Hospitals Are Being Penalized for High Readmission Rates

Written by
Abraham Jaros
Updated on Thursday, Sep 7, 2023

In an attempt to reduce patient readmission rates, the government is cracking down on hospitals and cutting Medicare reimbursements. According to Medicare, nearly 20 percent of Medicare patients are readmitted within one month. In response to that statistic, the Affordable Care Act has authorized the reduction in Medicare reimbursements to hospitals with high readmission rates. The maximum penalty for repeat patients is one percent. The goal is for hospitals to provide better care to patients during and after their hospitals stay, so that it is unnecessary for patients to return. A total of 278 hospitals are receiving the maximum one percent penalty including Mount Sinai and New York Presbyterian in Manhattan.

Will Cutting Medicare Reimbursements Reduce Readmissions?

Hospitals are criticizing the penalties as being counterproductive. Hospitals that have high readmission rates often serve low-income areas - causing the hospitals that serve the underprivileged to suffer the most under the new law. Doctors and medical professionals also complain that many patients return because they have failed to fill their prescriptions or follow the doctor’s orders, not because the doctor failed to provide the right care. Regardless of the criticisms, experts say that the penalties have raised hospital awareness regarding readmission rates. In an industry that used to encourage readmissions because it meant more money, the penalties have caused many hospitals to change their policies and be more cognizant of their patient return rate. Whether or not the penalties will actually reduce readmissions is yet to be seen but it seems they are causing hospitals to be more focused on patient care and safety. Source: MPR, “Thousands of Hospitals Face Penalties for High Readmission Rates," Jordan Rau, August 13, 2012

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