Medicare Penalties Taking Toll On Hospitals Across U.S.

According to a Modern Healthcare analysis of CMS data on penalties for fiscal year 2015, more than three dozen hospitals across the U.S. will be penalized more than 3% on most of their CMS reimbursements in 2015. 2015 is also the first year in which CMS’s three Medicare quality and safety incentive programs will be in effect. The penalties and rewards were calculated by combining the percentages for the three quality programs included in the Patient Protection and Affordable Care Act. Starting in 2015, hospitals can be penalized for excessive 30-day readmissions up to 3% of revenue from base operating diagnostic-related group payments by CMS. New in 2015 is also a 1% penalty on all Medicare revenue if a hospital falls into the bottom quartile in performance on hospital acquired conditions. Despite these issues, there are hundreds of hospitals getting it right by improving their performance. Additionally, nearly 800 hospitals will face either no penalties or will be earning rewards based on their performance in the value-based purchasing program. 

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