The federal government’s readmission penalties on hospitals will reach a new high as Medicare withholds more than half a billion dollars in payments over the next year, records released Tuesday show.
The government will punish more than half of the nation’s hospitals — a total of 2,597 — having more patients than expected return within a month. While that is about the same number penalized last year, the average penalty will increase by a fifth, according to a Kaiser Health News analysis.
The new penalties, which take effect in October, are based on the rehospitalization rate for patients with six common conditions. Since the Hospital Readmissions Reduction Program began in October 2012, national readmission rates have dropped as many hospitals pay more attention to how patients fare after their release.
The penalties are the subject of a prolonged debate about whether the government should consider the special challenges faced by hospitals that treat large numbers of low-income people. Those patients can have more trouble recuperating, sometimes because they can’t afford their medications or lack social support to follow physician instructions, such as reducing the amount of salt that heart failure patients consume. The Centers for Medicare & Medicaid Services says those hospitals should not be held to a different standard.
Medicare said the penalties are expected to total $528 million, about $108 million more than last year, because of changes in how readmissions are measured.
Medicare examined these conditions: heart attacks, heart failure, pneumonia, chronic lung disease, hip and knee replacements and — for the first time this year — coronary artery bypass graft surgery.
The fines are based on Medicare patients who left the hospital from July 2012 through June 2015. For each hospital, the government calculated how many readmissions it expected, given national rates and the health of each hospital’s patients. Hospitals with more unplanned readmissions than expected will receive a reduction in each Medicare case reimbursement for the upcoming fiscal year that runs from Oct. 1 through September 2017.
The payment cuts apply to all Medicare patients, not just those with one of the six conditions Medicare measured. The maximum reduction for any hospital is 3 percent, and it does not affect special Medicare payments for hospitals that treat large numbers of low-income patients or train residents. Forty-nine hospitals received the maximum fine. The average penalty was 0.73 percent of each Medicare payment, up from 0.61 percent last year and higher than in any other year, according to the KHN analysis.
Under the Affordable Care Act, which created the penalties, a variety of hospitals are excluded, including those serving veterans, children and psychiatric patients. Maryland hospitals are exempted as well because Congress has given that state extra leeway in how it distributes Medicare money. Critical access hospitals, which Medicare also pays differently because they are the only hospitals in their areas, are also exempt.
As a result, more than 1,400 hospitals were automatically exempt from the penalties. Other hospitals did not have enough cases for Medicare to evaluate accurately and were not penalized. Of the hospitals that Medicare did evaluate, four out of five were penalized.
The KHN analysis found that 1,621 hospitals have been penalized in each of the five years of the program.
Kaiser Health News staff writer Sydney Lupkin contributed to this report.
KHN’s coverage of late life and geriatric care is supported by The John A. Hartford Foundation.
PowerHealth OnDemand upgraded its users to the new platform. The features of the upgrade are:
Enhanced Navigation and OnDemand Report Performance
Introduction of the New OnDemand Support Center
Standard and Custom report enhancements – Please contact OnDemand Client Support for more information about the new reporting options and information on adding these solutions to your subscription!
Internet Explorer v7,8,9 performance improvements – Though we have made some fixes for older versions of IE users, we recommend using an updated browser when using OnDemand to experience maximum performance.
At PowerHealth OnDemand, customer success is our #1 priority. Our goal is to deliver optimal value in each of our software releases for our customers and their teams. We are excited to introduce next release.
Our engineering and design teams have been up late creating a new and improved user experience.
• Easy User Navigation: All users from Administrators to Power Users/Analysts to infrequent users from departments will have access to OnDemand’s newly designed and intuitive and organized user interface.
• Mobile Access: This release will feature a new way to stay attached to critical OnDemand information answers using a desktop, laptop, iPad or other tablets. Now users from analysts to department management to executives will be able to more easily view summary level answers through our new OnDemand Watchlist Key Performance Indicators, new Dashboards, Charts, and Analysis Grids. Mobile devices that are “touch-compatible” will now have their OnDemand Answers at their fingertips.
