10 Things We Don't Know About Looming Readmission Penalties

Cheryl Clark, March 29, 2012

The second, and some say the most anxiously anticipated, document setting forth how hospitals with excessive 30-day readmission rates will be fined will soon be released.

A lot of money is at stake for some hospitals.

Beginning October 1st, the Affordable Care Act calls for penalties up to 1% of a hospital's entire base Medicare DRG payments in the first year, up to 2% the following year, and up to 3% every year after that.

The Centers for Medicare & Medicaid Services released the first installment of this new program's details in August 2011 with the final rules by which it would pay hospitals in FY2012. In that inpatient prospective payment system document, CMS promised further clarification with the FY2013 IPPS rule expected next month.

But precisely how these new rules will be implemented for three conditions that represent 16% of overall readmissions—heart failure, pneumonia, and acute myocardial infarction—remains unclear. Hospital officials are scratching their heads over how CMS will define, weigh, adjust, exclude, and compare hospitals, and how much money will be taken away.


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