Minnesota hospitals will lose an estimated $1.7 million in Medicare payments next year under a new program that penalizes hospitals for higher-than-average rates of readmission.
The penalties are based on the 30-day readmission rates for Medicare patients with three common conditions -- heart attacks, heart failure and pneumonia -- between 2008 and 2011.
The penalties, which will affect 29 Minnesota hospitals, will average about one-tenth of 1 percent of their annual Medicare payments, the Minnesota Hospital Association said.
The penalties were built into the 2010 Affordable Care Act to encourage hospitals to do more to keep elderly patients from returning unnecessarily within 30 days, and reduce Medicare costs. They take effect Oct. 1.
The Mayo Clinic Health System in Fairmont will face the state's largest penalty: 0.81 percent, according to an analysis by Kaiser Health News. The Hennepin County Medical Center faces a penalty of 0.22 percent of its Medicare revenue next year.
At the same time, dozens of other hospitals will have no penalties at all, including Mayo's Methodist Hospital in Rochester, St. Mary's Medical Center in Duluth and North Memorial Medical Center in Robbinsdale.
Penalties in Minnesota are lower than those in other states, said Mark Sonneborn, a vice president of the hospital association.
The new Medicare formulas will hit some hospitals harder than others: Allina hospitals will lose about $440,000 in the coming year, said spokeswoman Gloria O'Connell. But she noted that Allina hospitals are taking part in a statewide campaign to reduce hospital readmissions.
