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A miscalculation by the Centers for Medicare & Medicaid Services means that more than 1,400 hospitals with comparatively high readmissions rates will lose more federal funding than previously thought, the agency revealed in October.
While the additional reimbursement losses are not expected to be huge, the announcement raised already high anxiety levels among hospital and long-term care providers to new levels.
The largest penalty increase was from 0.62% to 0.73% of Medicare reimbursements, a Kaiser Health News analysis showed. Overall, 1,422 hospitals will lose more funding than previously expected while 55 will lose less than first thought.
Oct. 1 marked the start of a new CMS policy that withholds up to 1% of a hospital's Medicare funding, based on 30-day readmission rates. The potential penalties will double next year and triple the year after.
That has created a quality “race” among post-acute care providers, including long-term care operators. Hospitals will want to partner only with other providers that have demonstrated a record of good care outcomes — and low rehospitalization rates.
CMS's miscalculation occurred when it inadvertently considered Medicare claims info from before July 1, 2008, officials said. The assessment period was supposed to be only from July 2008 through June 2011.
The correction was “disconcerting, particularly with a policy that's bad to begin with,” said Atul Grover, M.D., Ph.D., a medical college lobbyist quoted by Kaiser.
Long-term care providers have focused on improving to become better partners. The American Health Care Association notably has set a goal of cutting rehospitalizations within 30 days by 15% by March 2015.