Five-Year Results from the CMS Readmissions Program

Hard to believe its been five years.  Must seem like an eternity to hospitals.  Over five years ago the Medicare program to penalize “excessive” hospital readmissions was implemented.  Researchers analyze the results in a study carried by Health Affairs.   (HA Article)   One thing the program has done for sure is penalize a lot of hospitals.  Excessive readmissions are calculated on a 3 year rolling basis for certain common causes of hospitalization.  The geniuses at CMS are apparently capable of predicting what readmissions a hospital should have.  The current penalty is up to 3% of all reimbursement to the hospital.  That is a big penalty.  Contrary to what you might think if the program were successful, the number of hospitals penalized and the amount collected have risen over time.  In 2013, 2217 hospitals lost $280 million and for 2017 it is estimated that 2597 hospitals will lose $528 million.  In the researchers sample of 3229 hospitals, over half, 1692, got penalized every year.  Only 354 hospitals never were penalized.  The hospitals that got penalties every year tended to be larger, teaching hospitals, urban and for-profit.  They served more Medicare and disadvantaged patients.  It is pretty clear in this analysis, as in others, that CMS is not accounting for factors related to poorer patients, who likely get readmitted because they either don’t have access to health care resources in the community and/or don’t engage in good health and health care behaviors.

The program clearly isn’t working as intended, unless of course the intent was just to pay hospitals less and save CMS money, then it is working just fine.  There appears to be a reduction in readmissions in the early years but it quickly plateaued.  A likely explanation is that a relatively small subset of hospitals figured out to game the system or had the resources to intensively reduce readmissions, with who knows what unintended consequences to patient care.  As detailed in multiple pieces of research reported here, the program whacks hospitals serving the poor the most.  These hospitals need their revenue.  There is an easy fix, which CMS just won’t consider apparently.  If you think a readmission wasn’t justified, examine it specifically and don’t pay for it if it wasn’t.  CMS is driving providers crazy with audits for everything else, why not use a case-by-case approach to readmissions.  It would be the only truly accurate method.