Medicare Reduces Penalties on Hospitals Serving the Poor

Medicare, readmission, hospitals, gavel

Medicare has eased up on readmission penalties for hospitals that serve poor populations.

Hospital readmission

In past years it was the policy to fine a hospital for having a high readmission rate, or many people being readmitted a short amount of time (one month) after being discharged.

The penalties were part of the Affordable Care Act and were meant to ensure better care. But findings have realized that there are several factors that go into being readmitted to the hospital, including not being able to afford medications or not having a regular doctor.

These hospitals, also called safety net hospitals, struggle to stay afloat anyway, with many of their patients not having insurance.

Judge hospitals against their peers

Now, the Centers for Medicare and Medicaid Services (CMS) will judge each hospital only on peer hospitals, not against all hospitals.

The penalties this year will decrease by an average of one fourth on average from last year.

The hospital industry is against the policy of penalizing hospitals, claiming that incurring penalties only makes it harder for the hospital to care for patients.

Congress’ Medicare Payment Advisory Commission came to the conclusion that the penalties in the past have successfully reduced readmission and helped save Medicare $2 billion.

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