Minnesota hospitals have lost millions in penalties to the federal Medicare program over the last three years for sub-par performance, though they’re in much better shape than hospitals elsewhere.
The state’s 50 largest hospitals are collectively being penalized by 0.16 percent of their inpatient Medicare revenue this year — which will amount to $2.4 million in losses — for failing to prevent patients from being readmitted within 30 days of their prior hospital stays.
This is better than the average penalty of 0.5 percent assessed by Medicare nationally for failing to prevent readmissions, which indicate that hospitals didn’t adequately treat patients and prepare them for safe returns home. The penalties vary in Minnesota, where five hospitals are being docked more than 1 percent of their inpatient revenue from Medicare for poor performance.
The Star Tribune assembled the Medicare penalties for the last three years, along with data provided by the Minnesota Hospital Association on how much those penalties are expected to cost in 2016, into a database that is searchable by hospital.
The financial losses themselves might not sting; Regina Hospital in Hastings is only expected to lose $85,000 this year due to a 1.94 percent penalty that is one of the 200 worst in the nation. (But even penalties that are less than one percent can add up when considering that Medicare pays for care for the nation’s elderly, and accounts for 25 percent to 50 percent of most hospitals’ revenues.)
But the publicly accessible penalty can be compared, and hospital officials don’t want to be on the wrong end of the list.
“We want to know where we stand in the community,” said Tim Sielaff, chief medical officer for Allina Health, which operates Regina and a dozen other hospitals in and around the metro area.
More important than pride, he said, is figuring out the reason for poor performance and addressing it so that patients receive better care.
Readmissions are but one of three things measured publicly by Medicare that have financial implications.
Hospitals also are measured by their rates of infections such as sepsis and preventable conditions such as bed sores that patients sustain during their stays. Those ranked in the bottom 25 percent nationally are penalized, and the amounts are more severe because they apply not only to what Medicare pays for inpatient care, but what the federal program pays hospitals for training, building improvements and other expenses.
Four Minnesota hospitals are losing more than $1 million this year due to this program.
On the other hand, a Medicare program ranking hospital value penalizes some hospitals but then takes the proceeds and gives them to top-performing hospitals. Value is measured by patient feedback and by indicators of efficiency, clinical performance and also improvement from prior years.
On this measure, only five Minnesota hospitals are paying out penalties this year. Collectively, the state is expected to gain $5.8 million due to the high value of its hospitals.
Seven hospitals hold the distinction this year of being rewarded for value while avoiding penalties for readmissions and infections.
Regions Hospital in St. Paul and the University of Minnesota Medical Center in Minneapolis are the only two being penalized financially by all three measures this year.
Hospital leaders point out that the penalties are based on year-old data, don’t reflect recent improvements, and should be used by the public to ask questions of hospitals rather than rule them out.
Data Drop is a weekly feature that uses data analysis and visualizations to explain, surprise, inform and entertain readers on topics relevant to Minnesotans. Do you have an idea you'd like us to explore? Contact MaryJo Webster