Medicare penalties hit hospitals in Roanoke, New River Valleys
HOSPITAL READMISSION PENALTIES
The Affordable Care Act imposes reductions in Medicare reimbursements to hospitals with too many patient readmissions. Below is a list of area hospitals, with their fiscal year 2013 readmission penalty, FY 2014 penalty, and percentage of change.
Nine hospitals in a region that stretches from Bedford to Tazewell will see their Medicare reimbursements cut this year for having too many patient readmissions.
The penalties, part of the new federal health care law, are aimed at prodding hospitals nationwide to do a better job of making sure that patients admitted with heart problems and pneumonia don’t wind up back in the hospital too quickly.
Starting in October, hospitals in the region will have their Medicare payments docked from .03 percent to 1.6 percent.
The government program — described as a “blunt instrument” by one hospital industry advocate — has resulted in payment reductions for about two-thirds of the nation’s hospitals.
A total of $227 million will be withheld from 2,225 hospitals in the coming fiscal year, according to Kathryn Ceja, a spokeswoman for the U.S. Centers for Medicare & Medicaid Services.
In the Roanoke and New River valleys, all four LewisGale hospitals and five run by Carilion Clinic will have their payments reduced.
The hospital with the highest readmission rate, LewisGale Hospital Pulaski, will face the toughest penalty — 1.6 percent of its Medicare reimbursements for a year, beginning Oct. 1.
Affected to a lesser degree were the region’s two major hospitals, LewisGale Medical Center in Salem and Carilion Roanoke Memorial Hospital. Payments to LewisGale will be reduced by .81 percent; the penalty for Roanoke Memorial will be .05 percent.
The penalties are part of a program that took effect last year under the Patient Protection and Affordable Care Act.
In an effort to cut down on avoidable hospital readmissions, government regulators are monitoring how many Medicare patients suffering from three ailments — heart failure, heart attacks and pneumonia — were readmitted within 30 days of their release.
How a hospital compares to the national average, once risk factors are taken into consideration, determines whether it will face a reduction in payments from Medicare, the government insurance program that covers senior citizens.
In 2010, about one in five Medicare patients was readmitted to a hospital within 30 days of their initial stay, according to CMS. That cost the program $17.5 billion — a sum the government hopes to trim by making it financially advantageous for hospitals to find ways to prevent readmissions.
When the program began last year, the maximum penalty was 1 percent of Medicare payments. That increases to 2 percent this year, and will reach 3 percent in fiscal year 2015.
Carilion officials said the move to reduce readmissions is consistent with their ongoing efforts to improve patient care. Converting to a clinic model, which offers multi-specialty physician services as opposed to just running a chain of hospitals, was key part of that initiative, they said.
“I don’t look upon this as a cost,” Dr. Wayne Gandee, chief medical officer for Carilion, said of the penalty program.
“I look at it as an investment in the care of patients.”
Based on historical averages, Carilion lost an estimated $267,000 in Medicare payments during the first year of the program. Looking forward, that amount is expected to drop to $179,000 in the year starting Oct. 1, according to Don Halliwill, the health system’s chief financial officer.
Carilion officials said the reduction in penalties, which comes even as the potential punishment doubles, is a testament to their success in reducing readmissions.
For a health care system that had $1.3 billion in revenues during the most recently completed fiscal year, $446,000 in lost Medicare payments might not sound like a lot.
But Medicare is one of the biggest payers to hospitals, “so any cut to reimbursements can add up to a lot,” said Chris Bailey, senior vice president of the Virginia Hospital and Healthcare Association.
While the association supports the government’s efforts to reduce readmissions, it has some concerns about the process.
For example, a provider can be held responsible for a readmission if a heart attack patient goes back to a hospital within 30 days of their release, even if it’s for something totally unrelated to their first stay, such as injuries from an automobile accident.
“This is a fairly blunt instrument that could use significant refinement,” Bailey said.
Another criticism is that the program unfairly punishes hospitals that treat the largest number of low-income patients.
Those patients are more likely to come from communities where there’s less access to transportation, pharmacies and other services needed for a speedy recovery.
“Hospitals want to be held accountable,” said Akin Demehin, senior associate director of policy for the American Hospital Association. “But on the other hand we think it’s unfair that hospitals are being held accountable for community-based factors that, at the end of the day, are very difficult for us to control.”
At LewisGale, a spokeswoman said that while the Centers for Medicare & Medicaid Services has ranked the four hospitals among the best in the nation for the three conditions measured by the program — heart attacks, heart failure and pneumonia — there’s always room for improvement.
“We certainly view this as an opportunity to improve on our readmission rates,” spokeswoman Joy Sutton said. “This data is several years old and since that time we’ve implemented several new initiatives. As a result, we’ve already noticed an improvement in our readmission rates based on our own tracking process for our hospitals.”
LewisGale declined to say how much money it has lost in Medicare payments under the program.
“These new initiatives have focused on helping our patients become more compliant with discharge instructions and medication compliance as well as working with key community partners, such as nursing homes, to share discharge information on our patients to ensure appropriate follow up care,” Sutton said in a prepared statement.
Two hospitals in the region owned by Carilion, in Giles County and Lexington, are reimbursed by Medicare under a different system and did not fall under the penalty program.
At Roanoke Memorial, the most recent readmission rate for heart attack patients was 18.1 percent, slightly below the national average. The readmission rate for heart failure was also below the average.
“We started out pretty good,” Carilion spokesman Eric Earnhart said. “And we’re getting better.”