This week there’s an article in the Orlando Business Journal outlining upcoming cuts in Medicare reimbursements for local hospitals. Why the reimbursement cuts? Medicare patients are ending up back in the hospital too soon. Penalties are imposed for patient re admissions within one month of initial discharge, and Central Florida hospitals are particularly hard hit with re admissions for heart attacks, heart failure, and pneumonia.
Penalties are starting small but will double each year for at least the next three years, which could put hospitals at further financial risk and provide incentives to educate patients and to make sure they are adherent to their recovery regimens after discharge.
Orlando Health, for example, is getting 0.92 cents of every Medicare dollar due to re-admission penalties, and Florida Hospital’s percentage is even higher. This may not seem like much, but these penalties add up to an estimated $4.47 million for Florida Hospital and $1.8 million for Orlando Health and these numbers are expected to grow.
How it works: The U.S. Centers for Medicare and Medicaid Services measures how many of each hospital’s patients admitted for heart attacks, heart failure and pneumonia end up back in the hospital within a month of leaving. Data is collected over a given period and plugged into a formula that determines the hospital’s penalty.
Nationwide 2,211 hospitals face losing $280 million. Hospitals are penalized even when a patient re admission within 1 month is unrelated to the first visit.
Orlando Health has been able to drop re admissions by 12 per cent, and expects the penalties to grow smaller in the coming years. They’ve increased the number of medical case managers, who make sure patients are educated, adherent, and learn how to navigate the health care system, increasing patient empowerment and self-sufficiency. This should lead to improved patient outcomes.