St. John’s Medical Center is one of nine Wyoming hospitals being penalized by Medicare for readmitting patients, but CEO Paul Beaupre said he’d rather pay the fine than turn away patients.

“I would tell anybody that this is a fine I’ll gladly pay,” he said. “Because at the end of the day, if I have a patient that needs to be readmitted to the hospital, we’re never going to turn that patient away because we’re concerned we have to pay a penalty later on.”

Beaupre said the penalty doesn’t reflect poorly on the caliber of health care offered. In fact, the hospital was recently awarded another “five star” rating from the Centers for Medicaid and Medicare Services, a rating that takes readmission rates into account as one of several metrics. St. John’s was the only hospital in Wyoming and one of 293 hospitals nationwide to receive the highest rating.

“When CMS awards five stars for quality, they’re fully aware of our readmission rates at the time that they do that,” Beaupre said. “For anybody to equate the fact that we’ve been penalized by CMS as a diminution in the quality of care we’re providing patients would be a wrong conclusion.”

Hospital-wide readmission rates at St. John’s are now the same as the national rate of 15.3 percent.

Effect on patient outcomes

Under programs set up by the Affordable Care Act, the federal government can cut payments by up to 3 percent per Medicare patient for hospitals with high rates of readmission. The penalty is what Kaiser Health News calls a “signature part of the Affordable Care Act’s effort to encourage better care.”

Since 2012 Medicare has punished hospitals for having too many patients end up back in their care within a month for six targeted conditions: heart attack, heart failure, pneumonia, chronic obstructive pulmonary disease, elective hip and knee replacement, and coronary artery bypass graft. In 2018 Medicare penalized almost 2,600 hospitals, amounting to an estimated $564 million in payment reductions.

The idea behind readmission penalties is that if hospitals reduce the number of returning patients, they’re taking better care of patients in the first place and, in doing so, saving Medicare money. Congress’ Medicare Payment Advisory Commission concluded last year that the Hospital Readmission Reduction program has saved Medicare about $2 billion a year.

The hospital industry and physicians argue that discouraging readmissions may lead to worse outcomes, an idea the advisory commission rejects. The readmission penalties also have come under fire for not accounting for hospitals that serve poorer patients or operate in rural settings.

This year’s penalty, a 2.82 percent reduction in Medicare payments, is calculated based on data from July 2014 through June 2017. During that time, St. John’s readmission rate for knees and hips was about 1.1 percent above the national average of 4.2 percent, and the readmission rates for chronic obstructive pulmonary disease and pneumonia were about 1.3 percent above the national averages of 19.6 percent and 16.7 percent, respectively.

Other hospitals Wyoming listed as having “excess rehospitalizations” for that time frame are, in order of penalty percentage: Mountain View Regional Hospital in Casper, Cheyenne Regional Medical Center in Cheyenne, Wyoming Medical Center in Casper, Campbell County Memorial Hospital in Gillette, Evanston Regional Hospital in Evanston, Sagewest Health Care in Riverton, Memorial Hospital Sweetwater County in Rock Springs, and Ivinson Memorial Hospital in Laramie.

One hospital in the state, Aspen Mountain Medical Center in Rock Springs, was penalized for hospital-acquired conditions this year.

Medicare’s 2019 penalty means St. John’s has lost about $70,000 in reimbursements. About a third of the hospital’s patients are on Medicare.

That loss could have been bigger, but the hospital’s five-star rating makes it eligible for higher reimbursements that offset some of the penalties, Beaupre said.

Knowing the penalties were coming helped the hospital figure out ways to absorb some of the fines and implement programs that might resolve the issue.

Hospital administrators pointed to two changes they hope will improve readmission rates for knee and hip replacement surgery and chronic obstructive pulmonary disease. The Marshall Steele program (now called Stryker) revamped a variety of elements in joint replacement and has increased patient satisfaction. And case managers assigned to clinics follow up with chronic obstructive pulmonary disease patients, making sure they take their medication and have follow-up visits scheduled to lessen the potential for a relapse.

Rural locale could be at play

Data from Kaiser Health News shows St. John’s was penalized in 2015, 2016, 2018 and 2019. The percentage has crept up over the years, from 0.81 and 0.82 percent in 2015 and 2016 respectively to 1.93 percent in 2018 and 2.82 percent in 2019 — the highest penalty statewide. The uptick could be attributed to a variety of reasons.

“Being a small hospital ... a small number of readmissions could change our rate significantly,” said Karen Connelly, chief communications officer.

A change in how penalties are calculated across the country using the grouping of like hospitals may also have contributed to the spike this year. Hospitals are now clustered into five groups with peers from ZIP codes with similar wealth, so Teton County is compared with likely dissimilar hospitals in larger urban areas. The intent is to lower penalties for hospitals serving more low-income patients, but the change is hurting rural hospitals like St. John’s.

Serving patients, who sometimes drive an hour or more for treatment, Beaupre said, “we err on the side of bringing them in versus sending them home.”

Contact Kylie Mohr at 732-7079, or @JHNGhealth.

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