Medicare Revises Readmission Penalties…Again

For the second time in six months, Medicare has erred in calculating penalties for more than 1,000 of the nation’s hospitals.

As a result, Medicare has slightly lessened its readmissions penalties for 1,246 hospitals as part of its new program pressuring hospitals to ensure patients stay healthy health after they leave.

The payment changes for most hospitals were minute, averaging 0.03 percent of each reimbursement. Overall, hospitals will pay $10 million less in penalties than previously calculated, for a total of $280 million this year. The changes are retroactive to October 2012, when the program began.

Last month, Jonathan Blum, a top Medicare official, told a U.S. Senate committee that the national readmission rate dropped to 17.8 percent in the last three months of 2012 “after fluctuating between 18.5 percent and 19.5 percent for the past five years.”

This second correction brings many hospitals closer to where they originally were. In fact, 329 hospitals that had their penalties altered in September are now having their initial penalties restored.

The total number of penalized hospitals is 2,213, roughly two-thirds of hospitals whose readmission rates were reviewed. The number of hospitals receiving the maximum 1 percent penalty decreased from 307 to 276.

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