A New Fiscal Year Begins New Readmission Penalties

October 1, 2014 marked the start of the fiscal year 2015 in the U.S. government.
It also marked the start of increasing penalties for hospital readmissions, with the maximum penalty for 30-day readmissions increasing to 3%.  The 3% will be deducted from Medicare inpatient payments.

The Hospital Readmissions Reductions Program is one of the three penalty programs created by the Affordable Care Act.  When the program launched in FY 2013 the penalties cut up to 1% of Medicare inpatient payments for hospitals with excess readmissions.
In FY 2014 the maximum penalty increased to 2% and now for FY 2015, the penalties have increased to a maximum of 3%.

In FY 2014, the the three conditions monitored for readmission penalties include acute myocardial infarctions (heart attack), heart failure, and pneumonia.

The 30-day unplanned readmission for hip/knee replacements patients are also estimated by CMS.  This category will now be considered for the Hospital Readmissions Reductions Program beginning FY 2015.
In 2016, readmissions for patients with  chronic obstructive pulmatory disease will also  be added, with CMS likely to add other measures in the future, according to the American Hospital Association fact sheet.

CMS chose to measure unplanned readmission within 30 days instead of over longer period of times (such as 90 days), because readmissions over longer periods may be impacted by factors outside hospitals' control.

The inclusion of these conditions as well as the percentage increase may seem daunting for most hospitals.  As a prediction, the Advisory Board Committee estimates that “roughly 12% of hospitals set to receive a readmissions penalty wouldn’t have gotten a penalty if not for these conditions…some hospitals just straight from no penalty in FY 2014 to a full 3% penalty in FY 2015.”

In the past two years, CMS has reported data indicating a reduction in all-conditions readmission, with statistics suggesting the Hospital Readmissions Reduction Program is a major contributor.

Definitive Healthcare, the leading provider of intelligence on hospitals and healthcare providers, tracks data on a variety of quality metrics such as readmissions and complications.

When searching through Definitive Healthcare’s hospital database of over 7,400 hospitals and viewing hospitals’ 30-day readmission rates, 8 hospitals scored in the “Less than 10th Percentile” for all three readmission categories heart attack, heart failure, and pneumonia.
On the contrary, 24 hospitals scored in the best category of “90th Percentile and Greater” of readmission rates for all three conditions.

Additionally, Definitive Healthcare has detailed profiles on the 255 hospitals with an estimated loss of over $250,000 due to readmission penalties, FY 2014.

All Definitive Healthcare’s quality data is aggregated via the Data Collections Period for the most recent Quality Metrics Update.  The most recent data is currently from July 2014.

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