Twenty Colorado hospitals face penalties in the coming year for seeing too many discharged Medicare patients come back within a month, small hits that nevertheless sting in an era of quality measurements and patient-centered care.
Hospitals will lose up to 1 percent of the next year's Medicare payments if they readmitted too high a proportion of their patients from 2008 to 2011. While 26 Colorado hospitals escaped the sanction, a Cheyenne Wells hospital will lose 1 percent, and five Centura hospitals are being fined up to a quarter of 1 percent of Medicare bills.
Exempla Lutheran Medical Center took a 0.42-percent penalty, according to a list compiled by Kaiser Health News. The penalties were launched by federal Medicare officials as part of national health-care reform Oct. 1.
Though a small portion of future bills, the penalties add up as Medicare payments often constitute half of a hospital's overall revenue. On a $10,000 inpatient bill, a 1 percent penalty would cost the hospital $100 of the Medicare reimbursement.
Centura said the penalties at its hospitals would cost the system about $250,000 in the next year, out of $2.7 billion in revenue. Chief financial officer Dan Enderson said the hospitals take the penalties seriously.
Centura is already focused on cutting readmissions, regardless of the new penalty, because better treatment "is the right thing to do," Enderson said.
Lutheran said it would lose about $140,000 in revenue, out of hundreds of millions of dollars.
"We're always surprised to learn when we're outside of the norm," said Lloyd Guthrie, vice president of accountable health networks.
The hospital scores highly in national assessments of heart-attack care, one of the common cases where readmissions can happen, Guthrie said. With 40 to 50 heart-attack patients a month, a few readmissions can skew the numbers, he said.
Still, Lutheran added, it will be redoubling efforts to follow up with patients after they leave the hospital, making sure medications are taken and nurses visit those needing more help.
Hospitals should welcome measurements because "it usually turns out to be better for our patients," Guthrie said. "So we view this relatively small penalty as just another way to stay focused on the right work."
Health reformers see readmissions as one of the key expenses that could be prevented with a better design of the system, including fairly simple fixes.
While not all readmissions are a hospital's fault, "refusing to pay for subpar care that could be better coordinated and more patient-focused is a move in the right direction and brings attention to a major health-care issue," said Phil Kalin, president of the Colorado nonprofit Center for Improving Value in Health Care.
"Payments must increasingly be aligned with outcomes if we are to see improvements in quality while lowering the cost of health care," he said.
The American Hospital Association has said the penalty system should include more leeway for a hospital's patient population, if its cases are riskier than average.
Some of Colorado's major hospitals with complex patient loads will see no penalties, including Denver Health and University of Colorado Hospital.
Keefe Memorial Hospital in Cheyenne Wells is the only Colorado hospital with the full 1 percent penalty. An administrator there said he had just started the job and could not comment on the penalties.
Michael Booth: 303-954-1686, email@example.com or twitter.com/mboothdp