Most hospitals in the region will receive reduced federal payments for every Medicare patient stay in fiscal 2015 as a penalty for excessive patient readmission rates.
The penalties were announced recently by Medicare's Readmission Reduction Program, which federal officials launched in 2012 to control the growth of health care costs.
A record-high 2,610 hospitals nationwide will see lower Medicare fee-for-service payments in fiscal 2015, which began on Oct. 1, for having too many patients return for additional treatment within a month of being discharged.
Thirty-nine hospitals received the maximum penalty, a 3 percent reduction in federal reimbursements for every Medicare patient stay through Sept. 30, 2015. For example, if Medicare normally paid a hospital an average of $50,000 for a major heart procedure patient, the 3 percent penalty would deduct about $1,500.
According to the Hospital & Healthsystem Association of Pennsylvania (HHAP), 79 percent of Pennsylvania hospitals incurred some kind of penalty.
The national and state averages were each .63 percent.
Local impact
Among local hospitals, the highest penalty is at Sunbury Community Hospital and Schuylkill Medical Center-South Jackson Street, which each face a 1.36 percent penalty. Using the above example, the penalty would deduct about $680 from a $50,000 payout.
Williamsport Regional Medical Center was the only hospital in the region that won't face a penalty, according to the reduction program.
Other hospitals and their penalties include:
- Berwick Hospital Center, .75 percent.
- Evangelical Community Hospital, Lewisburg, .43 percent.
- Geisinger Bloomsburg Hospital, .32 percent.
- Geisinger Medical Center (GMC) (including Geisinger-Shamokin Area Community Hospital): .35 percent.
- Holy Spirit Hospital, Camp Hill, .25 percent.
- Lehigh Valley Hospital, Allentown, .5 percent.
- Pinnacle Health Hospital, Harrisburg, .13 percent.
- Schuylkill Medical Center-East Norwegian Street, 1.17 percent.
$350k from Geisinger
Since GMC receives approximately $100 million in Medicare reimbursements each year, it will have a total of about $350,000 deducted from its Medicare reimbursements over the year, the hospital reported.
More conditions evaluated
Experts say the surge in penalties stems from the expanded number of conditions the government evaluates.
During the program's first two years, the Centers for Medicare and Medicaid Services evaluated readmissions rates among patients who were admitted for one of three conditions: heart failure, heart attack and pneumonia. But federal officials this year added two more conditions - chronic lung problems, such as bronchitis, and elective hip and knee replacements.
A hospital was penalized if it posted higher than expected readmission rates in any of the categories.
"Essentially, it just made the hospitals vulnerable for more of the care that they provide under this program," said Martin Ciccocioppo, vice president of research at the HHAP.
The agency calculates readmission rates based on patient discharges from July 1, 2010 through June 30, 2013, according to a Kaiser Health News analysis. When calculating the rates, the Centers for Medicare and Medicaid Services factors the severity of illness, a patient's age and any additional medical conditions, among other things.
The penalty levied derives from the difference between the predicted rate and the actual rate, and applies to all Medicare patients admitted to the hospital.
About 18 percent of Medicare patients who were hospitalized in 2013 were readmitted within a month, Kaiser Health News found. It costs Medicare about $26 billion a year, with about $17 billion stemming from potentially avoidable readmissions.
Medicare uses a risk formula to decide how many readmissions are acceptable in each diagnosis at each facility. If the hospital exceeds the quota in any one of the five diagnoses, a penalty is assessed, and how far in excess of the quota a facility is determines the size of the penalty.
However, GMC notes, performing below the quota in one diagnosis does not compensate for exceeding the quota in another diagnosis, which is the case at GMC in heart failure, a category that includes the highest number of cases possible.