Exclusions from Penalties

 Generally these have other ways of controlling costs:

• Long term hospitals
• Veterans Affairs hospitals do not pay penalties, but a stay there, within 30 days after an initial treatment elsewhere, does earn a penalty for the first hospital.
• Department of Defense hospitals (Federal Register 19 August 2013 pp.50524). Members of Congress can receive care at Walter Reed.
• Rehabilitation hospitals
• Children's hospitals
• Cancer hospitals
• Psychiatric hospitals
• Religious nonmedical health care institutions
• Hospitals in Puerto Rico (which encourages medical tourism) and abroad
• Hospitals in Maryland have had an annual exemption so far, depending on state programs to restrict readmissions.

1. In August 2013 Medicare said Maryland would have to submit "an annual report to the Secretary describing how a similar program to reduce hospital readmissions in that State achieves or surpasses the measured results in terms of health outcomes and cost savings" (p.50665). 
2. 39 of the 47 Maryland hospitals have excess readmissions and would face Medicare penalties if they were not exempt. 
3. In 2014, Medicare changed the rules, no longer requiring the annual achievements. "Subsequent to our FY 2014 rulemaking, the State of Maryland entered into an agreement with CMS, effective January 1, 2014, to participate in CMS’ new Maryland All-Payer Model, a 5-year hospital payment model" (p.28001). They will try to reach national levels by 2019. 
4. Medicare's head office is in Maryland, so retirees and family members there do not face Medicare's readmission penalties.

• Critical access hospitals
• Medicare advantage plans, HMO or PPO, may control costs by referring to hospice instead of treating, and lack appeal rights
• Patients under 65 (e.g. disabilities or on dialysis, (Federal Register 19 August 2013 pp.50658)
• Patients who do not have Medicare parts A and B for 12 months before the initial hospital stay and 30 days after (Federal Register 19 August 2013 pp.50671, 2016...Specifications Report p.11)
  
• Scheduled admissions (like cancer treatments)