Readmission penalties to double

The number of hospitals facing financial penalties for hospital readmissions deemed unnecessary within 30 days will remain steady next year but the punishment will double.

The Center for Medicare & Medicaid Services' (CMS) hospital readmissions reduction program is expected to cut Medicare spending on hospitals by about $227 million during the federal fiscal year starting Oct. 1, according to a 2,225-page final rule published Aug. 2. In this second round of the program, 18 hospitals will lose 2 percent, the maximum possible and double the current top penalty. Another 154 hospitals will lose 1 percent or more of every payment for a patient stay. Medicare is increasing penalties for a total of 1,074 hospitals and 283 hospitals not fined in the current year that will be penalized in the new round.

A federal data analysis shows about 2,200 hospitals will see reductions of up to 2 percent of their Medicare payments starting Oct. 1 under a program in the Patient Protection and Affordable Care Act that directed CMS to cut reimbursements to hospitals with high rates of readmissions. The penalties have been up to 1 percent of Medicare payments for the past year, and are scheduled to top out at 3 percent beginning in October 2014.

For 2012 and 2013, the penalties were based on statistics of patients readmitted to any Medicare hospital within 30 days following a stay for pneumonia, heart failure or heart attack. In October 2014, three more conditions will fall under the readmissions program: chronic obstructive pulmonary disease and arthroplasties of the total hip and total knee.