Three general hospitals in the Triangle will be docked 1 percent of Medicare payments in 2016 because they exceeded federal standards for infections and other safety factors.
The penalty, in its second year, is part of the Affordable Care Act’s punishment-and-reward system created to keep down unnecessary medical spending and control health care costs.
The three Triangle hospitals are among 15 in North Carolina and 758 nationwide that were penalized by Medicare to the collective tune of about $364 million, according to Kaiser Health News, an independent information service.
The penalty averages out to about a half-million dollars per hospital, but hospitals with a heavy volume of Medicare patients could end up losing well over $1 million in Medicare revenue.
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The Triangle general hospitals are WakeMed Health & Hospitals’ flagship campus in Raleigh and the system’s Cary hospital. Also penalized was UNC Hospitals in Chapel Hill. All three were penalized last year as well.
WakeMed officials said the penalty would cost them an estimated $1.4 million total across both hospitals.
UNC officials couldn’t be reached Friday to estimate the penalty amount.
The fines are based on the frequency of occurrence of infections and other complications between July 2012 and June 2014, according to Kaiser Health News’ analysis of the penalties. The penalties will lower Medicare reimbursements through the federal fiscal year, which ends Sept. 30, 2016.
Hospital officials have grumbled about the penalties because they can disproportionately affect hospitals that treat the most serious and complicated cases, which are more likely to have complications. The law is designed to punish a quarter of the nation’s hospitals every year, but the law exempts veterans hospitals, children’s hospitals and “critical access” hospitals, generally the only hospitals in their market.
The Kaiser Health News analysis showed that some of the Medicare safety penalties affected some of nation’s best-known hospital systems, including hospitals within the prestigious Mayo Clinic Health System in Minnesota.
Under the ACA, Medicare issues penalties in several performance areas to apply pressure to hospitals to improve quality. Medicare also penalizes hospitals for excessive readmissions, and pays bonuses for patient satisfaction and other performance measures.
Last year, 17 North Carolina hospitals were penalized for safety-related factors. UNC Rex Healthcare and Duke University Health System avoided the penalties both years. In all, 721 hospitals were penalized a total of $373 million.