More than two-thirds of Connecticut hospitals will face Medicare penalties for lagging clinical-care measures in the fiscal year that began Oct. 1, with smaller hospitals including Johnson Memorial, Windham and New Milford losing the highest percentage of reimbursement.
The penalties, under a federal program known as Value-Based Purchasing, average .26 percent nationally, with Connecticut’s hospitals losing an average of .23 percent, according to federal data compiled by Kaiser Health News. None of the state’s hospitals will lose the maximum possible penalty, 1.25 percent of funding, federal data shows.
Johnson Memorial and Windham are the only two hospitals that will lose more than .5 percent of their Medicare payments – up slightly from the penalties they faced last year. Meanwhile, eight of the 28 state hospitals in the program will receive small bonuses (less than 1 percent) in Medicare reimbursements. They include: Yale-New Haven Hospital, William Backus Hospital in Norwich, Stamford Hospital, St. Vincent’s Medical Center in Bridgeport and MidState Medical Center in Meriden.
At St. Vincent’s, Tom Collins, director of quality management and patient safety, said the hospital had been successful in improving core clinical-care performance and had worked to improve patient satisfaction – both measured under the federal program.
“We perform very, very well on the process measures” for heart attack, pneumonia and surgery patients, he said. Patient satisfaction rates are harder to influence, he noted.
“Everybody struggles with that, because it’s patients’ perceptions,” Collins said. “We focus on [having] quiet at night and on nursing and physician communication. We’re very diligent about building those relationships.”
Under the value-based program, hospitals receive penalties or incentives based on how well they perform on a range of clinical measures, such as controlling surgery patients’ blood sugar levels or giving them antibiotics; on patient satisfaction measures; and on mortality rates for certain conditions. Last year, the potential bonuses and penalties were capped at 1 percent; they rise gradually every year, to 2 percent in 2017.
While the percentages are small, they can amount to hundreds of thousands of dollars for hospitals with large numbers of Medicare patients.
At Yale-New Haven, which moved from a .32 percent penalty last year to a .33 percent bonus this year, Dr. Thomas J. Balcezak, senior vice president for quality, said further improvements in the clinical measures will be difficult, since the hospital already is “98 to 99 percent compliant” with the care standards.
He said the biggest bump in the hospital’s performance in the value-based program was the inclusion of 30-day mortality measures this year, since Yale’s outcomes are better than the national average in the three areas measured: heart attacks, heart failure and pneumonia.
“We think where we compete really well is in the outcome measures,” he said.
While Medicare’s penalty formula has stirred controversy, Balcezak said, “It’s hard to argue that these process measures are things we shouldn’t be focusing on. It’s our core competency.” But he noted that the imposition of the penalty system comes at a time when many acute-care hospitals are facing other financial pressures.
Nationally, about half of the 2,700 hospitals included in the Medicare program will face some penalty – a lower rate than the 71 percent of hospitals in Connecticut that will be penalized. Only seven states had a higher percentage of hospitals that were penalized, including New Mexico, North Dakota and Wyoming.
In addition to the penalties on quality measures, 23 Connecticut hospitals are losing Medicare funding because of high rates of readmitting patients within 30 days of a hospital stay. None of the state’s hospitals will lose the maximum amount possible – 2 percent of every Medicare payment for a patient stay. But two will lose more than 1 percent: the Masonic Home and Hospital in Wallingford (1.14 percent), and St. Vincent’s (1.06 percent).
When both Medicare programs are combined, the hospitals taking the biggest hits are Bristol (a 1.13 percent reduction), Griffin (1.07 percent), Masonic Home and Hospital (1.14 percent), and Milford (.93 percent).
Four hospitals will make out ahead from Medicare: Backus (.14 percent bonus); Stamford (.04 percent); St. Mary’s (.28 percent); and John Dempsey (.09 percent).
Compared to last year, Yale-New Haven had the biggest improvement overall in both Medicare programs: a 1.04 percentage point gain in value-based purchasing and readmissions combined.
Leaders of the Connecticut Hospital Association have said that the state’s hospitals are working together to share best practices in order to reduce readmissions and improve clinical outcomes. They stress that the federal programs gauge only a small portion of the care delivered by hospitals.
Under the value-based program, 45 percent of a hospital’s score is based on how well it follows clinical standards of care; 30 percent is based on how patients rate the care they received; and 25 percent is based on mortality rates of patients admitted for heart attacks, heart failure or pneumonia.
View the Kaiser report here.