Healthcare News & Insights

Hospitals face 3% Medicare penalty for high readmission rates

Starting later this year, hospitals will be penalized in the form of reduced Medicare reimbursements if their readmission rates are too high. Here are some ways hospitals can reduce readmissions. 

On October 1 of this year, Medicare’s Hospital Readmission Reduction Program goes into effect. Hospitals with high readmission rates will eventually have their regular Medicare reimbursements reduced by up to 3%. During the first year, however, the reductions will max out at 1%.

Who will be subject to the penalties? The Centers for Medicare and Medicaid Services will determine a hospital’s expected readmission rate based on the make-up of its patient population. Facilities that go over that rate will be penalized based on the ratio of actual to expected readmissions.

With healthcare facilities already struggling to maximize their reimbursements, most hospitals can’t afford a new Medicare penalty. Therefore, it’s critical that hospitals track their readmission rates and make improvements as necessary.

One thing that can help lower readmissions: health IT. A recent study of 22 Philadelphia-area hospitals found that those facilities achieved a 7% reduction in 30-day readmissions after implementing new technology initiatives. The hospitals achieved those results by using EHRs and other health IT tools to implement new strategies, such as:

  1. Screening patients to identity those who are at a high risk of readmission
  2. Generating a discharge plan to give to exiting patients, including information such as steps the patient must take, schedules for follow-up appointments and testing, and contact numbers patients can use when they have questions, and
  3. Sending discharge summaries and other information to patients’ primary care physicians.

Hospitals can lower readmission rates by taking other steps, such as:

  1. Having nurses call patients after they’re discharged to ask how they’re feeling and identify problems before serious issues develop
  2. Identifying patients who may have trouble after discharge, for example, because they don’t have insurance or a primary care physician, and setting them up with a post-discharge clinic, and
  3. Offering patients a transition coach to help guide them after discharge and make sure they take medications and take other steps to stay healthy.

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