WakeMed Health & Hospitals, a major area employer that faces its first financial loss in years, will be dinged about $650,000 by Medicare because too many patients treated at WakeMed were back in the hospital within 30 days after being discharged.
WakeMed is among a number of Triangle hospitals that will have to pay a Medicare penalty for excessive readmissions, but only two of those hospitals saw their excessive readmissions increase from a year earlier: WakeMed in Raleigh and Johnston Memorial Hospital.
The readmission penalty will cost 2,225 hospitals nationwide about $277 million in the coming year in reduced Medicare payments, according to an analysis of federal data by Kaiser Health News. Out of North Carolinas 88 hospitals, none will have to pay this years maximum penalty a 2 percent cut in Medicare payments and 27 will pay no penalty at all, Kaiser Health News found.
The Medicare penalty, part of the Patient Protection and Affordable Care Act, is designed to slow runaway medical costs by creating a financial incentive for hospitals to keep patients from coming back. In past years, hospitals had little incentive to keep patients away because they profited from charging the Medicare system for treating the patient a second time.
The key to this is coordination of care to try to get patients the best care once they leave the hospital so they dont have to come back, said J. West Paul, WakeMeds vice president for quality and safety.
Hospital stays are among the most expensive items in the health care system, and some of the reasons patients end up in the hospital can be treated less expensively through early intervention and monitoring.
Most penalties decline
The Medicare penalty system focuses on readmissions of patients who were initially admitted for three conditions: pneumonia, heart attack and heart failure. However, the readmission can be for any reason say, a bicycle accident or a snakebite and it counts against the first hospital even if the patient ends up at another hospital within 30 days.
About half of WakeMeds excessive readmissions were the result of readmissions to hospitals outside Wake County, Paul said. One of the excessive readmissions was for a patient who came in for a previously scheduled bypass operation, he said.
The first round of Medicare penalties kicked in last fall, and the second round begins this October. By 2015, the maximum penalty will go up 3 percent, which could translate to more than $1 million in lost revenue for some hospitals.
The approach seems to be working. Most Triangle hospitals will pay a smaller penalty in the coming year than they had to pay in the previous year.
The average penalty for North Carolinas hospitals will be a 1/3 percent cut in Medicare payments this coming year, Kaiser Health News found.
Rex Hospital in Raleigh expects its Medicare payments to be cut to $66,400, which is about half the penalty Rex paid last year. All three hospitals in Duke University Health System had excessive readmissions last year, but this year only Duke University Hospital will pay a penalty, and it will be nearly half the $600,000 the system paid last year.
Income a factor
Readmissions are reduced when hospitals follow up with patients at home and give care instructions to family members. Duke University Health System created a Same Day Acute Heart Failure Clinic, which provides medical infusions and other treatments outside the hospital so that a return visit is not counted as a readmission.
This years penalty is based on readmission numbers over a three-year period ending June 30, 2012, and doesnt reflect hospital improvements in the past 12 months.
During the review period, WakeMed treated about 1,700 heart attack patients and about 300 were readmitted to WakeMed or other hospitals, Paul said. That was 19 readmissions too many by Medicare standards.
The Kaiser Health News analysis found that hospitals that treat a high number of low-income patients are more likely to experience readmissions and get penalized.
Hospital industry officials have repeatedly said this aspect of the Obamacare penalty system is troubling.
Its worrisome because it doesnt reflect hospital quality, and the penalty may impact their ability to deliver care in the community, said Thomas Owens, Duke University Health Systems chief medical officer.