Central Peninsula Hospital Could Face Medicare Penalty
Hospitals across the country are looking at the possibility of lower Medicare reimbursements if they haven’t met federal benchmarks to lower readmission rates. Four hospitals in Alaska have been assessed the penalty, including Central Peninsula Hospital in Soldotna.
To be clear, the federal government isn’t demanding that hospitals pay them back for patients who were readmitted too soon after being discharged. As with most health care issues, it’s a little more nuanced than that.
Tucked away in part of the 2010 Affordable Care Act is provision added to the Social Security Act and inside that is the Centers for Medicare and Medicaid Service’s Readmissions Reduction Program. Designed specifically to lower readmission rates, that’s what could cost hospitals what amounts to a tiny fraction of their overall revenue in the form of lowered reimbursement rates.
Hospitals are assessed the penalties based on the number of patients readmitted for certain conditions relative to the number of patients the government expects to be readmitted within 30 days of being discharged. According to Kaiser Health News, readmissions nationwide run at a rate of nearly 20% costing the government an extra $17.5 billion each year.
At Central Peninsula Hospital, those numbers are a little lower.
“During that time we had 67 CHF (congestive heart failure) discharges and 17 of those patients got readmitted within 30 days,”said Rick Davis, CEO at Central Peninsula Hospital. “That’s 1.6 more patients than they would have expected us to have based on the national average,” he said.
The assessments only apply to a few conditions, pneumonia, acute myocardial infarction and CHF. That was the only condition that saw readmission over the three years.
“Of those 17, 12 were admitted for something other than heart failure. It was GI bleeds or a hip fracture, urinary tract infection, things like that,” Davis said.
“Patients are going to get readmitted for other things so there’s not a lot you can do about those, but of those who were admitted for CHF-related problems, we are working on how to make sure that doesn’t happen,” he said.
The readmissions didn’t occur at a steady pace over the three year period. Of the 17, 12 occurred in the first 18 months.
The readmission penalty is actually pretty small, just 0.8% of the total Medicare reimbursement at CPH.
“It looks like we could have a fine of about $6,500 which is about 5/1,000ths of a percent of our annual net revenue. It’s a pretty small fine, but…the biggest point is we just want to make sure we’re doing the right thing and working getting these patients not readmitted in 30 days,” Davis said.
For fiscal year 2011, CPH generated $98,517,005 in net patient revenues.
The hospital hasn’t been fined yet. CMS was authorized to begin reducing payments to hospitals with too many readmissions on October first. Central Peninsula Hospital is one of four in the state identified in a Kaiser Health report as eligible for the penalty, joining the Alaska Native Medical Center in Anchorage, Mat-Su Regional Health Center in Palmer and the Yukon Kuskokwim Regional Medical Center in Bethel.