How long must those caring for our most vulnerable be punished? In spite of its laudable mandate to expand healthcare to more Americans, the Affordable Care Act has inadvertently set in motion federal policy that is now disproportionately slashing support for hospitals that serve the nation’s poor. 

At issue is the ACA’s mandate to reduce health care expenses by clawing back up to 3 percent of Medicare payments to hospitals whose readmissions (defined as patients who are readmitted within 30 days of discharge) are above the expectations of the Centers for Medicare and Medicaid Services (CMS). That resulted in CMS chopping Medicare payments by $428 million from hospitals that fell below its criteria during the just concluded 2015 fiscal year. 


A mountain of new evidence shows beyond the shadow of a doubt that the Affordable Care Act’s Hospital Readmissions Reduction Program penalties are falling most heavily on institutions that serve Americans on the lowest stratum of the socioeconomic scale. Researchers from Harvard Medical School have just reported in JAMA Internal Medicine that socioeconomic determinants are among the key factors accounting for differences in hospital readmissions: patients with assets in the bottom quartile were 52 percent more likely to be readmitted to the hospital within 30 days of discharge compared to those in the top quartile; patients whose income was in the bottom quartile were 44 percent more likely to be  readmitted than those in the top quartile; and those with less than a high school education were 24 percent more likely to be readmitted than those with a college degree. But none of these criteria is considered when the government judges hospital readmission performance. The Harvard team concludes, hospitals serving “more socially disadvantaged patients may have to devote considerable resources to avoid a penalty,” and warns, the Hospital Readmissions Reduction Program “threatens to deplete hospital resources available to improve overall quality for populations at high risk of poor outcomes.” 

This follows a series of recent findings pointing to the same conclusion:  a University of Michigan study that reports surgical patients on Medicaid were readmitted more frequently and utilized 50 percent more hospital resources than patients who could afford private health insurance; Congress’ Medicare Payment Advisory Committee’s determination that, “Hospitals’ readmission rates and penalties are positively correlated with their low-income patient share”; and the National Quality Forum’s conclusion that federal health administrators “should develop strategies to identify a standard set of sociodemographic variables to be collected and made available for performance measurement and identifying disparities.” 

These reports confirm what medical professionals witness every day. Once out of the protective arms of hospital care, those most likely to relapse are people without a proper home environment in which to healthfully recover, or individuals lacking the literacy or social support to easily obtain and administer medications. Consider a few real-life cases that resulted in readmissions:  

•       A broken elevator prevented a recently discharged elderly patient treated for heart failure from leaving his apartment to obtain fresh food and visit doctors for follow-up visits. 

•       Job loss and the subsequent loss of medical insurance forced a patient discharged from the hospital, but still suffering from multiple diseases, to go without medications so he could spend precious dollars on food and rent. 

•       A moldy apartment aggravated symptoms of an emphysema patient who had just been released from the hospital.                                        

Such cases are relatively rare in hospitals serving affluent neighborhoods, a fact reflected in their readmissions data, regardless of the quality of the hospital’s care. 

Medicare adjusts expected readmission rates only for a patient’s age, sex, discharge diagnosis and recent diagnoses, and, since last year, whether they have chronic obstructive pulmonary disease or have received a total hip or knee replacement. It ignores socioeconomic factors in judging readmissions.

Even when confronted with steep losses on care for the indigent, hospitals will continue providing treatment to all patients who enter our doors. That is our unyielding commitment. But in return, the federal government should not be penalizing hospitals for delivering charity care. 

Bills in Congress seek to remedy the situation. While I encourage Congress to pass legislation, the Centers for Medicare and Medicaid Services can act on its own to modify its implementation of the hospital readmissions reduction mandate. 

Congress and the President did not create the Affordable Care Act so it could take resources from those caring for the neediest members of our society. The sooner Congress or CMS takes action, the sooner a gross inequity will be corrected.  

Davis is president and CEO of the Mount Sinai Health System.