More than 2,000 Hospitals, Including 131 in Florida, will be Penalized by Medicare for Excess Readmissions

Monday, August 20, 2012

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Lower Medicare reimbursement rates are coming in October of 2012, to 2,211 hospitals around the country, including 131 in Florida. This is allegedly due to excessive readmission rates in these hospitals between July 2008 and June 2011, according to the Centers for Medicare and Medicaid Services (CMS). This story was originally reported by Kaiser Health News on August 13, 2012, and by other sources.

To read more on the readmissions reduction program, click here.

Millions of Dollars in Medicare Payments will be Forfeited by Hospitals Over the Next Year.

Starting October 1, 2012, penalties will be deducted from Medicare reimbursements each time a hospital submits a claim.

All together these hospitals will give up about $280 million in Medicare funds over the next year as the government begins a push to start paying health care providers based on the quality provided, according to the Kaiser Health News article. The government apparently considers readmissions a prime symptom of an overly expensive and uncoordinated health system.

The CMS records show nine hospitals in Florida, including Florida Hospital in Orlando, will deal with a one percent (1%) decrease caused by the penalties.

To see the 2013 Medicare readmissions penalties in Florida, click here.

Medicare Attempting to Lower Readmission Rates.

According to the CMS nearly two million Medicare beneficiaries return to the hospital within a month of being discharged, costing Medicare $17.5 billion in additional hospital bills. CMS states the national average readmission rate is slightly above nineteen percent (19%).

Who is Going to Be Hit the Hardest?

The penalties will fall heaviest on hospitals in New Jersey, New York, the District of Columbia, Arkansas, Kentucky, Mississippi, Illinois, and Massachusetts. Hospitals that treat mostly low-income patients will be hit particularly hard as well. This is all according to the report by Kaiser Heath News.

The analysis of the penalties shows seventy-six percent (76%) of the hospitals that have a majority of low-income patients will lose Medicare funds.

Hospitals That are Not Getting Penalized.

The CMS report found 1,156 hospitals with acceptable readmission rates. Those hospitals will not lose any money. The analysis showed, on average, the readmission penalties were lightest on hospitals in Utah, South Dakota, Vermont, Wyoming and New Mexico. Idaho was the only state where no hospital was penalized by Medicare.

Expect More Penalties Next Year.

The CMS notes the maximum penalty will increase to two percent (2%) starting in October 2013, and then to three percent (3%) the following year.

These penalties are part of an effort by Medicare to use its financial backbone to force improvements in hospital quality.

On top of the readmission reduction program, on August 27, 2012, the CMS will begin the Recovery Audit Prepayment Review (RAPR), in which Recovery Audit Contractors (RACs) will review a number of hospitalsMedicare claims.

I previous wrote about the RAPR, click here to read that post.

Contact Health Law Attorneys Experienced in Handling Medicare Audits.
The Health Law Firm's attorneys routinely represent physicians, medical groups, clinics, pharmacies, durable medical equipment (DME) suppliers, home health agencies, nursing homes and other healthcare providers in Medicare investigations, audits and recovery actions.
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Rua, Jordan. “Medicare To Penalize 2,211 Hospitals For Excess Readmissions.” Kaiser Health News. (August 13, 2012). From:

Kaiser Health News. “First Hospital Penalties for High Readmissions Detailed.” Kaiser Health News. (August 13, 2012). From:

Health News Florida. “Readmit Rates Cost FL Hospitals.” Health News Florida. (August 13, 2012). From:

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

Tag Words: Medicare reimbursement, Medicare overpayment, Medicare fraud, Medicare, false billing,  Medicare audit, Medicare investigation, health care fraud, Medicare fraud attorney, defense attorney, Centers for Medicare & Medicaid Services (CMS), audit defense attorney, legal defense lawyer

"The Health Law Firm" is a registered fictitious business name of George F. Indest III, P.A. - The Health Law Firm, a Florida professional service corporation, since 1999.
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Response to: More than 2,000 Hospitals, Including 131 in Florida, will be Penalized by Medicare for Excess Readmissions
Wednesday, September 5, 2012
Wesley says:

Informative articles can make for long drawn out reandig, but you have made yours interesting. This is very good informational content with many great points of interest. I like it. Keep up the great writing.

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