# How are readmission penalties calculated?

## How are readmission penalties calculated?

The penalties were calculated by subtracting each adjustment factor from 1 and turning it into a percentage. Thus, a hospital losing the most money because of its high readmission rate (which CMS gave an adjustment factor of 0.97) is listed by KHN as receiving a 3 percent penalty.

### What is the cost of readmission?

In 2018, there were a total of 3.8 million adult hospital readmissions within 30 days, with an average readmission rate of 14 percent and an average readmission cost of \$15,200.

What is the HAC penalty?

Under the program, the Centers for Medicare & Medicaid Services penalizes the lowest performing 25% of all hospitals each year 1% of their Medicare hospital payments. In addition to these penalties, the law requires CMS to post publicly hospitals’ performance on HAC quality measures.

What are the effects of hospital readmissions?

For instance, in-hospital mortality has been found to be higher for patients who are readmitted versus those who are not. Other researchers argue that readmissions lead to an increased length of stay and expenditure of more hospital resources.

## How does HAC affect reimbursement?

Hospitals with a Total HAC Score greater than the 75th percentile of all Total HAC Scores will receive a 1-percent payment reduction. This payment adjustment applies to all Medicare discharges for the applicable fiscal program year when CMS pays hospital claims.

### How are HAC scores calculated?

Scoring Methodology

1. Apply an equal weight for each measure for which a hospital has a measure score.
2. Multiply the measure score by the weight for each measure to obtain each measure’s contribution to the Total HAC Score.
3. Sum the contributions of the measure scores to obtain the Total HAC Scores.

What happens when patients are readmitted within 30 days?

Medicare counts as a readmission any of those patients who ended up back in any hospital within 30 days of discharge, except for planned returns like a second phase of surgery. A hospital will be penalized if its readmission rate is higher than expected given the national trends in any one of those categories.