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New program targets patient readmissions, seeks Medicare savings

One central component of the Obama administration's Affordable Care Act focuses on Medicare cost savings, with new law now mandating that hospitals across the country with particularly high patient readmission rates will be financially penalized as motivation for them to perform better.

The idea is cost savings for Medicare expenditures that now cost scores of billions each year. It doesn't matter what the readmission is for -- whether for negligent treatment of infection, lack of adequate follow-up care, post-surgical complications or any other reason -- as long as it occurs within 30 days of hospital release. If it does, the government is noting it, and medical facilities with a comparatively high number of readmissions will face fines that are meant to sting and bring about remedial actions.

About two thirds of all hospitals across the country are expected to be penalized going forward, many of them for perceived laxity in care related to heart attacks, heart failure and pneumonia. The average penalty is around $125,000.

Unsurprisingly, many hospital administrators and doctors are not enamored of the program. Among their complaints is an argument that not every readmission owes to hospital negligence or a medical malpractice act. Some, they say, are virtually guaranteed owing simply to a patient's aged status and frail condition. Others, they note, occur in rural areas, where discharged patients live far from hospitals and clinics and hard to keep track of.

Officials from the U.S. Centers for Medicare and Medicaid Services are not particularly sympathetic with any claims or excuses. They believe that the exactions will spur improved medical care across the medical system in both individual facilities and overall. They believe that the fines will likely result in about $8 billion in savings over the program's first six years.

Source: Bloomberg, "Boomerang patients to penalize hospitals under U.S. law," Stephanie Armour, Feb. 11, 2013

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