Expanded OnDemand Analytic Reporting
Based upon our OnDemand Community recommendations, we’ve continued to enhance and expand our product line to meet user needs. High level enhancements include updates to the following:
• Financial Performance Analytics now includes areas such as:
1. GL Budget/Variance by organization and individual department, with integration to items such as Labor and Materials Management
2. GL Department Summary
3. GL PowerGrid for Ad hoc Reporting
4. Interactive Income Statement to view and manage all department details
• Clinical Operations Performance Analytics have been expanded and organized to enable users to better visualize and manage bottlenecks to patient throughput in areas from “Door to Discharge”. OnDemand now includes analytics reporting to manage critical areas such as Patient Census, Volumes, OR throughput, and Emergency Department , LABS, and Radiology throughput.
• Quality Performance Analytics have also been enhanced to enable users to view summary and detailed level answers related to better manage quality outcomes by procedure, readmissions by any variable, ICD performance, patient satisfaction, and more.
• OnDemand Support Center: We have revamped our Help & Support system to better accommodate our users from Administrators to Power to Casual users. More to come on this soon!
• Custom Reports to help drive decisions. Users who need additional help generating Answers will find a new OnDemand Reporting Service available to their organization. Users will have easy access to submitting a form our PowerHealth team when they require unique or complex reports that require our services.
• Lean Management System – All OnDemand subscribers now have access to our newly released Lean management solution called Kaizen OnDemand. This system is tailored to help your organization better manage Lean initiatives through an easy to access online system for ANY and ALL staff members. Contact us today to find out more!
OnDemand Go-Live specifics
• The scheduled time for the OnDemand upgrade will occur on Monday, July 22nd and order to minimize user downtime, the upgrade will occur on a weekend night before our scheduled go-live.
• There will be a brief upgrade window when we will perform this service. During the upgrade window, users will receive a message stating that the service is momentarily unavailable. Once the service is available, organizations will be on the OnDemand 5.0 release.
We are providing four 30-minute training sessions to educate OnDemand users on the new release features/enhancements. Please refer to your “5.0 release email” for a schedule of trainings.
HealthCare Finance News I April 01, 2013 I Kelsey Brimmer, Associate Editor
FREEPORT, ME – Participation in a national hospital project has shown one small Maine hospital the importance of business intelligence tools.
The 65-bed Franklin Memorial Hospital, a member of Franklin Community Health Network (FCHN), is taking part in Value Journey, a project organized by the Healthcare Financial Management Association (HFMA). The project sets out to identify common challenges that all healthcare providers are facing as they adapt to a value-based business model, such as the fragmentation of care delivery, as well as common capabilities, strategies and tactics that will help them make the change. Thirty-five hospital systems across the country are taking part.
Growth Strategies | September 27, 2012 | CFO.com | David Rosenbaum
Why is a finance director involved in what seems to be operational minutia? Because operations drives finance.
But all hospitals share the same problem: an aging population.
“With an older population,” says Josh Gray, managing director of the financial leadership council of The Advisory Board Company, a health care and educational consultancy, “you get a higher proportion of medical as opposed to surgical care. Older people have fewer surgeries, and medical care is reimbursed more poorly than surgery. This places incredible pressure on hospital margins while costs are increasing.” (And they are. According to a recent New York Timesinvestigation, Medicare reimbursements to hospitals were $1 billion more in 2010 than five years earlier.)
Hospital margins are already grocery-store thin. At 2%, Massachusetts’ Jordan Community Hospital’s is relatively robust, with a total 2011 surplus of a little over $4 million on net patient service revenues of $194 million. But Jordan Hospital is part of the Jordan Health System, which also includes 50-doctor Jordan Physician Associates, Cranberry Hospice, and a wellness center. As a whole, the Jordan Health System’s margin was under .5%, and its surplus was $900,000.
September 10, 2012 Fierce Healthcare | By Karen Cheung-Larivee
Two-thirds of hospitals will see penalties in the coming weeks for higher-than-average readmissions, according to the Medicare Payment Advisory Commission (MedPAC).
