Study: ObamaCare could penalize hospitals with poor patients

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An ObamaCare program could be penalizing certain hospitals for serving more poor patients, according to a study released Monday. 

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The study focuses on an ObamaCare program that docks a hospital’s Medicare payments if its readmission rate is above a certain level. The program is meant to provide a financial incentive for hospitals to improve the quality of care and cut down on costly readmissions, in which a patient must return to the hospital after a procedure. 

But the new study, in the Journal of the American Medical Association, finds that many readmissions occur not because of problems with a hospital’s care, but because of socioeconomic factors among the patients. 

For example, the American Hospital Association (AHA) wrote in a report in March, “Research shows that economically disadvantaged patients often have limited access to services and resources that can help support their recovery post-hospitalization and, therefore, reduce their likelihood of being readmitted.”

Hospital groups like AHA have called for their penalties to be adjusted for factors outside of a hospital’s control, like patients’ income.

The study finds that almost half (48 percent) of the difference between hospital readmission rates could be explained by outside factors like patients' education and income levels. 

“Hospitals with high readmission rates may be penalized to a large extent based on the patients they serve,” conclude the three Harvard professors who wrote the study, Michael L. Barnett, John Hsu and J. Michael McWilliams.

Dr. Patrick Conway, chief medical officer for the Centers for Medicare and Medicaid Services (CMS), responded in a statement that the administration is “currently researching the impact of socioeconomic status” on the penalty program. 

He pledged to “continue to work with all stakeholders to seek feasible ways to encourage hospitals to reduce hospital readmissions while addressing any unintended consequences,” particularly for those serving low-income patients. 

The penalty program currently adjusts for some patient factors, like age, sex and recent diagnoses. But CMS warns that adding adjustments for socioeconomic status could hold hospitals that serve poorer people to a lower standard of care. 

The penalties under the program can reach up to 3 percent of a hospital’s Medicare payments. This year, CMS assessed $428 million in penalties, according to an analysis from the Kaiser Family Foundation.