Half of South Florida hospitals pay Medicare’s readmission penalties — again

South Florida hospitals continue to struggle with an Affordable Care Act program that penalizes medical facilities for having too many patients return within a month of being discharged, with at least half of the 34 hospitals evaluated in Miami-Dade, Monroe and Broward counties paying higher fines to Medicare in 2016 than they did the prior year, according to federal healthcare data.

Overall, a total of 31 South Florida medical centers will see their payments trimmed for every Medicare patient who stays in the hospital beginning in October. Medicare will reduce payments to affected local hospitals by an average rate of 0.57 percent, according to a Kaiser Health News analysis of results for the Hospital Readmission Reduction Program.

As the ACA program enters its fourth year, the payment reductions from Medicare are slightly less severe than they were last year, both in the amount of the average fine and the number of hospitals penalized. All but one of the South Florida hospitals penalized last year were also punished in this round, though the average penalty dipped by .01 percent.

Statewide, about 81 percent of the 189 hospitals registered with Medicare will pay an average penalty of .67 percent in 2016, according to the data.

Three Florida hospitals will pay the maximum penalty of 3 percent, including Sebastian River Medical Center in Sebastian, St. Lucie Medical Center in Port St. Lucie, and St. Vincent’s Medical Center Southside in Jacksonville.

Kendall Regional Medical Center will pay a 1.91 percent penalty — the highest of any hospital in Miami-Dade, and sixth in the state.

Peter Jude, a spokesman for Kendall Regional, said in a written statement that the hospital has adopted several initiatives to reduce patient readmissions and improve outcomes, such as establishing a team of nurses that focuses on high-risk patients and daily meetings to focus on the measured diagnoses of those patients.

In addition to Kendall Regional, the hospitals with the highest penalty rates in South Florida are located in Miami-Dade, including Hialeah Hospital, Aventura Hospital and Medical Center, Palmetto General Hospital and Palm Springs General Hospital.

Kathryn Walton, marketing director for Aventura Hospital, noted in an email that the facility also has established a team of nurses that follows up with patients with cardiac diagnoses, who tend to have higher average readmission rates.

“We also offer a medication program where pharmacists follow up with patients 72 hours after they leave, to help ensure they are taking medications as prescribed,” Walton wrote.

A spokesperson for Tenet Healthcare, which owns Hialeah and Palmetto General hospitals, issued a statement on behalf of the medical centers: “Hialeah Hospital and Palmetto General Hospital are focused on better engaging patients and their loved ones during hospitalization, the discharge process and throughout the patient’s follow-up care. We are committed to reducing preventable readmissions and improving the health and well being of our communities.”

Readmissions have gained a lot of attention in recent years as healthcare professionals adjust to new expectations that hospitals take responsibility for patient care even after patients have left the hospital.

Fines for 2016 are based on patient readmissions between July 2011 and June 2014 and include Medicare patients who were originally hospitalized for one of five conditions: pneumonia, heart failure, heart attack, chronic lung problems and elective hip or knee replacements.

Not all hospitals are subject to the readmission reduction program. Excluded are so-called “critical access” hospitals that are the only providers within a designated area and meet other requirements, Veterans Affairs hospitals and children’s hospitals.

Though national readmission rates have dropped since the fines began, some have raised concern that while Medicare adjusts its measures for some patient characteristics linked to higher rates of readmissions, the program does not compensate for others, such as unemployment, poverty and lack of reliable public transportation.

Hospitals have been lobbying both Medicare and Congress to take into account the socioeconomic background of patients when assessing readmission penalties. They argue that some factors for readmissions — such as whether patients can afford medications or healthy food — are beyond their control.

Readmission penalties also appear to provide hospitals with an incentive to change the way they classify patient stays.

Hospital emergency rooms sometimes ask patients to stay for “observation” before being admitted as an inpatient or being sent home. Patients who are on observation status are considered outpatients and do not count toward readmission measures and penalties.

The number of “observation” patients has grown rapidly in recent years, according to the U.S. Department of Health and Human Services, which reported an estimated 1.5 million observation stays among Medicare beneficiaries in 2012.

Since Medicare readmission penalties took effect in 2012, incentives to avoid them appear likely to be driving up the use of observation stays, according to a study from the AARP.

Among the AARP’s concerns about the increased use of observation stays is that Medicare beneficiaries may pay more out-of-pocket costs as outpatients, including co-payments and emergency room fees, than they would if they were admitted as inpatients.

Jordan Rau is a senior correspondent at Kaiser Health News.

This story was originally published August 7, 2015 at 12:27 PM with the headline "Half of South Florida hospitals pay Medicare’s readmission penalties — again."