Medicare fines more South Florida hospitals for readmitting patients

Across the Sunshine State, hospitals in record numbers — 148 in all — are feeling the sting of millions of dollars in Medicare fines for having too many patients return within a month for additional treatments, federal records released this month show.

The average fine levied against Florida hospitals for readmitting patients nearly doubled since last year, from about a quarter of 1 percent of Medicare payments to more than a half of 1 percent, according to data analyzed by Kaiser Health News.

New penalties began this month. Most of the hospitals — 115 of the 167 surveyed — will pay higher penalties over the prior year.

In Miami-Dade and Broward, at least 32 hospitals will pay penalties next year for readmitting patients at rates that exceed government standards, including Kendall Regional Medical Center, which will pay the highest penalty rate in the area at 1.71 percent.

Locally, the average penalty in 2015 is .56 percent — up from .39 percent last year, according to the KHN analysis.

At stake for Florida hospitals are millions of dollars in reduced payments from Medicare, beginning this month — and the ability to sink or swim in a rapidly-changing healthcare environment, transformed by the Affordable Care Act.

Together with other ACA-related reforms, the federal government’s efforts to reduce Medicare patient readmissions are part of a larger plan to change the culture of healthcare from treating patients when they’re sick to keeping them healthy and out of hospitals.

Around the country, hospital administrators are being forced by Medicare and the ACA to correct problems with patient safety and quality of care — with the requirements, measurements and penalties for failure increasing every year since 2010, said Sue MacInnes, chief market solutions officer for Medline Industries, a manufacturer of medical supplies and a healthcare cost-management consultant.

“There’s a lot of activity happening all at once,” MacInnes said, “and it’s going to be really, really difficult to turn some ships.”

As the largest single payer in the nation’s healthcare system, Medicare has a lot of muscle to jolt hospitals into paying attention to what happens to their patients during a hospital stay and after they leave.

New plans

Around the country, many hospitals are replacing perfunctory discharge plans — such as giving patients paper instructions — with greater engagement, ensuring that outside doctors monitor their recoveries and giving supplies of medication to patients who might not be able to afford them.

Others are still struggling to meet the new expectations, with some hospitals resisting reform efforts because they benefited financially when a patient returned.

Nationwide in 2013, nearly 18 percent of Medicare patients who had been hospitalized were readmitted within a month. While that is lower than past years, roughly 2 million patients return a year, costing Medicare $26 billion. Officials estimate $17 billion of that comes from potentially avoidable readmissions.

Under the Hospital Readmissions Reduction Program, three quarters of hospitals nationwide that are subject to the program are being penalized. That means from Oct. 1 through Sept. 30, they will receive lower payments for every Medicare patient stay — and not just for those patients who are readmitted.

Over the course of the year, the fines will total about $428 million, Medicare estimates, as a record number of hospitals across the country — 2,610 — receive fines for 2015.

While some penalties are as small as a hundredth of a percent, hospitals with the highest readmission rates are losing 3 percent of each payment, an increase from a maximum punishment of 2 percent last year. The increase brings the top penalties to the full force authorized by the federal health law.

One reason for the higher and more widespread fines is that this year Medicare began evaluating readmissions of two new categories of patients — those initially admitted for elective knee or hip replacements, and those suffering lung ailments such as chronic bronchitis. Those patients were assessed along with the heart failure, heart attack and pneumonia patients Medicare has examined since the penalties began in October 2012.

A hospital was fined if it had higher than expected readmission rates in any category. Thus, a number of specialty hospitals that focus on hip and knee replacements received fines for the first time because readmissions of those patients are now being assessed, the KHN analysis found. Fines increased for each condition where rates were above Medicare’s expectations.

“Every time they add conditions, the penalties go up,” said Nancy Foster, a quality expert at the American Hospital Association.

Across Florida, 167 hospitals were reviewed by Medicare — and only 11 received no penalty for 2015. The majority, or 115 hospitals, saw their penalty increase over the prior year.

In South Florida, 32 hospitals will pay a fine, with the average penalty at .56 percent.

That compares with at least 33 hospitals in the Tampa area that will face fines — with the average penalty at .52 percent — and nine that will be penalized in the Orlando area, where the average fine is .83 percent.

Jackson Health System, Miami-Dade’s public hospital network, lowered its readmission penalty for the third consecutive year, from .73 percent in 2014 to .53 percent in 2015.

But unlike last year, when most South Florida hospitals reduced their readmission penalties, the majority of hospitals in Miami-Dade and Broward will have to pay increased penalties for 2015, according to the KHN data.

Kendall Regional, which is owned by HCA, one of the nation’s largest for-profit hospital chains, leads Miami-Dade hospitals.

In Broward, Northwest Medical Center in Margate — also an HCA hospital — led all hospitals in readmissions penalties.

Peter Jude, a spokesman for Kendall Regional, said hospital administrators have established new practices that have helped reduce readmissions to the expected rate.

“We place a high priority on helping all our patients have a successful and lasting recovery,” he said.

The new efforts include establishing a team of nurses to focus on high-risk patients and daily meetings of care-coordination teams.

Similarly, administrators have established protocols to reduce readmissions at Palmetto General and Hialeah hospitals, which ranked third and fourth, respectively, in penalty rates among Miami-Dade and Broward facilities, according to the KHN data.

Protocols in place

Shelly Weiss, a spokeswoman for the hospitals, which are owned by Tenet Healthcare Corp., said the company has “protocols in place to help decrease associated readmissions when possible.”

Bruce Rueben, president of the Florida Hospital Association, said hospital administrators are still trying to understand and comply with the requirements of the healthcare reform law. But he doesn’t see a reason for alarm in the recent Medicare readmission penalties.

“There’s no big crisis here,” he said. “There’s nothing in this data that says things aren’t going in the right direction. Penalties now are just part of the overall challenge of moving toward a healthcare delivery system that focuses on keeping people healthy, as opposed to treating them when they’re sick.”

Still, many hospitals appear to be struggling with readmissions, which is only one of two Medicare penalty programs enacted under the ACA. The other program, the Hospital-Acquired Condition Reduction Program, reduces payments to hospitals with high rates of preventable injuries, such as catheter-related infections, bedsores and falls.

MacInnes of Medline said with so much reform happening at once, hospital administrators are forced to respond with multiple efforts.

“It’s what the healthcare leadership would call Whac-A-Mole — one team working on pressure ulcers, one team working on CAUTI [catheter associated urinary tract infections], one team working on readmissions,” she said.

While hospitals and administrators may struggle now, MacInnes said, patients will be better off in the future.

“It will change behaviors,’’ she said, “and it will make people look at processes and efficiencies and think entirely differently about healthcare delivery.’’

This story was produced in collaboration with Kaiser Health News, an editorially independent program of the Kaiser Family Foundation. Jordan Rau reports for KHN.

This story was originally published October 10, 2014 at 10:39 PM with the headline "Medicare fines more South Florida hospitals for readmitting patients."