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:

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: