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  • Hospital Re-admissions Payment Policy

    Avoidable hospital re-admissions are a recognized quality of care issue, costing our healthcare system billions of dollars that could be spent elsewhere. Nearly one in five Medicare patients is readmitted within 30 days representing a cost of over $26 billion annually. The Partnership for Patients acknowledged the magnitude of the problem by establishing as a primary goal a 20 percent reduction in hospital re-admissions.

    Beginning in 2012, the Affordable Care Act requires Medicare to reduce hospitals' payments for potentially preventable re-admissions for the following three conditions: acute myocardial infarction (AMI), pneumonia (PN), and heart failure (HF). These conditions were chosen because they represent high volume and cost re-admissions for which their are 30-day risk standardized readmission measures that are endorsed by the National Quality Forum.

    The re-admissions payment policy will reduce payments to hospitals that have excess Medicare re-admissions for the three conditions (AMI, PN, & HF) by applying an adjustment factor against their base operating DRG payments. This policy will only apply to hospitals with 25 or more relevant discharges. Medicare has the authority to expand the policy to additional conditions in future years and to release information to the public on hospitals' readmission rates through the Hospital Compare Website.


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