Obamacare fining hospitals for readmitting patients

Because of Obamacare, the federal government is endangering the health and lives of Medicare patients by fining hospitals for readmitting too many patients. This year 2,211 hospitals will lose about $280 million for having readmitted too many patients within 30 days of their discharge.[1], [2]

Like other parts of Obamacare, its readmission fine program is being phased in over several years. This year hospitals that run afoul of the new requirement will face fines of up to 1 percent of their Medicare reimbursement payments, but by October 2015 this maximum fine will triple.[3]

You don’t need a health policy or economics degree to figure out what could happen when hospitals are fined for readmitting patients. Anyone with common sense can tell you that this policy will mean that hospitals will be less likely to readmit you.

Of course, there will be unintended consequences. Not even HHS denies that there will be unintended consequences.

Many of the official comments HHS received on the new readmissions fine program warned HHS that unintended consequences may occur.[4] HHS responded that it “will monitor trends” and “take appropriate action” should “systematic shifting, diversion, [or] delays in care” occur.[5]

Unintended—perhaps. Unexpected—no.

Several hospital associations warned the Obama Administration last year that one unintended consequence would be that the fines would disproportionately affect minorities, the poor, and the hospitals that serve them.[6] The President of the Kansas Hospital Association, for instance, warned the Obama Administration that,

[R]esearch from both the government and private sector shows that African-American patients in general have a higher risk of readmission, and that hospitals serving disproportionately large numbers of minorities have higher readmission rates across the board. Given these facts, a hospital may end up being penalized under this program simply for serving large numbers of minority patients, rather than for actually providing poor quality care. Stated differently, the readmissions reduction program may disproportionately affect hospitals serving a large number of minorities. By penalizing these hospitals, the program will in turn disproportionately harm minority patients. This is an unacceptable result on both legal and policy grounds.[7]

We now know that he was correct. Analysis by Kaiser Health News shows that 76 percent of hospitals that treat high numbers of low-income patients were fined compared to 55 percent of hospitals that serve few low-income patients.[8]

Nor is it always for lack of effort that these hospitals have not been able to reduce their readmission rates. Barnes-Jewish Hospital in St. Louis, a hospital that serves a high number of poor patients, for instance, has been working for four years to decrease the number of patients who need to be readmitted.[9] They’ve even gone as far as sending nurses to patients’ homes to check on them and scheduling follow-up appointments with doctors.[10] Nevertheless the fines will cost Barnes-Jewish $1 million dollars.[11]

“Some of these hospitals that are going to pay penalties are not going to be able to afford these types of interventions,” said Barnes-Jewish Hospital’s chief medical officer, Dr. John Lynch.[12]

What’s worse is that there is no evidence that fining hospitals will actually improve the quality of health care being provided.

A recent study by the New England Journal of Medicine, shows that a similar program meant to penalize hospitals for certain hospital infections has had no impact on reducing such infections.[13]
 

