The Ankota Healthcare Delivery Management Blog

CMS Readmission Penalties for Dummies

Posted by Ken Accardi on Mar 13, 2014 11:45:00 AM

Have you ever seen those books that teach information "for Dummies"?  I just went to the official website (www.fordummies.com,) and these were the titles displayed on the home page:

Readmission Penalties for Dummies

I'm not so much a "for dummies" kind of guy.  Do we really need the book, "Reality Television for Dummies?"  What's to understand?  And even if you just arrived from another planet and wanted to understand reality TV, would you really read a book about it?  How about "Deleting Facebook Friends for Dummies?"   I'll admit that I don't know off the top of my head how to delete Facebook friends, but couldn't I just Google it?

CMS Readmissions Penalties Explained

Since we provide software for managing care transitions to help avoid readmissions, I thought that it would be great to do a blog article to explain the CMS Readmission Penalties.  So I went to the source on the Committee for Medicare and Medicaid Services (CMS) web site (click here to see it) and to be I honest that after a while, I wished that I could go buy the "for dummies" version.  

Here's what I've been able to find out, so far:

  • The penalties are in the form of "reduced Medicare payments" from CMS
  • In the first year the penalties can be up to 1% of payments
  • The program went into effect on October 1, 2012
  • Hospitals were measured on their readmission rates for three diseases:
    • Heart Attack (Acute Myocardial Infartion [AMI])
    • Congestive Heart Failure (CHF)
    • Pneumonia
  • The penalties for the 1st year were approximately $280M and over 2,000 hospitals received penalties (reference from Kaiser)
  • The second year of penalties are expected to be $227M (another reference from Kaiser)
  • Here's where it gets less clear:
    • There's a very nice article on the site of the Center for Healthcare Research and Transformation that says that the penalties go up to 2% in the second year and 3% in the third year, and that the disease states increase in the 3rd year to include Chronic Obstructive Pulmonary Disorder (COPD) coronary artery bypass graft (CABG), percutaneous transluminal coronary angioplasty (PTCA) and “other vascular” surgical procedures (reference from chrt.org)
    • If this is true, I don't understand why Kaiser predicts a drop in the penalties for year two?
    • The CMS site referenced above also talks about COPD but then lists elective total hip arthroplasty (THA) and total knee arthroplasty (TKA) as opposed to CABG and PTCA.
I'm committed to figuring this out and will correct this post when I get to the bottom of it.  If you can help me, please comment below!  Thanks!
Readmission Avoidance Software
Ankota provides software to improve the delivery of care outside the hospital, focusing on efficiency and care coordination. Ankota's primary focus is on Care Transitions for Reeadmisison avoidance and on management of Private Duty non-medical home care. To learn more, please visit www.ankota.com or contact Ankota.

Topics: Readmissions, Care Coordination, Care Transitions, Avoidable Readmissions

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About Ankota

Ankota provides software to improve the delivery of care outside the hospital, focusing on efficiency and care coordination. Ankota's primary focus is on Care Transitions for Reeadmisison avoidance and on management of Private Duty non-medical home care. To learn more, please visit www.ankota.com or contact Ankota.

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