skip to Main Content

What to Know about CMS Penalizing 2,499 Hospitals for High Readmission Rates

In 2012, Medicare began penalizing hospitals that had high readmission rates for Medicare patients as part of the Affordable Care Act (ACA). The Hospital Readmissions Reduction Program (HRRP) was created as part of the ACA to counter financial incentives hospitals received from readmitting patients within 30 days. 

HRRP supports the goal of the Centers for Medicare and Medicaid Services (CMS) to encourage hospitals to improve care coordination and communication, so patients and caregivers are better informed of discharge plans. The end goal is to reduce unnecessary readmissions and help patients transition smoothly when they leave a hospital.

This year marks the 10th year that penalties have been dispersed. A recent report from Kaiser Health News shows that 2,499 hospitals will be penalized by Medicare for having high readmission rates. This number represents 47 percent of all qualifying facilities in the country. 

Key Takeaways: 

Medicare evaluated 3,046 hospitals this year to determine which facilities would receive penalties. 

Here are a few key takeaways to note from the Kaiser Health News report that details the penalties imposed by CMS.

Not all facilities are considered

There were 2,216 hospitals around the country that did not qualify for Medicare cuts. Some facilities that did not qualify include those specializing in caring for veterans, children, or psychiatric patients. In addition, long-term care hospitals, critical access hospitals, and rehabilitation centers were also excluded.

The last six months were excluded

Penalties are typically calculated based on three years worth of patient data. In light of the global pandemic, though, the most recent analysis excluded the last six months of the period to account for the influx of COVID-19 patients that hospitals were managing. 

Not every hospital received the maximum penalty

Penalties vary and can depend on the severity of the situation and the payment each hospital receives per Medicare patient. For this fiscal year, 39 hospitals were charged the maximum penalty of a three percent reduction. On average, hospitals receive a fine of a .64 percent reduction in payment for each Medicare patient starting in October 2021 and running through the end of September 2022. 

Some hospitals escaped without a penalty

The numbers highlighted in the report may make it seem as though getting a penalty is unavoidable. This year, 82 percent of evaluated hospitals received some sort of penalty. However, 547 hospitals had low enough readmission rates that they did not receive any type of penalty. You can see how hospitals around the country fared by looking up how much they were penalized this year.

Penalties will save the government a lot of money

On average, CMS penalties cost hospitals $217,000 in 2018. The penalties distributed this year are expected to save the government $521 million over the next fiscal year.

Reduce Avoidable Readmissions with Our Community Resource Network Directory

Based on historical data, it seems that many hospitals are getting lower penalties this year than they had previously. For example, in 2020, 56 hospitals received the maximum penalty, compared with 39 receiving the maximum penalty this year. 

The best way for hospitals to avoid a CMS penalty is to lower their avoidable readmission rates. The Community Resource Network Directory (CRND) from HealthLink Dimensions can help your facility accomplish this by smoothing care transitions and ensuring patients and caregivers have access to the right resources after discharge.

Integrate our industry-leading provider and facility directory with your existing EHR, or use the cloud for easy, secure access that connects caregivers, patients, and providers to improve patient care and reduce unnecessary readmissions.

It’s easy to get started with CRND. Contact us today for a free demonstration and consultation.

Back To Top