The Centers for Medicare & Medicaid Services’ new policy that penalizes hospitals for excessive readmissions will have an unexpected consequence: Two-thirds of U.S. hospitals will receive penalties averaging $125,000, according to the Medicare Payment Advisory Commission (MedPAC). The commission has been discussing refining the hospital readmissions reduction program.

Hospitals now face up to a 1% penalty for readmissions related to acute myocardial infarction, heart failure, and pneumonia starting last October. In 2014, the penalty will rise to 2% and to 3% in 2015, with four conditions added to the list.

Two Harvard research physicians, Karen E. Joynt, MD, MPH, and Ashish K. Jha, MD, MPH, published a commentary this month in the New England Journal of Medicine, which includes several suggestions to avoid punishing hospitals for factors outside of their control, including:

Adjusting readmission rates for socioeconomic status (eg, adding patients’ eligibility for Supplemental Security Income to risk-adjustment models). Such adjustments would ensure whether safety-net hospitals are achieving readmission rates for poor patients comparable to those that are not safety-net facilities.

Penalties should be weighted according to the timing of readmissions, counting readmissions within a few days more heavily than those occurring 4 weeks later. Later admissions are more likely to be attributable to disease severity than to lack of care coordination.

Give hospitals credit for low mortality rates, since they often have higher readmission rates despite being high-performing facilities. Hospitals with high mortality rates but low readmission rates do better under the CMS payment scheme than do low-mortality hospitals with high admission rates, the authors note. They suggest CMS could combine the two outcomes by assessing patients’ 30-day “days alive and out of hospital.”

The researchers conclude, “No policy is ever perfectly designed at inception, and policies should be changed as new evidence emerges. The latest evidence suggests that the readmissions-reduction program has potential: it can change the hospital business model by asking institutions to become increasingly accountable for what happens to their patients beyond their walls.”

Physician’s Weekly wants to know…what suggestions do you have regarding the CMS policy?