The Affordable Care Act (ACA) required the Centers for Medicare & Medicaid Services (CMS) to penalize hospitals for “excess” readmissions when compared to “expected” levels of readmissions. Since the start of the program on Oct. 1, 2012, hospitals have experienced nearly $1.9 billion of penalties, including $528 million in fiscal year (FY) 2017.
In FY 2013, payment penalties were based on hospital readmissions rates within 30 days for heart attack, heart failure and pneumonia. In FY 2015, CMS added readmissions for patients undergoing elective hip or knee replacement and patients with chronic obstructive pulmonary disease. CMS will add readmissions for coronary artery bypass procedures in FY 2017 and likely will add other measures in the future.