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 Two-Thirds Of Hospitals To See Cuts From Excessive Readmissions

Nearly two-thirds of American hospitals will see their Medicare funding cut in fiscal 2013 because their readmission rates are too high, the Centers for Medicare & Medicaid Services (CMS) has decided.

Under the Affordable Care Act, hospitals can have their funding trimmed for excessive readmissions. More than 2,200 hospitals will lose funding beginning in October, CMS said in thousands of letters that began going to out to hospitals last week. Some 481 hospitals will face the maximum penalty of a 1 percent cut of their base Medicare funding, an American Medical Association (AMA) analysis found.

CMS expects to withhold about $280 million in payments under the new readmission rules. That’s a 0.3 percent decrease for fiscal 2013, AMA’s analysis found.

Hospitals in New Jersey, New York, the District of Columbia, Arkansas, Kentucky, Mississippi, Illinois, and Massachusetts will suffer the most, according to an analysis by Kaiser Health Network.

Many doctors and hospital executives protest the new readmission rules because they say that they unfairly punish hospitals for circumstances beyond their control.

But long term care advocates see the rules as an opportunity to become active partners with hospitals--and to lower both readmissions and health care costs.

“Since day one, I have believed and said that our sector is the cost-quality solution to many of the pressing health challenges out there,” says Gov. Mark Parkinson, president and chief executive officer of the American Health Care Association and National Center for Assisted Living. “With CMS’ actions last week, our members have yet another opportunity to help reduce readmissions. Hospitals have a ready and willing partner who can help them. We’re up to the challenge.”

CMS’ rules on readmission and their impact can be found here.

Kaiser’s list of affected hospitals, can be found here.

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