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Posted on Tue, Dec 11, 2012 : 1:53 p.m.

Hospitals penalized for readmission rates with cut in Medicare reimbursements

By Amy Biolchini

Editor's note: This story was edited at 4:50 p.m. for clarification.

Under provisions in the Patient Protection and Affordable Care Act, a number of hospitals including those in the University of Michigan Health System will be receiving less Medicare funding because of their readmission rates, according to a report by Crain’s Detroit Business.

Large urban teaching hospitals like Henry Ford Hospital in Detroit and UMHS often find it difficult to reduce their readmission rates because they often serve as regional referral centers for larger numbers of sick patients, Crain’s reported.

Starting Oct. 1 about 2,217 hospitals across the country will experience a cut in their Medicare reimbursements when patients were readmitted within 30 days of being discharged at a rate that exceeded the national average for congestive heart failure, heart attack and pneumonia.

A number of hospitals in southeast Michigan received a full 1 percent cut in their Medicare reimbursements on October.

UMHS will likely see a 0.68 percent decline in its Medicare reimbursements, according to the report.

Last week, top administrators at UMHS emailed their entire staff about the need to cut costs because of the health system's growing operational deficit.

Amy Biolchini covers Washtenaw County, health and environmental issues for Reach her at (734) 623-2552, or on Twitter.



Wed, Dec 12, 2012 : 1:51 p.m.

A few years ago I was released from hospital and sent to a convalesant care center even though I had a slight fever. Sent by ambulance to the center only to be sent back to hospital emergency 2 days later in extreme critical condition. Where they drained 2 liters of fluid off of my chest cavity. There I stayed for another 3 weeks. I feel that if they had left me there a few more days to start with I would have been better off if they had kept me longer the first time around.And would have saved 2 ambulance rides as well.


Wed, Dec 12, 2012 : 3:06 a.m.

I wonder how many of these re admissions could have been seen by their reg. Doc. When I have called my doctor I have been told that we can't see you for 5 days.. Go to the hospital. If they had been in the hospital, maybe a visit with a primary care doc.. might have erased the need to go back to the hospital. I personally think they let people out of the hospital to fast.. expecting them to be able to be compliant taking their medicines, and any therapies they need to be using.


Wed, Dec 12, 2012 : 3:40 a.m.

You are correct primary care doc' s treat most thing better and cheaper. One area of work is communication and transitioning patients from hospital to their out patient docs.


Wed, Dec 12, 2012 : 2:38 a.m.

1 Bit Medicare does not pay for readmission for the same diagnosis within 30 days so your crank the mill theory is wrong. Medicare is using the readmission rate as a quality marker i.e did you treat the patient correctly and the theory is that if the patient is readmitted then you did not do a good job. I content that this is not necessarily true. Just some academics theory. Further the study I mentioned about not paying for catheter related urinary tract infections showed that the intervention of not paying for them did not decrease the incidence of these events happening. Medicare is decreasing their global payment i.e payment to UM for everything .68% based on the flawed idea that readmission rate reflect poor quality. Never been proved just someone's idea. They looked at readmission rate for key diagnosis such as heart failure because those patients bounce back a lot because they are very sick and at a high risk of dying. Because they are very sick society spends a disproportional amount of health care dollars on people with that diagnosis. Medicare is trying to save money on this high utilization population. I think they are going about it in the wrong way. Hospitals invested lots of resources in post discharge care for congestive heart failure patients. It made a small dent in the readmission rate but cost the institutions more than they saved . Sometimes the best treatment is a frank but compassionate discussion of risks and prognosis.

Craig Lounsbury

Tue, Dec 11, 2012 : 10:49 p.m.

In an ironic twist 60 minutes did a report a couple weeks ago suggesting that some big hospital system was forcing doctors to admit people on a quota system, rather than on need, so they could bill the Government. Maybe if hospitals didn't scam the system medicare wouldn't be so hard pressed for the needed funds.


Tue, Dec 11, 2012 : 9:30 p.m.

Oh how the system works against itself. Hospitals get disciplined if they don't discharge patients within a certain amount of time following a procedure. if you are in for a double bypass they need you out by a certain day following surgery or they take a hit. That is a big facto in the readmission rates.

Kara Gavin

Tue, Dec 11, 2012 : 8:18 p.m.

UMHS faculty and staff are working hard to reduce inappropriate readmissions. See for example this report about an effort that has been published in a national journal: . Kara Gavin UMHS Public Relations


Tue, Dec 11, 2012 : 8:05 p.m.

You need to fix the "start date".

Amy Biolchini

Tue, Dec 11, 2012 : 9:50 p.m.

Ah! Thanks for the clarification. I'll remove the comma to make it more clear. The intention was to indicate the start date is Oct. 1 of this year.


Tue, Dec 11, 2012 : 9:21 p.m.

no, the extra comma in there makes it hard to read: Starting Oct. 1, 2,217 So, does the program take effect on the first of October in the year 2217?

Amy Biolchini

Tue, Dec 11, 2012 : 8:21 p.m.

Are you referring to Oct. 1?

David Cahill

Tue, Dec 11, 2012 : 7:19 p.m.

Good! Reducing readmissions (which means improving aftercare the first time around) is an important feature of Obamacare.


Sun, Feb 10, 2013 : 9:05 p.m.

@1bit, very, very true.


Wed, Dec 12, 2012 : 2:04 a.m.

Mark - how would you know? The expected outcome of pneumonia treated in a hospital is not death. Medicare likely pays U of M for a pneumonia admission based on a DRG. U of M may be discharging patients prematurely, thus leading to the readmission. Or, the patient had a complication from the hospitalization, which then led to a readmission. Not saying I'm a fan of this new plan, but hospitals have been gaming the system for years by discharging patients who are still ill so they receive their full DRG reimbursement and then charging again when the patient is readmitted.

Get over it

Tue, Dec 11, 2012 : 10:29 p.m.

Good luck at getting in when you don't have a apt.(see you in 30 days)


Tue, Dec 11, 2012 : 9:48 p.m.

David flawed thinking. The patients that were readmitted were the sickest of the sick. They actually got great care and instead of dying from there disease which was the expected outcome they lived long enough to get re-admitted. Recent medicare trial program with holding payment for catheter related urinary tract infections showed no difference in outcomes. In other words not paying hospitals for that particular complication did not lower that complication rate.