in 2015, the policy expands to include chronic obstructive pulmonary disease, coronary artery bypass graft, percutaneous transluminal coronary angioplasty, and other vascular areas. Hospitals and health systems will be required to submit this information to CMS, which will calculate hospital-specific all-payer readmission rates that will be posted publicly on Hospital Compare.   


This article appears in the April 2012 issue of HealthLeaders magazine.


Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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