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Medicare rule on readmissions will hurt some hospitals

Posted Aug 01 2011 12:21pm

Monday, August 1st, 2011

By Kester Freeman
Former CEO, Palmetto Health

While many of the causes for readmission are out of a hospital's control, the message is clear, hospitals will be obligated to get involved in the whole spectrum of care for a patient and will be held accountable if patients are readmitted to a hospital within a certain time period, according to a proposed rule expected from CMS.

Under Medicare's draft proposal, which it put out in May, penalties would start in October 2012; hospitals with the worst readmissions rates eventually could lose up to 3 percent of their regular Medicare payments .

As recently reported in Kaiser Health News:

The efforts, called for in last year's health care law, are part of a push to make hospitals the hub for coordinating care. Hospital care is the largest chunk of Medicare spending; Medicare says readmissions alone cost $26 billion in a decade. Plus, many experts argue hospitals are the most organized actors in a splintered and often dysfunctional health system, and thus best able to take the lead in overseeing patient care.

But hospital groups complain that Medicare's plans could punish them for things they can't control, such as unavoidable readmissions and patients who can't afford the costs of prescriptions.

"A lot of this is very unfair," says Blair Childs, a vice president at Premier, an alliance of more than 2,500  hospitals and 75,000-plus other healthcare sites. He says hospitals that don't have a lot of money to invest in improving their oversight of former patients could end up losing more money under Medicare's proposals, putting them in an even bigger financial hole. In particular, he says, the changes may hurt inner city hospitals.

"These are often very stressed hospitals, and they're the ones that are going to be penalized the most," Childs says.

A final rule regarding readmissions is expected soon. Some academics argue the 30-day readmission rule would be a relatively lousy quality measure. But despite the disagreement, hospitals will need to take the lead and come up with better ways to monitor and improve readmission rates. If we don't do this on our own, it is likely government officials will do it for us.

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