Major Medicare penalty set to hit 2,600 U.S. hospitals – will disproportionately affect sickest patients

By Jennifer Popik, J.D., Powell Center for Medical Ethics

readmission3When the Obama Health Care Plan became law in 2010, one of the first provisions that went into effect authorized the federal Department of Health and Human Services to impose so-called “quality measures” on health care providers. One of these targeted were hospital “readmissions” – instances in which a patient with a particular illness or injury admitted, treated, and discharged must later be re-admitted because of a recurrence or complications.

The theory was, essentially, that the health care provider should get it right the first time, and that a readmission is assumed to be the fault of the provider’s failure to provide appropriate care during the first admission.

Implementation of disincentives for readmission has hit health care providers hard. “For the fiscal year starting Oct. 1, more than 2,600 hospitals will lose a combined total of $420 million, according to a spokesman for the Centers for Medicare and Medicaid Services,” according to a September 14, 2015 Washington Post article by Lena H. Sun entitled, “Medicare unfairly penalizes hospitals treating sickest, poorest patients, study finds.”

A new study in The Journal of the American Medical Association shows that the hospitals slated for these massive cuts are the least equipped to handle the loss in compensation. According to the Washington Post,

For the last four years, Medicare has wielded a big stick: It has fined hospitals if too many of their patients returned to any hospital within weeks of being released. But many safety-net hospitals, including academic teaching hospitals, say this is unfair because they take care of sicker, poorer patients. Now data released Monday shows they may be right.

The researchers found:

Hospitals serving healthier, more socially advantaged patients may not have to devote any resources to achieving a penalty-free readmission rate, whereas hospitals serving sicker, more socially disadvantaged patients may have to devote considerable resources to avoid a penalty. By selectively increasing costs or lowering revenue for hospitals serving patients at greater risk of readmission, the HRRP [Hospital Readmissions Reduction Program] therefore threatens to deplete hospital resources available to improve overall quality for populations at high risk of poor outcomes.

While the term “quality” certainly sounds like a positive way to enhance health care, the “quality measures” Obamacare gives HHS to power to impose on health care providers can, in effect, be used to limit the healthcare Americans receive .

Under the language of the law, the term “quality measures” is a euphemism for preventing treatment that the government feels drives up cost too much – no matter what the patient need.

In a separate September 14, 2015, article published in Vox, “Obamacare punishes hospitals that see poor patients, study finds,” Sarah Kliff writes,

All told, the new Harvard study estimates that about half of the difference in readmission rates can be explained away by patient population characteristics. And that means some of the hospitals could be getting penalized more simply for seeing vulnerable populations.

“The clear implication is this penalty exacerbates the financial strain they’re under,” says J. Michael McWilliams, an associate professor at Harvard Medical School. “One would worry this would translate into worse-quality care.”

The judgment whether or not the “quality” is good will essentially only be about providing health care in the cheapest way possible. As in other government reimbursement models, the outcomes–meaning how well people recover function–is secondary.

This means that a course of treatment a doctor and patient deem advisable to save that patient’s life or preserve or improve the patient’s health–but which would trigger the penalty – is less likely to be provided.

Documentation on Obamacare’s rationing provisions in general can be found here.

It is more important now than ever to keep this debate alive and elect a pro-repeal Congress and President in 2016.