Medicare rule would decrease payments to hospitals with high re-admission rates

By Jordan Rau, Published: July 30

When hospitals discharge patients, they typically see their job as done. But soon they could be on the hook for what happens after Medicare patients leave the premises, and particularly if they are re-admitted within a month.

In an effort to save money and improve care, Medicare, the federal program for the elderly and disabled, is about to release a final rule aimed at getting hospitals to pay more attention to patients after discharge.

A key component of the new approach is to cut back payments to hospitals where high numbers of patients are re-admitted, prodding hospitals to make sure patients see their doctors and fill their prescriptions.

Medicare also wants to pay less to hospitals with higher-than-average costs for patient care. It has proposed calculating the costs by combining a patient’s hospital expenses with fees incurred up to 90 days after discharge.

The efforts, called for in last year’s health-care law, are part of a push to make hospitals the hub for coordinating care. Hospital care is the largest chunk of Medicare spending; Medicare says re-admissions alone cost $26 billion a decade. Plus, many experts argue that hospitals are the most organized actors in a splintered and often dysfunctional health system and thus best able to take the lead in overseeing patient care.

Hospitals’ objections

Hospital groups complain that Medicare’s plans could punish them for things they cannot control, such as unavoidable re-admissions and patients who cannot afford the costs of prescriptions.

“A lot of this is very unfair,â€