Is Medicare Hospital Payment Policy Self-Defeating?
Medicare has a number of safeguards built into its payment system that are intended to ensure the highest quality care for patients at predetermined costs/prices. One of these safeguards in particular may be well-intended, but an untoward outcome could result in there being fewer hospitals who will agree to provide care to the poor.
One of the criteria the Centers for Medicare & Medicaid Services , CMS, uses to determine payments to hospitals is the percentage of patients who require readmission to that hospital within 30 days of discharge.
On one hand, this criteria makes sense because that 30-day window for readmission of a person to the hospital within 30 days of discharge from a hospital has been established by the medical community as a measurement of the standard of care of the discharging hospital. A person who has been hospitalized should be able to expect that his/her condition has been stabilized sufficiently for safe discharge and any after-care services have been arranged by the hospital prior to discharge.
Taken in and of itself, this standard of care seems reasonable -- all things being equal. However, in the real world, not all hospital patients nor their after care are the same.
At Forbes.com writer Peter Ubel points out that studies have shown that unmarried and poor people disproportionately return to the hospital for readmission in less than 30 days. Hospitals who treat a high number of people in these categories are more likely to then earn less in Medicare reimbursement.
Unless the standards of this intended safeguard are restructured to more accurately deal with these realities, the may be fewer hospitals in the future willing to accept the unmarried and poor, and/or Medicare recipients due to a continuing loss of revenue.
Resources: Forbes.com; " How Medicare is Punishing Hospitals That Care for Poor People "
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