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Medicare Scales Back Rule On Hospitals With Pricey Patients

Medicare today scaled back its proposal to hold hospitals accountable for the cost of patient care in the 90 days after discharge. Medicare announced in its final rule that hospital payment would be reduced if the hospital’s average patient had a higher than normal cost to Medicare during their stay until 30 days after discharge — two months less than it had originally proposed.

The change was not unexpected. In fact when it proposed the rule in May, Medicare invited arguments that the period should be one month, not three months. Hospitals had strongly argued against the scope of the “Medicare spending per beneficiary” measure.

Still, it’s unlikely the scaled-back version will placate hospitals that don’t think it’s fair to be judged on the cost patients run up once they’ve walked out the door. KHN wrote about that broad concern in a story over the weekend.Medicare does not appear to have changed its new program to punish hospitals with higher-than-expected readmission rates, which was the focus of that story. But a fact sheet accompanying the release said Medicare may make changes to that rule down the road.

In its final rule, Medicare said it will eventually lengthen the period that hospitals will be judged on their average patient’s spending. But Medicare said it will wait until hospitals get used to the initial 30-day period.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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