The threat of penalties as high as 3% of a hospital's Medicare reimbursement has prompted encouraging reductions in costly readmissions, a top representative of the Obama administration told the Senate Finance Committee yesterday.
Jonathan Blum, acting principal deputy administrator and director of the Centers for Medicare & Medicaid Services, in prepared remarks, touted "a decrease in the rate of patients returning to the hospital after being discharged.
"After fluctuating between 18.5% and 19.5% for the first five years, the 30-day all-cause readmission rate dropped to 17.8% in the final quarter of 2012. This decrease is an early sign that our payment and delivery reforms are having an impact," Blum said.
Blum added that the Patient Protection and Affordable Care Act requires Medicare to reduce payments to hospitals that have high rates of readmissions among patients with heart attack, heart failure, and pneumonia, some of the most expensive conditions that bring patients back to the hospital. Those penalties, up to 1% for the first year, began last October 1 for 2,211 hospitals, and rise to up to 2% in FY 2014 and up to 3% in FY 2015.
Blum said that "beginning in fiscal year 2015, we will have the authority to expand the program so that additional measures could be included, and we expect that the program will have an even greater impact.
"Though the payment adjustments took effect only recently, hospitals have been preparing for this program for some time and results suggest it is already having a positive impact," with reductions across the country.