Table A. Readmission Penalties, Paid by Hospitals, for Six Conditions
Column A. Each "Penalty" is the cost of Initial Treatment in Column B multiplied by the US ratio of admissions to readmissions (Column D).
Column B. The "Average Base Payment" is an average of Medicare's detailed payments, by diagnosis from October 2014 to September 2015 (FY 2015). There are different payment levels for patients with and without other unrelated illnesses, and the average payment here is weighted by the number of patients having each payment level.
Column C. "US Average Readmissions" above were updated in Hospital Compare 26 July 2017.
Column D. "US Ratio of Admit to Readmit" is one divided by Column C.
Column E. "Each Condition" is the total of Medicare's counts of admissions, by diagnosis
Note F. Medicare does not provide as much detail as this table, but its data support an estimate of $52,000 average penalty per excess readmission in 2016, $36,000 in 2014 and $40,000 in 2013:
Note G. Medicare adjusts readmission rates for patient mix at each hospital, to level the playing field, but the adjustments have a very poor fit, explaining only 3-5% of the variation in readmissions.
Note H. MedPAC looked at the multipliers (shown in Column D), and recommended the law should change to:
Note J. Penalties for each hospital depend on constants in Table 1, and factors for each hospital in the Impact file each year.
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