---

[1] Jordan Rau, Kaiser Health News “Medicare to Penalize 2,211 Hospitals for Excess Readmission,” (Aug. 13, 2012) http://www.kaiserhealthnews.org/Stories/2012/August/13/medicare-hospitals-readmissions-penalties.aspx.
[2] Right now HHS is only monitoring readmissions for 3 of 7 conditions. The law requires the Secretary to eventually monitor readmissions for all 7 conditions. See 42 U.S.C. § 1395ww(q)(5)(B).
[3] See 42 U.S.C. § 1395ww(q)(3)(C).
[4] See 76 Fed. Reg. 51476, 51,662-51663.
[5] See 76 Fed. Reg. 51476, 51,662-51663.
[6] See Letter from Rick Pollack, Executive Vice President, Am. Hosp. Ass'n to Donald Berwick, Administrator, Centers for Medicare and Medicaid Services, "RE: CMS-1518-P, Medicare Program; Proposed Changes to the Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2012 Rates; Proposed Rule (Vol. 76, No. 87), May 5, 2011" (June 8, 2011) 15 available at http://www.regulations.gov/#!documentDetail;D=CMS-2011-0053-0029; Letter from Maryjane A. Wurth, President, Ill. Hosp. Ass'n to Donald Berwick, Administrator, Centers for Medicare and Medicaid Services, "Re: CMS-1518-P, Medicare Program; Proposed Changes to the Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hosp. Prospective Payment System and Proposed Fiscal Year 2012 Rates; Proposed Rule (Vol. 76, No. 87), May 5, 2011" (June 16, 2011) 5-6 available at http://www.regulations.gov/#!documentDetail;D=CMS-2011-0053-0063; Letter from Barry Arbuckle, President and CEO, MemorialCare Health System to Donald Berwick, Administrator, Centers for Medicare and Medicaid Services, "SUBJECT: CMS-1518-P, Medicare Program; Proposed Changes to the Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2012 Rates; Proposed Rule (Vol. 76, No. 87), May 5, 2011" (June 20, 2011) 15-16 available at: http://www.regulations.gov/#!documentDetail;D=CMS-2011-0053-0203; Letter from Tom Bell, President and CEO, Kan. Hosp. Ass'n to Donald Berwick, Administrator, Centers for Medicare and Medicaid Services, "RE: CMS-1518-P, Medicare Program; Proposed Changes to the Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2012 Rates; Proposed Rule (Vol. 76, No. 87), May 5, 2011" (June 20, 2011) 4-5 (emphasis added) available at http://www.regulations.gov/#!documentDetail;D=CMS-2011-0053-0177; Letter from Alyssa Keefe, Vice President Fed. Regulatory Affairs, Cal. Hosp. Ass'n to Donald Berwick, Administrator, Centers for Medicare and Medicaid Services, "SUBJECT: CMS-1518-P, Medicare Program; Proposed Changes to the Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2012 Rates; Proposed Rule (Vol. 76, No. 87), May 5, 2011" (June 20, 2011) 13-14 available at http://www.regulations.gov/#!documentDetail;D=CMS-2011-0053-0133; Letter from Eric Lucas, Senior Director, Gov't Programs, Catholic Healthcare West and Clara Evans, Director, Public Policy & Fiscal Advocacy, Catholic Healthcare West to Donald Berwick, Administrator, Centers for Medicare and Medicaid Services, "Re: CMS-1518-P; Medicare Program; Proposed Changes to the Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2012 Rates; Proposed Rule; Federal Register Vol. 76, No. 87; May 5, 2011." (June 20, 2011) available at http://www.regulations.gov/#!documentDetail;D=CMS-2011-0053-0265; and Letter from Bruce Siegel, CEO, Nat'l Ass'n of Pub. Hosps. and Health Systems to Donald Berwick, Administrator, Centers for Medicare and Medicaid Services, "Ref: CMS-1518-P. Medicare Program; Proposed Changes to the Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2012 Rates" (June 17, 2011) 3-4 available at http://www.regulations.gov/#!documentDetail;D=CMS-2011-0053-0111.
[7] Letter from Tom Bell, President and CEO, Kansas Hospital Association to Donald Berwick, Administrator, Centers for Medicare and Medicaid Services, "RE: CMS-1518-P, Medicare Program; Proposed Changes to the Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2012 Rates; Proposed Rule (Vol. 76, No. 87), May 5, 2011" (June 20, 2011) 4-5 (emphasis added) available at http://www.regulations.gov/#!documentDetail;D=CMS-2011-0053-0177.
[8] Jordan Rau, Kaiser Health News “Medicare to Penalize 2,211 Hospitals for Excess Readmission,” (Aug. 13, 2012) http://www.kaiserhealthnews.org/Stories/2012/August/13/medicare-hospitals-readmissions-penalties.aspx.
[9] Id.
[10] Id.
[11] Id.
[12] Id.
[13] Anna Wilde Mathews, The Wall Street Journal “Medicare Shift Fails to Cut Hospital Infections,” (Oct. 10, 2012) http://online.wsj.com/article/SB10000872396390444657804578048921747949546.html.