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Medicare has reduced payments to hospitals in the Fredericksburg area because their readmission rates are higher than average.
BY JIM HALL
Mary Washington Hospital is expected to lose $840,000 in Medicare payments this year because of the hospital's higher than average readmission rates.
The estimated loss equals 1 percent of what Medicare has paid Mary Washington in prior years for select services.
Mary Washington is one of seven hospitals in Virginia to receive the 1 percent reduction, the highest possible penalty under a new Medicare program.
Stafford Hospital and Spotsylvania Regional Medical Center also will be paid less by Medicare, though their readmission rates were better than Mary Washington's and their penalties were smaller.
Spotsylvania Regional is expected to lose $16,000 in Medicare reimbursements this year. Stafford Hospital will lose $11,300.
The cuts took effect Oct. 1 and will continue for one year. They apply to Medicare payments for inpatient services under its traditional fee-for-service program. The penalties will increase in future years if the readmission rates do not improve.
Mary Washington, Stafford and Spotsylvania Regional are among 2,211 hospitals in the United States penalized by the U.S. Centers for Medicare and Medicaid Services. Culpeper Regional, Fauquier Hospital and Sentara Potomac Hospital also were fined.
With these fines, Medicare is telling hospitals to focus on reducing the number of people who return to the hospital within 30 days of discharge.
The idea behind the order is that, with better planning, some readmissions can be prevented, thereby lowering costs and improving care.
The New England Journal of Medicine reported earlier this year that 20 percent of Medicare patients are rehospitalized within 30 days, at an annual cost of $17 billion.
The penalties mean that hospitals receive less money from one of their most important payers. Typically hospitals get about one-fourth of their revenue from Medicare, the federal health program for the elderly and disabled.
The penalties also represent a historic change in the way hospitals are paid, a shift from paying for procedures done to paying for quality care.
Until now, hospitals concentrated on caring for patients while they were in the hospital. Now they'll have to pay more attention to what happens after discharge.
"We have to make sure that the post-hospital care is exacting, appropriate and not left to chance," said Dr. J. Thomas Ryan, executive vice president and chief medical officer for Mary Washington Healthcare.
Beginning Oct. 1, Medicare has reduced payments to hospitals whose 30-day readmission rates are higher than average. The rates are calculated as a rolling three-year average, beginning with the period June 2008 to July 2011.
The reductions apply to inpatient care under Medicare's fee-for-service coverage. The program applies to patients hospitalized for pneumonia, heart attack and heart failure. However, the readmission can be for any reason and doesn't have to be at the same hospital.
The maximum fine is 1 percent this year. It will increase to 2 percent next year and 3 percent the year after.
The penalties are included in the Affordable Care Act, the 2010 health care reform legislation.