Vanderbilt, other hospitals will lose millions of Medicare money

Starting in October, thousands of hospitals across the country will face a penalty if patients are readmitted within a month of being discharged.  This practice is to encourage more quality care or lose large amounts of Medicare funding.  Witholding all this money will strain the hospital’s budget and increase costs for everyone.  Hospitals cannot control proper medical care once the patient has been discharged, but they are being treated as if it is their fault if the people return.  Patients can help by taking responsibility for their care and following doctors orders.

Physicians and facilities can find new cash-paying patients at MediBid.  Practice medicine and provide timely medical care without the hassles and restrictions of dealing with insurance companies, and deal directly with patients wanting affordable medical careCompetition with other physicians and facilities and complete price transparency keep prices reasonable.

Vanderbilt, other hospitals will lose millions in Medicare money

More than 2,000 hospitals — including some nationally recognized ones in Nashville — will be penalized by the government starting in October because many of their patients are readmitted soon after discharge, new records show.

Together, these hospitals will forfeit about $280 million in Medicare funds over the next year as the government begins a wide-ranging push to start paying health care providers based on the quality of care they provide.

Nashville-area hospitals will lose several million dollars in federal reimbursements starting in seven weeks when the tough new rules take effect.

At Vanderbilt University Medical Center, an analysis of readmission rates shows that hospital will lose as much as $1 million in annual Medicare payments because of the government’s penalties, which are based on how often Medicare patients treated over a three-year period for heart failure, heart attack and pneumonia got readmitted within 30 days of their initial care.

While that’s only a sliver of Vanderbilt’s total Medicare payments, the hospital’s top finance officer said the new rules have his attention.

“Every dollar hurts, and they’re all important to us,” said Warren E. Beck, senior vice president of finance at Vanderbilt. An analysis of readmission rates shows the hospital will be docked the equivalent of 0.62 percent of its Medicare reimbursements. That equals a hit of $500,000 to $1 million over 12 months, Beck estimated.

Among other hospitals in the Nashville area, Saint Thomas Hospital will be penalized at 0.83 percent of its Medicare reimbursements. Gateway Medical Center in Clarksville faces a 1 percent reduction, the most possible in the first year of the new sanctions.

Overall, the Saint Thomas Health hospital system expects to lose about $1.2 million in reimbursements for its current fiscal year, including roughly $326,000 linked to its Middle Tennessee Medical Center operation, which also faces a 1 percent maximum penalty.

Rebecca Climer, the Saint Thomas system’s spokeswoman, said MTMC has improved readmissions of heart failure patients, but the results are too new to be reflected in the Medicare data that determined the penalties.

Meanwhile, at the other end of the spectrum, Centennial Medical Center in Nashville, Cookeville Regional Medical Center and NorthCrest Medical Center in Springfield, Tenn., are among institutions that won’t lose any Medicare money. None will face penalties.

1 in 5 patients return
Nationwide, with nearly one in five Medicare patients returning to the hospital within a month of discharge, the government considers readmissions a prime symptom of an overly expensive and uncoordinated health system. Hospitals have had little financial incentive to ensure patients get the care they need once they leave, and in fact they benefit financially when patients don’t recover and return for more treatment.

Nearly two million Medicare beneficiaries are readmitted within 30 days of release each year, costing Medicare $17.5 billion in additional hospital bills. The national average readmission rate has remained steady at slightly above 19 percent for several years, even as many hospitals have worked harder to lower theirs.

The penalties, authorized by the 2010 health care law, are part of a multipronged effort by Medicare to use its financial muscle to force improvements in hospital quality. In a few months, hospitals will be penalized or rewarded based on how well they adhere to basic standards of care and how patients rated their experiences.

Overall, Medicare has decided to penalize around two-thirds of the hospitals whose readmission rates it evaluated, the records show. The penalties will fall heaviest on hospitals in New Jersey, New York, the District of Columbia, Arkansas, Kentucky, Mississippi, Illinois and Massachusetts, a Kaiser Health News analysis of the records indicates.