Starting Oct. 1, hospitals will face up to a 1 percent penalty in 2013 for readmissions related to acute myocardial infarction, heart failure and pneumonia. In 2014, the penalty will go up to 2 percent and up to 3 percent in 2015, with four more conditions added to the list.
Sixty-seven percent of hospitals will face a penalty, averaging $125,000. A third (33 percent) will have no penalty, for instance, because they do not have enough cases. In aggregate, penalties will equal 0.24 percent of all inpatient payments in 2013.
September 20, 2012 FireceHealthcare | By Karen Cheung-Larivee
In an effort to curb readmissions, hospitals should invest in health technology, including medical records, information sharing and telemonitoring, Jonathan H. Burroughs, president and CEO of The Burroughs Healthcare Consulting Network, wrote in Hospital Impact. Of the 5 million hospital readmissions in the United States, more than two-thirds are preventable, amounting to an annual cost of $25 billion, Burroughs wrote last week. He suggested hospitals and other providers horizontally integrate electronic health records with patient personal healthcare records. “Healthcare is the last industry to digitalize.” Nevertheless, immediate access to shared clinical information between inpatient and ambulatory settings will help combat the fragmented communication.
Burroughs also noted that nurse navigators can influence unnecessary readmissions through centralized patient registers. Once patients leave the hospital, remote monitoring also can detect clinically significant changes in vital signs, blood sugar and other health screens. “The best thing your organization can do is to invest in those initiatives that provide a good return on investment by reducing cost and improving outcomes/service, particularly in light of the reimbursement changes yet to come.”
Posted by MEDITECH Connect on September 10, 2012 at 11:00pm : We recently sat down with the Paul Evans, CEO of PowerHealth OnDemand, to talk about performance management data, Obamacare and how it all relates to your MEDITECH hospital…
Q: So Paul, tell us a little bit about your background with MEDITECH, how many MEDITECH hospitals you currently serve and why you decided to start PowerHealth OnDemand?
Our relationship with MEDITECH naturally evolved. While we don’t have any staff that have ever been on with MEDITECH, we have formed a deep understanding of how the HIS works within the hospital community. PowerHealth OnDemand serves 600 hospital sites globally and 40+ sites in North America are MEDITECH users.
Our experience with MEDITECH clients is they are proven to be rich in data, but “information poor” in being able to retrieve and logically organize information into simple intuitive solution-based views. Additionally, it became apparent as we worked with more and more MEDITECH sites that hospital staff had a fundamental need to gain access to all the robust data from not only MEDITECH but from all the other systems hospitals implemented over the course of time. That’s what we do
Denver, Colo. (August 23, 2012): PowerHealth OnDemand, a global leader in providing Cloud-based business performance management and cost accounting solutions for hospitals and healthcare organizations, is pleased to announce its market leading solution has enabled Jordan Hospital to achieve considerable results. According to Gail Robbins, Jordan Hospital’s Administrative Director of Financial Planning, “ If you can’t access or accurately measure your financial and clinical operations data, you can’t improve your business and quality of patient care. PowerHealth OnDemand is our trusted source for data and information that enables our users with near real time results. The solution supports our financial and clinical operations decisions in the OR and ED, including our LEAN performance improvement initiative.”
August 20, 2012 | By Alicia Caramenico from Fierce Healthcare
The Centers for Medicare & Medicaid Services will recoup about $280 million in payments from more than 2,200 hospitals beginning in October–a number that has the attention of hospital executives, Kaiser Health News reports.
“I’m not sure penalties alone are going to move the needle, but they have raised awareness and moved many hospitals to action,” Eric Coleman, M.D., a national expert on readmissions at the University of Colorado School of Medicine, told KHN in a previous article.
For instance, a 0.66 percent penalty has prompted Delaware’s St. Francis Hospital to explore ways to improve handoffs and discharge to home care and skilled nursing facilities, KHN noted. “[H]aving these penalties over our head does kind of make a difference,” St. Francis Vice President for patient-care services and Chief Nursing Officer Coy Smith told WHYY.