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Medicare Pay Cuts for Poor Readmission Scores Begin

Cheryl Clark, for HealthLeaders Media, October 1, 2012

The dry run indicates that about 1,377 hospitals are lower performing and will receive less than their 1% pool funds back and in the worst case, only 23 cents back for every $100 of Medicare base DRG payment withheld.

While Medicare has posted the results of its dry run, they are not the final word on winners and losers and their respective penalties or incentive payments, according to CMS spokeswoman Kathy Ceja.  Hospitals won't find out exactly what their adjustments will be until late October, although the adjustments will impact all discharges beginning Oct. 1.

And, they won't actually realize those adjustments until payments come in January, which means that hospitals receiving more than the 1% will see a three-month windfall at the start of 2013 while underperforming hospitals should start budgeting for three-months of penalties.

The public will be able to see each hospital's adjustment factor, although not the dollar amounts, on Hospital Compare sometime this spring, Ceja says.

According to the dry run data, many of the hospitals that received penalty adjustment factors for their VBP scores also received the full 1% penalty for readmissions.

Alven Weil, spokesman for Premier, a hospital purchasing and quality network, says that was expected. "We hope that there is some relationship between the process measures chosen for the program and ultimate outcomes, such as readmissions, but more study is needed," he said.

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