10 Things We Don't Know About Looming Readmission Penalties

2. Will CMS adjust for hospital size or socioeconomic status?
The risk adjustment formula to-date adjusts for some disease co-morbidities such as age, but does not correct for hospitals with patients who are more likely to be low-income, poorly educated, or have little access to primary care physicians, pharmacies and healthy food. It does not take into account race.

Some hospital leaders have argued vociferously that the formula is therefore biased against hospitals grappling with tougher populations.

In its FY 2012 rule last August, CMS explained it would not adjust for such factors as English language proficiency or socioeconomic status, saying that poorer scores could be due to "differences in the quality of healthcare received by groups of patients with varying race/language and socioeconomic status."

If there were such a correction, poor quality care for patients in "certain racial and ethnic groups may be obscured," the agency said, and "may suggest that hospitals with a high proportion of minority patients are held to a different standard of quality than hospitals treating fewer minority patients."

Nancy Foster, Vice President for Quality and Patient Safety Policy for the American Hospital Association, says many hospitals strongly disagree.

"What we're assessing here is supposed to be the performance of the hospital in doing what it can to prevent readmission. And when you confound that by not adjusting for community factors, then what you end up doing is penalizing hospitals for things that are clearly outside their control.

"I would agree that if we were assessing the impact of low socioeconomic status or communities without adequate primary care physicians, we want to hold that up and make sure that our measures doesn't adjust for that, but that's not what we're assessing here. We are supposed to simply be assessing hospital performance."

CMS promises to keep an open mind, and "will monitor" whether the program "has a disparate impact on hospitals that care for large numbers of disadvantaged patients. If such an impact is found, we will consider whether additional program modifications would be appropriate."