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ACA Pushes Hospitals: Lower Readmissions or Get Less Medicare Cash

Via KELO Radio, we learn that Medicare is reducing payments to nine South Dakota hospitals as punishment for seeing too many patients come back for seconds—i.e., for not curing what ailed us the first time. Medicare is lowering payments another 1% to three of those hospitals—Brookings Health System, Monument Health in Rapid, and Sanford in Aberdeen—for excessive infection rates—i.e., making patients sick with something else while they visit.

  • Avera McKennan, Sioux Falls: 0.19% decrease in reimbursements for high readmissions.
  • Avera St. Luke’s, Aberdeen: 0.05% decrease in reimbursement for high readmissions.
  • Avera St. Mary’s, Pierre: 0.97% decrease in reimbursement for high readmissions.
  • Brookings Health System: 0.22% decrease in reimbursement for high readmissions. 1% decrease for hospital-acquired conditions.
  • Dunes Surgical Hospital, Dakota Dunes: 2.3% decrease in reimbursement for high readmissions.
  • Monument Health, Rapid City: 0.16% decrease in reimbursement for high readmissions. 1% decrease for hospital-acquired conditions.
  • Monument Health, Spearfish: 0.86% decrease in reimbursement for high readmissions.
  • Prairie Lakes Health, Watertown: 0.13 decrease in reimbursement for high readmissions.
  • Sanford Health, Aberdeen: 0.44% decrease in reimbursement for high readmissions. 1% decrease for hospital-acquired conditions [Todd Epp, “Feds to Ding Nine S.D. Hospitals’ Medicare Payments for High  Readmissions, Infections,” KELO Radio, 2021.10.28].

None of South Dakota’s hospitals incurred the maximum readmission penalty of 3%, which was leveled on 39 hospitals across the U.S.

According to Kaiser Health News, Medicare is reducing payments to 2,499 hospitals nationwide. That’s 47% of all hospitals, but Medicare exempts 2,216 facilities from these penalties “because they specialize in children, psychiatric patients, or veterans.” So of the 3,046 hospital subject to review of readmission rates, 82% are getting some penalty. These penalties are based on Medicare patient discharges from July 1, 2017, to December 1, 2019, so they do not include any hospitalizations during the coronavirus pandemic.

Kaiser Health News describes this Hospital Readmissions Reduction Program, started in 2012 as part of the Affordable Care Act, as “an effort to make hospitals pay more attention to patients after they leave.” Data from Congress’s Medicare Payment Advisory Commission indicates that, in addition to saving Uncle Sam $521 million in Fiscal Year 2022, the penalties are driving readmission rates down:

MedPAC [has found readmission rates declined from 2008 to 2017 after the overall health conditions of patients were taken into account. Heart failure patient readmission rates dropped from 24.8% to 20.5%, heart attack patient rates dropped from 19.7% to 15.5%, and pneumonia patient rates decreased from 20% to 15.8%, according to the most recent MedPAC analysis. Readmission rates for chronic obstructive pulmonary disease, hip and knee replacements, and conditions that are not tracked and penalized in the penalty program also decreased.

“The HRRP has been successful in reducing readmissions, without causing an adverse effect on beneficiary mortality,” MedPAC wrote. The commission added that untangling the exact causes of the readmission rates was complicated by changes in how hospitals recorded patient characteristics in billing Medicare and an increase in patients being treated in outpatient settings. Those factors made it difficult to determine the magnitude of the readmission rate drop due to the penalty program, MedPAC said [Jordan Rau, “Medicare Punishes 2,499 Hospitals for High Readmissions,” Kaiser Health News, 2021.10.28].

Just one more example of the Affordable Care Act, that South Dakota’s Senators both wanted to repeal, is saving money and improving health care.


  1. Richard Schriever 2021-11-01 10:34

    I’m having a hip replacement done and it appears to me as if its most likely to be an out-patient process. It depends on the post surgery evaluation that occurs 2-3 hours afterward by a combination of the Surgeon and Physical Therapist. Both pre and post op processes are more “dense” with surgery and primary care team contacts and communications than my prior experiences. But that may be due to the nature of the procedure as well as being an outcome of the increased focus on care created by ACA rules.

  2. Mark Anderson 2021-11-01 17:49

    Well it’s good and bad, makes it harder to get good care for one. I thought it would be sooo much easier on Medicare. You have to select a provider the way you select a prostitute in a house of ill repute. They all look pretty but one will give you the clap.

  3. larry kurtz 2021-11-01 18:35

    Dr. David Scrase is secretary of New Mexico’s Human Services Department and an integral part of the state’s COVID-19 response. He informed the decisions to mandate masks over a year ago because he knew hospitals would face shortfalls and staff shortages.

    The contrast between how blue states and red states have responded to the crisis is markedly exceptional.

  4. Porter Lansing 2021-11-01 18:59

    The contrast between how blue states and red states have responded to the crisis is markedly exceptional.

    “Hear, hear, Mr. Kurtz.”

  5. Bo OConnor 2021-11-01 20:32

    Pre-COVID I can attest that cleaning protocols at Sanford Health were lax. I haven’t worked there since 2019 but the general attitudes were very assembly line, with little attention to detail and the least money possible spent on workplace hygiene. Of course I probably just described every large hospital system in the country. Some things in life should have the money-motive stripped away.

  6. RST Tribal Member 2021-11-02 07:28

    The South Dakota’s hospitals listed will need to refine their catch and release policies. Wonder if the same applies to VA and IHS hospitals as their releases have a worst outcome. The second or third catch usually involves a mortician. And, don’t punk out the crap about socialized medicine, as one group of recipients gave people the freedom to be wise or stupid, the other gave up millions acres of land and didn’t “deport” all those immigrants trespassing on their homelands. Leadership in Washington just hasn’t owned up to its duty.

    South Dakota has limited availability of health care facilities due to the state’s current leadership’s attitude, “it’s a person’s own responsibility to stay health and germ free”. Kinda like don’t regulate those houses of ill repute, just make sure condoms can be gotten for a price… enter at your own risk.

    This list of hospitals are one of many examples as to why the inbred South Dakota Republicans in Washington voted against the ACA; accountability, responsibility, and affordability. Just a few terms not understood by the inept inbreeds representing South Dakota in Pierre and Washington.

    November 2022 cannot come soon enough as it could be the time for change.

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