New Jersey leads the nation for having the most hospitalized penalized, according to an analysis by Kaiser Health News based on information from the U.S. Centers for Medicare and Medicaid Services.
With penalties widespread not only in the state but the nation, the leaders of a consumer advocacy group and the hospital lobbying association agreed it may be time for the federal government to develop a fairer measure of success.
"I am never an apologist for poor quality, but the readmissions penalties have been trouble from the start," said David Knowlton, president and CEO of the New Jersey Health Care Quality Institute, the consumer watchdog and research organization. "When 97 percent (of hospitals) get dinged, you gotta say what's going on?"
A total of 63 hospitals and hospital networks in the state will forfeit an average 0.73 percent on every reimbursement beginning in October, according to the analysis.
That's more than the national average of .61 percent per reimbursement. The penalty could have been as high as 3 percent, and only Palisades Medical Center in North Bergen came close, with a 2.49 percent penalty per reimbursement, according to the analysis. Bergen Regional Medical Center in Paramus, specializing in long-term care, mental health and substance abuse, was not assessed a penalty.
These 63 hospitals represent 97 percent of all New Jersey hospitals - the largest number of penalized hospitals in any other state or the District of Columbia, according to Kaiser, an independent, nonpartisan health news service.
The fines were added as part of the Affordable Care Act to encourage outpatient care and preventive medicine.
Though some readmissions cannot be avoided, many public health experts say a chronically high rate points to poor planning and follow-up care after a patient leaves the hospital. The result: sicker patients and higher health care costs.
The fines are based on readmissions between July 2011 and June 2014 and include Medicare patients who were originally hospitalized for one of five conditions: heart attack, heart failure, pneumonia, chronic lung problems or elective hip or knee replacements. For each hospital, Medicare determined what it thought the appropriate number of readmissions should be based on the mix of patients and how the hospital industry performed overall. If the number of readmissions was above that projection, Medicare fined the hospital.
Most hospitals that will escape penalties did not do so because they performed better, Kaiser found. They were exempt because they specialized in certain types of patients, such as veterans or children, because they were specially designated "critical access" hospitals, or because they had too few cases for Medicare to accurately assess.
Knowlton has asked Medicare officials to consider giving hospitals a break if they treat a significant number of patients who are poor. Low-income people are the least likely to go to a doctor, either because they don't have one or don't have reliable transportation to get there. They are more likely to go to the emergency room or call 911, he said.
There are better measures of quality, such as Leapfrog patient safety report," said Knowlton, referring to a national tool that looks at more than two dozen measures of patient quality. In Leapfrog's most recent report, New Jersey hospitals ranked fifth in the nation for successfully preventing errors.
Betsy Ryan, president and CEO of the New Jersey Hospital Association, agreed.
"NJHA and its member hospitals have been focused on reducing the rates of avoidable readmissions thought the work of our Quality Institute," Ryan said. "However, the current law doesn't adjust for the socioeconomic conditions found in a racially diverse state like New Jersey."
In regulations released Friday, the federal government declined to make that adjustment, noting that some safety-net hospitals have been able to keep their readmission rates low.
"While we appreciate these comments and the importance of the role that sociodemographic status plays in the care of patients," CMS wrote in the rule, "we continue to have concerns about holding hospitals to different standards for the outcomes of their patients of low sociodemographic status because we do not want to mask potential disparities or minimize incentives to improve the outcomes of disadvantaged populations."