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Most California hospitals take a hit on Medicare reimbursement due to readmissions

The penalties for some facilities will be as much as 3 percent, the maximum allowed under federal law.

Jeff Lagasse, Associate Editor

WHAT HAPPENED

A large percentage of California hospitals are being hit by Medicare reimbursement penalties due to underperformance on 30-day readmissions. The Ventura County Star reports that of 292 hospitals evaluated throughout the state, 215 will be hit by penalties.

IMPACT

The penalties for some will involve up to 3 percent of Medicare fee-for-service reimbursements. How high the percentage actually gets depends on the amount of Medicare claims a hospital makes. 

Either way, even a small reimbursement hit can translate to significant financial losses. A 0.2 percent penalty, such as the one incurred by Ventura County Medical Center and the affiliated Santa Paula Hospital, can translate into tens of thousands of dollars in lost revenue.

This challenging reimbursement picture has emerged despite changes in the way the Centers for Medicare and Medicaid Services determines penalties. Rather than all U.S. hospitals being placed in the same pool -- with hospital-to-hospital comparisons forming the basis of the reimbursement scenario -- hospitals are now placed in peer groups based on their percentages of low-income patients.

The idea is that hospitals with more economically disadvantaged patients will naturally have higher 30-day readmission rates, but while hospital officials told the Star that the scenario has improved somewhat, it's still a challenging situation, particularly with so many facilities taking hits.

THE TREND

The 30-day readmission metric is one of the most common bits of data CMS uses to determine reimbursement, and it can be a challenge for hospitals.

Just last week it was announced that readmission rates dipped in New York, yet the state still has the highest rate in the country, with about 16 percent of patients being readmitted within the 30-day window. 

Some have proposed patient education as a possible strategy, the idea being that patients who better understand how to manage their symptoms will be admitted to the hospital less frequently.

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com

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