Health & Medicine

California hospitals get hit with Medicare readmission penalties

Nearly two-thirds of California’s hospitals will receive less money than usual from Medicare this fall as a penalty for failing to reduce patient readmissions, according to the federal agency that oversees Medicare and Medicaid.

The penalties of up to a 3 percent reduction in billing reimbursements for Medicare patients were issued to hospitals because too many patients there who suffered heart attack, heart failure, pneumonia, chronic lung problems or elective hip or knee replacements returned within 30 days after initial discharge.

Elaine Wong Eakin, executive director of patient education nonprofit California Health Advocates, hopes the Centers for Medicare & Medicaid Services penalties will gradually alleviate what she said has been a long-standing problem for Medicare patients.

“For too long, there was no follow up as to medication or therapy,” she said. “People would go home without a lot of information on how to recover. Too often, they end up back in the hospital.”

In California, 224 hospitals will be penalized, including multiple facilities operated by Dignity Health, Sutter Health, Kaiser Permanente and the University of California. That’s 65 percent of hospitals that participated in the program statewide – higher than the 54 percent of hospitals that were penalized nationally, according to a Kaiser Health News analysis of the agency’s data.

Most of the roughly 2,600 hospitals being fined nationally this year were also fined last year, though on the whole, fewer hospitals are being fined and at lower rates, according to the analysis.

Readmission standards were set by the agency in 2012, and are determined by a combination of patient demographics and overall hospital industry performance. Any hospital whose number of readmissions exceeded the standard received a fine, to be implemented this October.

Certain hospitals may have a harder time than others reducing readmission rates, such as hospitals with specialty care units, or hospitals that serve large populations of low-income or elderly patients. Patients from disadvantaged socio-economic backgrounds face greater difficulty adhering to medication, finding transportation to appointments or remembering to follow care plans, said Jan Emerson-Shea, vice president of external affairs for the California Hospital Association.

In response to the Medicare fines, many hospitals in California have sought to connect recently discharged patients, especially those at risk for follow-up complications, to skilled nursing facilities, home care workers and other lines of assistance close to the patient.

“The readmissions policy has just upped the game if you will, where hospitals are doing much more than just a discharge plan,” Emerson-Shea said. “They’re looking beyond the hospital walls and into the community for a support system, to make sure the patient can get to that follow-up appointment.”

Minimizing unnecessary readmissions is best for both insurers and providers, said Dr. Doug Kirk, chief medical officer for UC Davis Medical Center, as bringing patients back after discharge can be both costly to the health system and dangerous to the patient. The University of California health systems have in the last year launched a consortium specifically to address the issue.

Still, even a small reduction in Medicare reimbursement, such as the quarter of a percentage incurred by UC Davis Medical Center this year, takes a toll on a hospital’s finances.

“It takes money out of our pockets, so that’s less money to spend on patients,” Kirk said. “You want to do what you can do to avoid that. You’re kind of spending money to save money. ... You want to break even if you can, and that still benefits patients.”

Sammy Caiola: 916-321-1636, @SammyCaiola

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