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MedPAC Presses for Change in Hospital Readmission Penalty

By Kerry Young, CQ Roll Call

June 1, 2016 -- An independent panel that advises Congress is pushing for an alteration in how penalties are assessed on hospitals for excessive readmission rates. The commission wants to prevent continued shaving of reimbursements if the overall quality of hospital care improves.

The Medicare Payment Advisory Commission (MedPAC) wants to adjust the overall readmission penalties such that they could decline if hospitals' collective performance improves. The influential panel previously raised this idea in a June 2013 report, and repeated it in a comment letter made public on Tuesday. MedPAC suggested that members of Congress pass legislation to allow the Centers for Medicare and Medicaid Services (CMS) to use an all-condition readmission measure with a fixed target. 

MedPAC said it strongly supports the hospital readmission penalty program, which was created by the 2010 health overhaul. The penalty was designed to give hospital officials and staff added incentives to consider what would happen to their patients after their discharges. Patients who are readmitted for certain conditions within 30 days can trigger a readmission penalty of 3 percent of hospitals' Medicare payments.

The program "has been a success as hospitals have worked to improve care transitions which has helped to lower hospital readmission rates," wrote Francis J. Crosson, MedPAC's chairman, in comments to CMS on the proposed fiscal 2017 rule for payments for hospitals' inpatient services. 

CMS is accepting comments through June 17 on the payment rule.

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