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Medicare announces excess readmission penalties

By , - Last modified: August 16, 2012 at 9:26 AM

Beginning in October, about two-thirds of hospitals across the nation will begin experiencing Medicare penalties for excess readmissions – and Pennsylvania is on the wrong side of the curve.

The Patient Protection and Affordable Care Act allows Medicare to assess a maximum reimbursement penalty of 1 percent on hospitals for excessive readmissions this year, Kaiser Health News reported. The maximum penalty will rise to 2 percent in 2013 and 3 percent in 2014.

The foundation noted that its analysis showed that hospitals treating the most low-income patients will be hit particularly hard by the penalty and that some top-ranked national institutions received the maximum penalty.

According to a chart from Kaiser, the national average of the penalty is 0.28 percent. Pennsylvania's average penalty is 0.35 percent, better than just 11 other states.

However, most area hospitals fared better individually. Four incurred no penalties: Lancaster General Hospital, Heart of Lancaster Regional Medical Center, Penn State Milton S. Hershey Medical Center and OSS Orthopaedic Hospital.

Penalties for other area hospitals are as follows: PinnacleHealth Hospitals, 0.01 percent; Good Samaritan Hospital, 0.03 percent; York Hospital, 0.06 percent; Carlisle Regional Medical Center, 0.12 percent; Ephrata Community Hospital, 0.14 percent; Holy Spirit Hospital, 0.22 percent; Lancaster Regional Medical Center, 0.29 percent; and Memorial Hospital York, 1 percent.

The penalty will cost hospitals about $280 million in Medicare funds this year, Kaiser said, compared with the $17.5 billion readmissions cost Medicare annually. Kaiser also said the national average readmission rate has remained steady at about 19 percent for several years, even as many hospitals have worked to lower theirs.

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