What Do Hospital Readmission Penalties Look Like In FY2015 For Colorado?

By Katie Lewandowski, MPH, Project Director at the Colorado Hospital Association

On Oct. 1, 2014, the Centers for Medicare & Medicaid Services (CMS) announced the Medicare readmissions penalties for fiscal year (FY) 2015 for the Hospital Readmission Reduction Program (HRRP). CMS estimates it will levy $428 million in fines against 2,610 hospitals throughout the country, including 27Colorado hospitals. The maximum penalty increased this year to 3 percent—up a full percent from last year. The average penalty statewide is 0.33 percent, up from 0.14 last year. In terms of dollars withheld due to penalties, Colorado went from $214,500 for (FY) 2014 to $1,854,100 in (FY) 2015. Several hospitals experienced a slight increase in their readmissions penalty rate. This is likely because CMS added add chronic obstructive pulmonary disease and total hip and knee replacement as new conditions for the penalty assessment in addition to heart attack, heart failure and pneumonia readmissions. Hospital penalties are available for download here.

According to CMS, chronic obstructive pulmonary disease was added to the HRRP because it is a common, debilitating condition and a leading cause of readmission and death. Total hip replacement and total knee replacement measures were added because they are common elective procedures that improve a patient’s quality of life, but can also lead to significant complications. All of the HRRP measures assess all-cause, unplanned readmissions that occur within 30 days of discharge from the index readmission. Readmissions to any applicable hospital are counted, regardless of the principal diagnosis, because, from a patient perspective, readmission from any cause is an adverse event1.

Focusing on ways to improve transitions of care and implementing care coordination to reduce a readmission will become more important in years to come. We will most likely see more diagnoses added to the HRRP. Such possibilities could be stroke and additional surgical procedures, though these diagnoses have not been confirmed by CMS. Furthermore, the Medicare Payment Advisory Committee (MEDPAC) indicated that nearly 14 percent of individuals on Medicare discharged from a hospital to a skilled nursing setting are readmitted to the hospital for conditions that could potentially have been avoided2. Budget proposals recommend reducing payments for skilled nursing facilities that are determined to have high rates of preventable hospital readmissions3.

Ultimately, the main goal for hospitals is to provide improved care coordination for patients. This is the same goal of all care providers. Regardless of Medicare penalties, strengthening our ties between all types of providers will improve care for patients. Campaigns like Healthy Transitions Colorado help build partnerships for improvement that will serve all stakeholders to provide better coordinated care for patients. By including a wide net of care providers, learning from each other’s successes and failures and showcasing improvements, we can work together to provide improved care coordination and improve readmission rates in the state of Colorado.

1. Quality Net (2014). Overview Readmission Measures. [web log post] Retrieved December 4, 2014 fromhttps://www.qualitynet.org/dcs/ContentServer?cid=1219069855273&pagename=QnetPublic%2FPage%2FQnetTier3&c=Page
2-3. Assisted Living Federation of America (2014). Nursing Homes May Face Readmission Penalties Similar to Hospitals. [web log post]. Retrieved December 4, 2014 from http://www.alfa.org/News/3102/Nursing-Homes-May-Face-Readmission-Penalties-Similar-to-Hospitals