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L.A. County Hospitals Hit With Hefty Medicare Penalties for High Readmission Rates

Staff Report

April 15, 2022~Under programs set up by the Affordable Care Act, the federal government cuts payments to hospitals that have high rates of readmissions.

Hospital readmission is defined as patient admission to a hospital within 30 days after being discharged from an earlier hospital stay.

Since 2012, Medicare has punished hospitals for having too many patients end up back in their care within a month. The government estimates the hospital industry lost $566 million in 2018.

The penalties are a signature part of the Affordable Care Act’s effort to encourage better care.

In 2018, lawmakers mandated that Medicare take into account a long-standing complaint from safety-net hospitals. They argued their patients are more likely to suffer complications after leaving the hospital through no fault of the institutions, but rather because they cannot afford medications or don’t have regular doctors.

The Medicare sanctions have been especially painful for this class of hospitals, which often struggle to stay afloat because so many of their patients carry low-paying insurance or none at all.

Over 2,200 hospitals are exempt from the program because they specialize in children, psychiatric patients or veterans. Rehabilitation and long-term care hospitals are also excluded from the program, as are critical access hospitals, which are treated differently because they are the only inpatient facility in an area.

Medicare docked payments to 2,521 hospitals — more than half in the nation— in 2021. The average penalty 0.7 percent of each payment.

The fines can be heavy, averaging $217,000 for a hospital, according to Congress’ Medicare Payment Advisory Commission, or MedPAC.

Medicare estimates the penalties over the next fiscal year will save the government $521 million. Thirty-nine hospitals received the maximum 3% reduction, and 547 hospitals had so few returning patients that they escaped any penalty.

2021 penalties over 1% include Los Alamitos Medical Center; Rancho Los Amigos in Downey; PIH Hospital in Downey and PIH Health Hospital in Whittier.

Sorted by amount of penalty:

HospitalCityPenalty
Los Alamitos Medical CenterLos Alamitos1.01
Palmdale Regional Medical CenterPalmdale1.06
Emanate Health Inter-Community HospitalCovina1.11
Riverside Community HospitalRiverside1.11
Hemet Global Medical CenterHemet1.12
Olympia Medical CenterLos Angeles1.16
Rancho Los Amigos National Rehabilitation  CtrDowney1.18
Torrance Memorial Medical CenterTorrance1.21
USC Verdugo Hills HospitalGlendale1.32
PIH Hospital – DowneyDowney1.33
Temecula Valley HospitalTemecula1.4
Loma Linda University Medical Center-MurrietaMurrieta1.43
Providence Little Company Of Mary Med Ctr TorranceTorrance1.47
Centinela Hospital Medical CenterInglewood1.48
PIH Health Hospital-WhittierWhittier1.58
Hollywood Presbyterian Medical CenterLos Angeles1.61
Parkview Community Hospital Medical CenterRiverside1.61
Desert Valley HospitalVictorville1.76
Sherman Oaks HospitalSherman Oaks1.94
San Dimas Community HospitalSan Dimas1.97
Chapman Global Medical CenterOrange2.24
West Hills Hospital & Medical CenterWest Hills2.34

2021 penalties over .4 to .99 % include Long Beach Memorial Medical Center; Coast Plaza Hospital, Norwalk; Lakewood Regional Medical Center and Beverly Hospital in Montebello.

Sorted by amount of penalty:

HospitalCityPenalty
Community Hospital Of Huntington ParkHuntington Park0.2
Long Beach Memorial Medical CenterLong Beach0.21
Coast Plaza HospitalNorwalk0.28
St Mary Medical CenterLong Beach0.28
Lakewood Regional Medical CenterLakewood0.4
Glendale Adventist Medical CenterGlendale0.6
Beverly HospitalMontebello0.66