Medicare Eases Up on Readmissions Penalties for Hospitals Serving the Poor

Under congressional mandate, Medicare is loosening its annual readmissions penalties for many hospitals serving large populations of low-income persons, reports National Public Radio . For the last six years, Medicare has penalized hospitals for having too many care recipients wind up back in their care within a month. However, beginning in October, lawmakers decreed that Medicare address a long-standing complaint from safety-net hospitals. They claim their recipients are more likely to suffer complications after discharge through no fault of the institutions, but rather because they cannot afford medications or lack regular doctors to monitor their recoveries. This year, the Centers for Medicare & Medicaid Services stopped rating each hospital's performance against all others, and instead assigned hospitals to five peer groups of institutions with similar proportions of low-income visitors. Medicare then compared each hospital's readmission rates from July 2014 through June 2017 against its peer group's readmission rates to see if a penalty was justified and the amount it should be. Generally, Medicare will apply payments to 2,599 hospitals in fiscal 2019, while fines against safety-net hospitals will fall by a fourth on average from fiscal 2018. Meanwhile, the average penalty for the hospitals with the fewest low-income visitors will rise from last year. Medicare has begin to differentiate hospitals that serve a high proportion of low-income persons by considering how many of their Medicare beneficiaries also were Medicaid-eligible.