A total of 278 hospitals nationally will lose the maximum amount allowed under the health care law — 1 percent of their base Medicare reimbursements. Several of those are top-ranked institutions, including Hackensack University Medical Center in New Jersey, North Shore University Hospital in Manhasset, N.Y., and Beth Israel Deaconess Medical Center in Boston, a teaching hospital of Harvard Medical School.

“A lot of places have put in a lot of work and not seen improvement,” said Dr. Kenneth Sands, senior vice president for quality at Beth Israel. “It is not completely understood what goes into an institution having a high readmission rate and what goes into improving” it.

Sands noted that Beth Israel, like several other hospitals with high readmission rates, also has unusually low mortality rates for its patients, which he says may reflect that the hospital does a good job at swiftly getting ailing patients back into care and preventing deaths.

Middle TN efforts
Rob DeBerry, a spokesman for NorthCrest, said careful planning has helped that hospital avoid excess readmissions and escape Medicare’s penalties.

The hospital attempts to screen for high-risk patients as they’re admitted, and upon discharge, patients receive instructions for care at home. That includes details on why medications were prescribed, and why it’s important to take them. Later, NorthCrest schedules follow-up appointments for patients with primary care doctors and continues to review how things are going.

Other Middle Tennessee hospitals say some cases are difficult to anticipate, though, and readmission rates aren’t always a clear sign of hospital performance.

Ryan Windham, a Gateway spokesman, cited a range of variables outside of the hospital’s control after a patient is discharged. Those include whether the patient goes home or to a post-acute care setting, whether the patient follows their doctors’ instructions and other underlying health issues.

“As we continue to work with our medical staff and other health-care resources outside of the hospital, we expect to continue to see a decline in the overall rate of patients who are readmitted,” Windham said.

John Howser, a Vanderbilt spokesman, said major regional medical centers like Vanderbilt’s are at risk of higher levels of readmissions because of the serious cases they handle, but the hospital is working to improve.

“We want to lead in this area and create evidence-based, best practice strategies including post-discharge phone calls, home care referrals, improved anticipatory planning for discharge and improved patient education,” Howser said, citing the goal of one federally funded effort to trim readmissions by 20 percent over the next 17 months.

One incentive to lower readmission rates is that the bite Medicare will take out of a hospital’s reimbursements will rise over time.

The maximum Medicare penalty will increase after this year to 2 percent of regular payments starting in October 2013 and then to 3 percent the following year. This year, the $280 million in penalties comprise about 0.3 percent of the total amount hospitals are paid by Medicare.

What the data show
According to Medicare records, 1,933 hospitals will receive penalties less than 1 percent; the total number of hospitals receiving penalties is 2,211.

Massachusetts General Hospital in Boston, which U.S. News last month ranked as the best hospital in the country, will lose 0.5 percent of its Medicare payments because of its readmission rates, the records show.

The penalties have been intensely debated. Studies have found that African-Americans are more likely to be readmitted than other patients, leading some experts to be concerned that hospitals that treat many blacks will end up being unfairly punished. Hospitals have been complaining that Medicare is applying the rule more stringently than Congress intended by holding them accountable for returning patients no matter the reason they come back.

Craig Becker, president of the Tennessee Hospital Association, takes issue with Medicare’s definition of a readmission. “They define readmission as anybody who comes back to the hospital for any reason, and there are lot of reasons why people appropriately should be readmitted,” Becker contends.

Using his mother (who recently passed away) as an example, Becker recalled how after she’d gotten a new hip, she was sent to a nursing home with orders to take care and not bend over. His mother, who had dementia, bent over and her hip popped out of its socket. She had to return to the hospital to get it replaced. “That’s not the hospital’s fault,” Becker said.

Some safety-net hospitals that treat large numbers of low-income patients tend to have higher readmission rates, which the hospitals attribute to a lack of access to doctors and medication after discharge. The analysis of the penalties shows that 76 percent of hospitals that treat lots of low-income patients will lose Medicare funds in the fiscal year starting in October.

Atul Grover, chief public policy officer for the Association of American Medical Colleges, called Medicare’s penalties “a total disregard for underserved patients and the hospitals that care for them.”

Medicare disagreed, saying “many safety-net providers and teaching hospitals do as well or better on the measures than hospitals without substantial numbers of patients of low socioeconomic status.”
Editor’s note: Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

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