Noteworthy News

Safety-Net Hospitals Bear Brunt of Medicare Penalties

Hospitals that serve the largest proportion of low-income patients are suffering the greatest financial penalties under Medicare’s value-based purchasing program.

Collectively, hospitals that serve the most low-income patients are seeing their Medicare payments reduced 0.09 percent during year two of the Medicare program while hospitals that serve the fewest low-income patients have seen their Medicare payments rise 0.06 percent, according to a new study by a Harvard School of Public Health professor.

Medicare’s value-based purchasing program, mandated by the Affordable Care Act, bases penalties and bonuses on 24 quality measures.

iStock_000008112453XSmallThe author of the study suspects that the performance of safety-net hospitals may be suffering from the manner in which their patients are responding to the patient satisfaction survey that is one of the determining factors in evaluating hospital performance.

The author’s suspicions echo the National Association of Urban Hospitals’ frequently expressed concern about the use of patient satisfaction surveys in influencing Medicare quality payments as part of the Medicare value-based purchasing program.  In a letter to the Department of Health and Human Services in response to the proposed FY 2013 Medicare inpatient prospective payment system regulation, NAUH wrote that

We believe the survey is biased against large urban hospitals in several respects.  In some instances, we believe the survey’s questions are biased against large urban hospitals; in others, we believe the manner in which the survey’s findings are weighted is biased against large urban hospitals.

NAUH also wrote that

We think it is inappropriate, for example, to compare the degree of quietness of a seventy-five-year-old hospital with semi-private rooms located in a congested urban area with that of a new facility with private rooms located on a sylvan, multi-acre campus set well off any major thoroughfares.  

And NAUH noted that

We think it is unfair, for example, to downgrade the survey results from the kinds of patients urban safety-net hospitals serve in especially high numbers and proportions, such as maternity patients and those for whom English is not their native language.  Similarly, the American Hospital Association has found that more seriously ill patients are more likely to respond with negative observations when completing the HCAHPS survey.  Urban safety-net hospitals care for such patients in disproportionate numbers and believe this situation calls for appropriate adjustment.  In addition, CMS’s own data shows significantly lower scores in more urbanized states – the very places in which most urban safety-net hospitals can be found.  Consequently, NAUH believes more should be done to adjust HCAHPS scores appropriately before they are used to influence Medicare payments to hospitals.

For a closer look at the study and its findings, see this Kaiser Health News report.


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