Medicare Penalizes Nine N.H. Hospitals For Too Many Readmissions

Oct 7, 2014

Credit St. Joseph Hosptial, Nashua

One in five Medicare patients treated for a list of common conditions - like pneumonia and heart failure -  are readmitted to the hospitals that treated them within a month.

One way the federal government is trying to improve that is by penalizing hospitals based on their readmission rates. It’s a provision of the Affordable Care Act that will hit 2,610 hospitals across the country next year, including nine in New Hampshire.

There are two big reasons why hospital readmissions are bad: they’re expensive and they may indicate the hospitals made mistakes when they sent people home. The hospital with the highest readmission rate in New Hampshire, and which will face the highest penalty, is St. Joseph in Nashua.

"I don’t think any of us in the state can afford to lose anything," says Dr. Rich Boehler, President of St. Joseph.

Next year St. Joseph will be reimbursed for Medicare services at a lower rate - about 98.4 cents on the dollar. While Boehler suggests the penalty will hurt St Joseph, it will account for only one-tenth of a percent of the hospital's total revenue.

Whether it hurts St. Joseph's wallet or not, the federal government wants all hospitals to keep readmission rates low. These penalties are part of a broader push to stop paying doctors and hospitals for the amount of care they provide, and start paying them for the quality of care.

Jeremiah Brown, an assistant professor at the Dartmouth Institute, says since the feds rolled out these penalties two years ago, readmissions have dropped.

"What we do know is that it does seem to be promoting change within hospitals," says Brown.  

And starting this month hospitals will be judged and possibly penalized based on another new measure.

"There’s now a 30-day death penalty," says Brown.

You heard that right: a death penalty. If patients leaving a hospital die at a rate higher than the national average, that hospital will lose revenue from Medicare.

Dr. Boehler at St. Joseph says every hospital wants to better serve its patients. And he points out even though his hospital’s penalty has gone up over three years, St. Joseph’s readmission rate has actually gone down. That’s because Medicare averages a hospital’s readmissions over a three year period.

"If you were to take a snapshot today of readmissions, I think I’d come out smelling like roses," says Boehler.

In fact, since the penalty first came out two years ago, hospital readmissions are down 20 percent statewide. Whether this is caused by the new penalties or simply coincides with them, or both, is impossible to know. But assuming readmission rates keep dropping, that’ll be cheaper for hospitals in the long run and better for patients.