Having to go back to the hospital soon after being released is, at best, annoying for you.
It’s painful for your hospital, too — a pain that can be felt in the bottom line.
Under a provision of the Affordable Care Act, hospitals that receive reimbursements from Medicare are subject to penalties if they have excess numbers of readmissions within 30 days or excess numbers of hospital-acquired infections. The exceptions are critical access hospitals — rural hospitals that meet certain criteria. Examples are Community Memorial Hospital in Cloquet and Lake View Hospital in Two Harbors.
For the rest, the penalties can be significant.
“It’s usually hundreds of thousands of dollars,” said Dr. Gary Peterson, chief medical officer for St. Luke’s hospital.
Peterson documented that. In calendar year 2017, when St. Luke’s had a 0.5345% readmission penalty, the cost was more than $340,000. In calendar year 2018, the penalty was 0.425% and the cost was a little more than $325,000.
The good news for St. Luke’s and most other Northland hospitals is that a downward trend is continuing into 2020. According to a “look-up tool” provided by Kaiser Health News, St. Luke’s will have a 0.07% penalty in 2020, sharply down from 0.35% in 2019. Fairview Range Medical Center in Hibbing will face a 0.12% penalty, down from 0.25%. And Essentia Health-St. Mary’s Medical Center, which paid a 0.07% penalty last year, will pay no penalty at all in 2020. The only other hospitals in Minnesota in that category are Carris Health-Rice Memorial Hospital in Willmar and the Mayo Clinic in Rochester.
The downward trend is not just good news for the hospitals, said Terry Hill, senior adviser for rural health leadership and policy with the Duluth-based National Rural Health Resource Center.
“It is good news for patients,” Hill said. “I go to Essentia, and it makes me feel better.”
A notable exception to the positive trend in the Northland is at Essentia Health-Virginia, where the penalty will go up from 0.75% in 2019 to 0.90% next year. That’s the second-highest in the state after Northfield Hospital, according to the Kaiser Family Foundation tool.
But Sam Stone, administrator of the Virginia hospital, said the actual number of patients affected by readmission is very small.
“Six patients over the last three years were readmitted for any reason,” Stone said. “So in the grand scheme of things, six patients over three years is not a massive number, but it is still six patients too many.”
Over the past three years, the penalty Essentia Health-Virginia paid was in the range of $60,000, Stone said. But bonus payments the hospital received from the Centers for Medicare and Medicaid Services for achievements in other areas outweighed the penalties.
“When you look at the grand scope of the CMS quality programs, Virginia’s on the positive side of that, and I think in many ways is the leader of the pack,” he said.
There’s a difference of opinion among people who pay attention to hospitals about whether the penalty program actually has made things better for patients.
Count Dan Collins, vice president for quality at Essentia Health, as a skeptic.
“There’s a lot of studies out there that will say that this whole readmission reduction program and penalties has really not improved the health of the patients … because it has put more burdens on healthcare systems,” Collins said.
He pointed to a study published last year in the European Journal of Heart Failure that labeled the readmissions reduction program a failure. The authors, Drs. Ankur Gupta of Harvard Medical School and Gregg C. Fonarow of Ronald Reagan-UCLA Medical Center, contended the gains were modest and came, at least in part, by hospitals “gaming the system.”
For example, patients brought into the emergency room might be kept under observation status for days without technically being readmitted, they wrote. Or hospitals might delay readmission until after 30 days, when it would no longer count against them.
Peterson said he didn’t think either hospital in Duluth would play such games, but added that he could imagine it happening elsewhere.
“There are ways that you … could maximize your return without necessarily improving patient care,” he said.
A request for comment from CMS was turned down except for references to two reports.
One of those was a report to Congress issued last year by the Medicare Payment Advisory Commission, an independent agency charged with making recommendations to Congress. That report hailed what it called a “large decline” in readmission rates, said it found no evidence that the policy “had a negative effect on mortality” and argued that it was accompanied by only a slight increase in observation stays.
The decline in readmissions is saving the Medicare program about $2 billion per year, the report added.
Hill sees the readmission penalties as positive for patient care.
“I think it really provided incentives for a lot of hospitals to take a look at this and make an investment that they might have thought they couldn’t afford to do in the past or they didn’t choose to do,” he said. “(If) Essentia and St. Luke’s are doing a good job with this, that means they have been very conscious about this and have done good work to stop those readmissions.”