When we reviewed the impact of readmissions penalties across the country, some things changed and other stayed the same.
Much of the penalty is focused on hospitals in the eastern half of the country. This is most likely due to those hospitals having higher infrastructure and labor costs reflected in their Medicare reimbursement rates, which are a critical factor in the calculation of the penalty.
In 2016, all active hospitals in Washington DC are penalized. Unlike last year, one hospital in Delaware, New Jersey, and West Virginia each managed to escape penalties. At least 90% of active hospitals are being penalized in eight states plus Washington DC.
% of Hospitals with a FY 2016 HRRP Penalty of 90% or greater
|% Providers Penalized||Total||Penalized||%|
|District of Columbia||7||7||1|
The top five states for total HRRP penalties are New York, Florida, California, Illinois, and New Jersey, with the top seven states experiencing a total of over $20M. California and Illinois traded places this year as the penalty in Illinois dropped by close to $4M.
FY 2016 Total HRRP Penalty Amount by State – Top 10
|Total Penalty By State|
When it comes to average penalty per hospital, New Jersey still comes in at the top of the list, but the average value has dropped to under $400k.
FY 2016 Average HRRP Penalty Per Hospital
|Average Penalty per Penalized Provider|
|District of Columbia||$266,721|
It should be noted that Maryland hospitals are not penalized under the HRRP, although their data is included in the Medicare penalty calculations. Maryland hospitals are exempt due to their unique Medicare reimbursement system and the fact that they participate in a state-specific readmissions reduction program.
The financial impact of the HRRP to hospitals is substantial. Providers should understand the impact at their organization, and take appropriate action to reduce their excess readmissions.