A dozen Maine hospitals face Medicare penalties in round two of the federal government’s push to lower the number of patients who wind up back in the hospital within a month of being discharged.
Compared to other states, Maine’s hospitals ranked near the top, at seventh nationally by the amount of the average penalty.
Nationally, Medicare will impose $227 million in fines on 2,225 hospitals by reducing their payments for a year starting on Oct. 1, according to an analysis by Kaiser Health News. The analysis describes the penalty program, which launched in October 2012 under the Affordable Care Act, as among the toughest of Medicare’s efforts to pay hospitals for the quality of care they deliver rather than the number of patients they treat.
Nationally, the overall number of penalized hospitals remained about the same at two-thirds of eligible facilities. Hospitals that treated a high number of low-income patients were more likely to be penalized.
With nearly one in five Medicare patients returning to the hospital within a month of discharge, the federal government has set its sights on lowering readmissions to reduce costs and better coordinate patients’ care. The penalty program upends hospitals’ incentive for repeat visits; they get paid again when patients return for more treatment.
Medicare counts patients who originally went into the hospital with at least one of three diagnoses — heart attack, heart failure or pneumonia — and returned within 30 days for any reason, including complaints unrelated to the original visit. If the readmission was planned when the patient originally left the hospital, it didn’t count, a change from last year.
In Maine, no hospitals will face the maximum penalty of 2 percent — up from 1 percent in the first round — of every Medicare payment for a patient stay. Statewide, the penalties average 0.10 percent, significantly less than the national average of 0.38 percent.
Nancy Morris, communications director with the Maine Health Management Coalition, a Portland nonprofit made up of employers, hospitals and others working to improve the quality and value of health care, praised the government’s efforts to tie payments to the quality, rather than quantity, of patients’ care. The goal, she said, should be zero preventable readmissions.
“The more the hospital does to prevent these readmissions, the better value we’re getting — all of us,” Morris said. “The fact that the government is doing this is great, the fact that we are better than the average is great.”
Medicare evaluated 20 of Maine’s 39 hospitals. Twelve hospitals will be penalized and eight face no fines.
The rest of the state’s hospitals were left out under Medicare’s guidelines for the program, which exclude critical access hospitals, veterans hospitals and hospitals dedicated to psychiatric, rehabilitative and long-term care. Hospitals with fewer than 25 cases in each of three diagnoses are exempt from the penalties.
The new penalties are based on readmissions between July 2009 and June 2012.
In the first round of penalties announced last year, 10 Maine hospitals were penalized by Medicare. Maine ranked 11th nationally by the average penalty amount.
This time around, eight Maine hospitals faced a higher penalty and eight faced a lower penalty. Four of the state’s penalty-free hospitals — Inland Hospital in Waterville, Maine Medical Center in Portland, Miles Memorial Hospital in Damariscotta and Southern Maine Medical Center in Biddeford — also avoided fines in the first round.
In both rounds, Rockport’s Pen Bay Medical Center faced the highest penalties in the state. This time, however, the penalty dropped to 0.3 percent from 0.65 percent, giving Pen Bay the most improved showing statewide.
Financially, the difference is minimal. The penalty amounts to about $6,000 less than the estimated $71,000 penalty Pen Bay paid in the first round.
But the hospital’s chief medical officer said he was pleased with what the lower penalty reflects about Pen Bay’s medical care.
Dr. David Bachman, who began work at Pen Bay in October, said the hospital has strived to better coordinate care, particularly for patients admitted for heart failure.
While hospitals are held responsible for readmissions, the care patients receive after leaving greatly determines whether they land back in a hospital bed, Bachman said. So Pen Bay has aligned primary care doctors, cardiologists, home health aides and skilled nursing facilities in its effort to cut down on readmissions. Doctors make sure patients have a follow-up visit soon after discharge, and patients are educated about their role in staying healthy, he added.
Bachman, who also serves as senior medical director for transitions of care at Pen Bay’s parent organization MaineHealth, said penalties drive the health system’s work only to an extent.
“The penalties give you a tool to guide your work and get some people’s attention, but we really feel like it’s our responsibility to make sure that when the patients leave the hospital, they are getting the right local care, that we are following up in a timely manner, that we’re doing everything we can for the patient,” he said.
The nation’s hospital industry has criticized the penalties, arguing that hospitals shouldn’t be punished when patients’ health deteriorates after they leave and lamenting that medical centers serving the poor are disproportionately penalized.
The maximum penalty will increase to three percent next year.