One aspect of the Affordable Care Act has been to seek ways to lower the costs of health care, including Medicare expenditures. The Act established financial penalties for hospitals which had excessive readmissions for conditions recently treated in those hospitals.
During the first eight months of 2013, fewer than 18 percent of Medicare patients ended up back in the hospital within a month of discharge, the lowest rate in years, the government reported. This drop occurred during the first year that Medicare financially penalized hospitals for their readmission rates, and the government seized on the decrease as evidence the incentives are having an effect. The government is targeting rehospitalizations as a significant indicator of gaps in medical quality in the nation’s hospitals.
While some elderly patients inevitably return to the hospital, the government and some researchers believe many of those returns are avoidable if hospitals monitor patients after their release to ensure they get appropriate medications and follow-up visits with doctors. In the first year of the program, which began in August 2012, Medicare fined 2,213 hospitals — about two-thirds of those it evaluated — for higher than anticipated readmission rates. Last August, Medicare issued a second year of penalties against 2,225 hospitals. The maximum penalties created by the health law have risen from 1 percent of regular Medicare payments to 2 percent, and they will increase for a third and final time next August to 3 percent.
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