A sick, elderly person lying in bed
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Hospitals are facing unrelenting pressure to find post-acute care partners that can help manage readmissions, a decade into a program designed to improve patient care and save the Medicare system money. 

Medicare recently issued its 10th annual round of penalties through the Hospital Readmissions Reduction Program. The agency reduced payments for 2,4999 hospitals, which accounts for 47% of all hospital facilities, the Kaiser Health Network reported on Thursday.

The average penalty was a 0.64% payment reduction for each Medicare patient starting from October of this year to September 2022. 

“Medicare estimates the penalties over the next fiscal year will save the government $521 million,” the report states. “Thirty-nine hospitals received the maximum 3% reduction, and 547 hospitals had so few returning patients that they escaped any penalty.” 

The current penalties were calculated by tracking Medicare patients discharged between July 2017 and December 2019, the report explained. Penalties are based on three years of patients, but the final six months in the current period were excluded due to the COVID-19 pandemic.

Skilled nursing providers also have found themselves under pressure to limit unnecessary hospital transfers or risk referrals. Starting in 2018, the worst nursing homes as determined by a federal readmission measure became subject to a 2% penalty.