Medicare Will Charge $265,000 Penalties

SHEPHERDSTOWN, W. Va., Aug. 14, 2013 /PRNewswire-iReach/ -- Medicare will charge hospitals $265,000 for each excess readmission after knee or hip replacement surgery. Half of all hospitals have above-average numbers of Medicare patients who come back within 30 days after a knee or hip replacement. These hospitals will pay $265,000 for each returning patient above the US average.

There will also be new $32,000 penalties for above-average readmissions after emphysema and chronic bronchitis (COPD) treatment. Hospitals already pay $35,000 to $55,000 penalties for any readmission above the US average for heart attacks, heart failure and pneumonia.

Hospitals cannot afford these penalties, so they need to prevent as many readmissions as possible. If hospitals cannot reduce them by better care, they can reduce them by treating fewer seniors.

The American College of Surgeons has warned about "the potential that these hospitals will decrease their care for such patients, thereby creating an access issue" (letter to Medicare 6/14/13). It is easy to tell patients with any risk of readmission, "You are not a good candidate for treatment," leaving patients to deteriorate.

Congress' Medical Payment Advisory Commission, MedPAC, recommends "hospice use and the presence of advance directives" to reduce rehospitalizations (p. 195). If doctors can talk patients into hospice, they are less likely to come back, even if they would benefit from treatment.

Four research studies have shown that lower readmission rates mean higher death rates.

Medicare knows their penalties can lead to more sickness and death, "We are committed to monitoring … increased patient morbidity and mortality" (pp. 655-656 of 2014 rules, and p. 53376 of 2013 rules). Yet they are waiting a year before analyzing "increased mortality." Most health studies monitor deaths and stop the experiment if death rates rise. Medicare does not.

Hospitals will start paying in October 2014, based on COPD, knee and hip replacements since July 2010. Medicare announced approval of the new penalties, though not the amounts, on its website, and they will be officially published in the Federal Register August 19. Hospitals have paid penalties for the other treatments since October 2012.

MedPAC explained in June that penalties are the initial payment times "1/ national readmission rate" (p. 99). The national readmission rate for knee and hip replacements is 5.7 percent; one over it is 18; this factor times the average initial Medicare payment of $15,000, is $265,000.

The calculations are done by, a watchdog site, which also has more information and penalties for each hospital.

Media Contact: Paul Burke,, 304-876-2227,

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