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Maine Hospitals Frustrated by 'Re-admission' Penalties

ELLSWORTH, Maine - Over the past week, Medicare has issued penalties to a record number of U.S. hospitals that re-admitted patients within a month of initial treatment. Fifteen Maine hospitals are included in that mix. It's the third year that Medicare has issued penalties under the Affordable Care Act as a way to increase the quality of care and lower costs. But hospital officials say the numbers don't tell the whole story.

 

One Maine hospital that saw its Medicare penalty jump this year is Maine Coast Memorial in Ellsworth.

"You know, in 2014, we had no penalty, and the year before that we had a relatively small penalty. So the abrupt change took us a little off guard," says Maine Coast Memorial spokeswoman Patricia Patterson King.

King says staff are evaluating why the hospital was unexpectedly penalized this year. One possible explanation for the sudden spike is that Medicare has expanded the number of conditions it evaluates for re-admissions. This year, chronic lung problems and elective hip and knee replacements were added to heart attacks, heart failure, and pneumonia.

Medicare also increased the severity of the penalties. In Maine Coast Memorial's case, the penalty amounts to a 1.77 percent reduction in payment for each Medicare patient. Jeff Austin, of the Maine Hospital Association, says that adds up to a lot of money.

"Roughly half the revenue stream for a hospital is from Medicare," Austin says. "So when you start to lose one, two, three points off of half of your revenue, it really matters."

Patricia Patterson King of Maine Coast Memorial says the hospital has implemented a number of strategies to reduce re-admissions. Primary care office hours have been extended. Additional nurse care managers have been hired to work with patients after they're discharged. And there's a pharmacist who visits primary care offices to help patients manage their medications. "He'll go so far as to fill pill boxes," King says.

But one of the challenges with the Medicare readmission penalty program, she says, is that a hospital is penalized even when patients are re-admitted for a condition unrelated to their initial admission. "You know, if you had a joint replaced, and then 30 days later you had pneumonia, and within those 30 days you had to come back to the hospital, that counts as a readmission."

Central Maine Medical Center also saw its penalty rise from zero just two years ago to .33 percent this year.

"You know, it's a relatively small number of patients that puts you over that line," says Dr. David Lauver, chief of the Division of Hospital-based Care. Lauver says CMMC always strives to improve quality, and these penalties do make staff take a harder look at what can be improved.

But he points out that, overall, re-admissions in the U.S. are down. Yet three-quarters of the hospitals subject to the Medicare readmission penalty were fined this year. "So the set-up, if you will, of the program, does skew most hospitals into the penalty portion," Lauver says.

Jeff Austin of the Maine Hospital Association says hospitals should reduce unnecessary re-admissions. But he says the Medicare penalty program could stand some improvement.

"Medicare has another program called Value Based Purchasing, where the penalty money is pooled and then redistributed to those hospitals in the nation that are doing well, so that it has not only the stick of the penalty, but it has the carrot of a bonus payment if you're doing well," Austin says. "The re-admission program doesn't have that."

Overall, Maine hospitals compare favorably to the rest of the U.S. for Medicare re-admissions. The average national penalty this year in the U.S. is a .63 percent reduction per Medicare patient. In Maine, it's .31 percent.

David Lauver of CMMC says ultimately, reducing unnecessary re-admissions will require more than just the work of hospitals - it will require the whole health care system, from providers to patients, to ensure quality, coordinated care and management.