AHA.14: Readmission penalties hit inner-city hospitals hardest

Medicare penalties on 30-day readmissions for MI, heart failure and pneumonia disproportionately ding inner-city hospitals with disadvantaged patients, findings presented Nov. 17 at the American Heart Association scientific session in Chicago showed. “It is affecting those safety-net hospitals,” said lead researcher Arshad A. Javed, MD.  

The Centers for Medicare & Medicaid Services (CMS) withholds a percentage of payments to hospitals with higher than expected 30-day readmission rates for the three conditions. The penalty for 2014 totaled 2 percent with an increase to 3 percent. CMS argues the initiative will prompt poor performing hospitals to improve care and lower costs for the healthcare system.

While the program uses a risk-adjustment formula, it does not account for socioeconomic factors. That has raised concerns that the safety-net and teaching hospitals serving vulnerable patients may be unduly penalized; if they are economically strapped, the lost revenue might tip them further into decline.

Javed, chief medical resident at John D. Dingell V.A. Medical Center in Detroit, and colleagues compared readmission penalties for 2013 and 2014 in hospitals in large cities for all states except Maryland, which is involved in a Medicare demonstration project. They also evaluated census and socioeconomic data. The 2013 results were based on data from 2008 to 2011, with 2014 results reflecting 2012 and 2013 data.

They found that safety-net hospitals in larger cities received higher penalties. Five hospitals in Detroit and three in Newark, N.J., had the highest penalties, at 0.9 percent. Indianapolis, by comparison, had a rate below 0.2 percent. They reported a moderate correlation of readmission penalties with a low level of education for people in the city and a significant positive correlation with the rate of unemployment in a city.

“Level of education, unemployment and low household income were significantly associated with readmission penalties,” Javed said in an interview with Cardiovascular Business. “If they [CMS] adjust them [penalties] according to those three factors, it will make a huge difference.”

The comparison also showed a slight lowering of readmission penalties for Detroit, which could signal an improvement in quality, a goal of the initiative. But Javed cautioned that the trend would need to extend over time.

Hospitals with funding and higher socioeconomic status are positioned to fare better under the readmissions penalties, he noted. “Hospitals that are just surviving, they have been trying their best, [but] it will be difficult for those hospitals to thrive under those penalties,” he observed.

CMS is investigating the possibility of incorporating socioeconomic factors into its risk-adjustment formula, which Javed and his colleagues encourage. He added that they don’t oppose the readmission penalty program but advocate for change, especially in cities such as Detroit where the socioeconomic imbalance is more pronounced.