Safety-net hospitals suffer in all three big Medicare incentive programs

Penalties tend to be bigger than facilities that treat wealthier patients
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Hospitals that treated uninsured patients and were more of the provider safety net were significantly more likely to receive financial penalties for patient readmissions than hospitals that treat wealthier patients, a new study finds.

The American Association of Medical Colleges examined a cohort of 302 "major teaching hospitals" with the intent of determining the impacts of Medicare's Hospital Value-Based Purchasing Program (HVBP); the Hospital Readmissions Reduction Program (HRRP); and the Hospital-Acquired Condition Reduction Program (HACRP).

All three programs were up and running simultaneously for the first time during fiscal 2015. Sixty percent currently are financially dinged under the HVBP, 50 percent under the HACRP;and 90 percent under the HRRP, according to the study.

However, the hospitals that serve poorer patients are not only far more likely to receive penalties, but steeper ones as well, according to the study.

"For uncompensated care payments, hospitals in the bottom quartile received average payments that were double those of hospitals in the top quartile," the study's authors said. "Major teaching hospitals with the largest penalties also served 44.2 percent of disproportionate share patients compared with 32.8 percent of these patients for major teaching hospitals with the largest bonuses, which was statistically (significant)." 

Issues with the HRRP have already been raised by other studies, which strongly suggested that hospitals cannot control for issues such as a patient's income or level of cognitive function, both of which can factor into a readmission. However, other data have suggested that hospitals often discharge patients when it is most lucrative for them to do so, not when it clinically benefits patients.

The study suggested that more research is needed on the structure of the programs. "These results raise questions and concerns about the fairness of the program design and whether patient population characteristics are sufficiently adjusted for in quality measuring," the study said. 

To learn more:
- read the AAMC study (.pdf)

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