Amid pandemic, 66 Indiana hospitals facing fines for excessive readmissions

In the midst of a pandemic that has overwhelmed many hospitals and strained them financially comes another whammy: Sixty-six Indiana hospitals are being fined millions of dollars for having too many patients return for care within a month of discharge.

The federal government says readmissions are often unnecessary and cost taxpayers tens of billions of dollars a year for treatments that should have been caught the first time around, or were not followed up adequately.

So, for the ninth consecutive year, it is using the pressure of lower reimbursements to get hospitals to improve their numbers.

The Centers for Medicare & Medicaid Services said Nov. 2 that 2,545 hospitals across the United States would be docked as a result of having too many patients readmitted within 30 days of discharge.

These figures do not include 2,176 hospitals that Medicare exempted from the program this year, either because they had too few cases to judge; were veterans hospitals, children’s hospitals, psychiatric hospitals; or were critical-access hospitals, which are the only hospitals within reach of some patients. In Indiana, 37 hospitals were exempt for this reason.

The maximum penalty–a 3% reduction in payments in Medicare payments—was assessed against 39 hospitals across the nation (down from 56 last year), including one in Indiana, Kentuckiana Medical Center in Clarksville.

Because the penalties are applied to new admission payments, the total dollar amount each hospital will lose will not be known until after the fiscal year ends on July 30. But the impact is expected to be significant, as many hospitals count on Medicare and Medicaid for between one-third and one-half of their patient revenue. The Indiana Hospital Association estimates the total fine for all Indiana hospitals to be $10.6 million.

In central Indiana, 22 hospitals will see penalties:

• Community Hospital North, Indianapolis (1.56%)
• Witham Health Services, Lebanon (1.09%)
• Community Hospital South, Indianapolis (0.76%)

• IU Health West Hospital, Avon (0.6%)
• Hendricks Regional Health, Danville (0.5%)
• Major Hospital, Shelbyville (0.3%)
• Hancock Regional Hospital, Greenfield (0.24%)
• IU Health Methodist/University hospitals, Indianapolis (0.23%)
• Vincent Hospital, Fishers (0.16%)
• Community Hospital East, Indianapolis (0.15%)
• Johnson Memorial Hospital, Franklin (0.13%)
• Franciscan Health, Indianapolis (0.07%)
• Vincent Hospital, Carmel (0.06%)
• IU Health North Hospital, Carmel (0.03%)

The Indiana Hospital Association, an industry lobbying group, said it had concerns the federal government was using about methodology. It pointed to an Oct. 14  study  published in JAMA Cardiology that it said highlighted flaws in the CMS program, resulting in in appropriate penalties on hospitals, or in some cases, overlooking hospitals that should have been penalized.

“Hospitals remain committed to reducing readmission rates; however, we continue to have concerns about the methodology,” IHA spokeswoman Dixie Platt said.

The American Hospital Association told Kaiser Health News the fines are “unfortunate.”

“Given the financial strain that hospitals are under, every dollar counts, and the impact of any penalty is significant,” said Akin Demehin, director of policy at the American Hospital Association.

Many hospitals say they take pains to monitor patients and help them recover in an effort to avoid preventable readmissions. They send patients home with thick, detailed packets of discharge instructions and a month’s worth of medications. Hospitals send nurses and aides to patients’ homes to see how they are doing. In some cases, patients are given vouchers for cabs or van shuttles to get to their primary care physicians for follow-up visits.

The penalties are based on the frequency of readmissions of Medicare patients who had originally been treated for heart failure, heart attack, pneumonia, chronic lung disease, hip and knee replacement or coronary artery bypass graft surgery. Readmissions that were scheduled to occur are not counted.

The Centers for Medicare & Medicaid Services announced in September it may suspend the penalty program in the future if the chaos surrounding the pandemic, including the spring’s moratorium on elective surgeries, makes it too difficult to assess hospital performance, Kaiser Health News reported.

But for this year, the penalties remain in effect. Retroactive to the federal fiscal year that began Oct. 1, Medicare will lower a year’s worth of payments. The average reduction is 0.69%, with 613 hospitals receiving a penalty of 1% or more. In Indiana, 80% of hospitals will be docked, not counting those exempt from the evaluation.

Although Medicare began applying the penalties in 2012, disagreements continue about whether they have improved patient safety. On the positive side, they have encouraged hospitals to focus on how their patients recuperate, and some now assist them in procuring medications and follow-up appointments.

Medicare counts the readmission of patients who returned to a hospital within 30 days even if that hospital is not the one that originally treated them. In those cases, the penalty is applied to the first hospital. This year’s penalties are based on discharges from July 1, 2016, to June 30, 2019.