Medicare penalizing 62 Indiana hospitals for high readmission rates

Dozens of Indiana hospitals are facing penalties for allowing too many patients to return within a month of their discharge.

The penalties, levied under the Affordable Care Act, are designed to encourage hospitals to help patients stay well after they are discharged, by giving them detailed instructions for home health care and recovery.

The federal government says readmissions are often unnecessary and cost taxpayers tens of millions of dollars a year. Medicare says the problems should have been caught and corrected during the patients' initial stays in hospitals, or that hospitals should have checked in with discharged patients to make sure they were properly taking their medications and visiting their doctors.

Starting in October, the federal government will cut those hospitals’ Medicare payments by as much as 3 percent for a year. It’s the sixth year the government has penalized hospitals with high readmission rates.

Across Indiana, 62 hospitals from Michigan City to Jeffersonville are facing penalties that are likely to total millions of dollars. They include every major hospital system and an assortment of small community hospitals.

The government did not itemize how much each hospital stands to lose, but did list the percentage reduction assessed to each hospital.

At the top of the list is St. Vincent Anderson Regional Hospital, which will be penalized 2.83 percent of Medicare reimbursements. Others in the top five are King’s Daughters’ Health in Madison (penalty of 2.19 percent), St. Mary Medical Center in Hobart (2.01 percent), Methodist Hospital in Gary (2.09 percent), and St. Vincent Hospital in Evansville (1.76 percent).

To see the whole list, click here and scroll down to "Medicare Readmissions Penalties by Hospitals."

Indiana ranked 31st among states for average hospital Medicare penalties for readmissions.

Many hospitals say they work hard to reduce readmissions, calling patients within five days after discharge to check on their conditions; making follow-up appointments with a primary care physician before a patient leaves the hospital; and making sure patients and their families have transportation and understand their medications.

Nationally, Medicare is docking 2,573 hospitals, according to a report released last week. That’s 24 fewer than a year ago, according to Kaiser Health News.

That can be an expensive ding, as many hospitals count on Medicare for one-quarter to one-half of all patient revenue. A hospital that gets $10 million a year from Medicare would stand to lose $200,000, based on a 2 percent reduction penalty.

This year, the average penalty will be 0.73 percent of each payment Medicare makes for a patient between Oct. 1 and Sept. 30, 2018, according to a Kaiser Health News analysis.

Medicare determined the penalties based on the same six types of patients as in past years: those admitted for heart attacks, heart failure, pneumonia, chronic lung disease, hip or knee replacements, or coronary artery bypass graft surgery.

More than 1,500 hospitals nationally were exempt, including 35 in Indiana, as required by law. That includes hospitals treating veterans, children and psychiatric patients. Critical access hospitals, which Medicare pays differently because they are the only hospitals in their area, were excluded.