Long Island hospitals lose millions in Medicare infection, readmission penalties

Long Island hospitals have made strides in preventing hospital-acquired infections and curbing readmissions of recently discharged patients, but their performance is still costing them millions in Medicare payments, a Newsday analysis of federal data shows. 

The Centers for Medicare and Medicaid Services, which oversees public insurance, released data last month showing how much it is cutting reimbursement rates at hospitals based on performance. 

NYU Langone Hospital was the only organization operating on the Island that avoided a fine for high readmission rates, an outcome that's common at hospitals across the nation. Others took hits, ranging from the fairly small — 0.01% off payment rates at Glen Cove Hospital —  to the more substantial — a nearly 1.2% penalty at Mount Sinai South Nassau.

Northwell Health, the region's largest health system with 23 hospitals, including about a dozen on Long Island, expects its readmission penalties, which vary by facility, to add up to more than $3 million systemwide.

On the other hand, just a fraction of hospitals across the United States are dinged for high rates of complications, such as surgical site and bacterial infections. St. Joseph Hospital in Bethpage is the only Long Island hospital to face a penalty based on that measure. 

The penalties are based on performance in past years, but impact the payments hospitals receive this fiscal year — October 2023 to September 2024 — for treating those with Medicare, a public insurance program mainly for seniors.

The cuts to compensation are meant to spur hospitals to raise the quality of care they provide. On Long Island, organizations have improved, with the average penalty under the readmissions program falling over the past decade, and fewer organizations losing money due to treatment complications in recent years, CMS data shows. But the penalties still feel costly and are controversial among health policy experts who question their efficacy and accuracy.

“The financial penalty, that takes money away from what one might do to provide better care,” said Dr. Peter Silver, senior vice president and chief quality officer at Northwell Health. 

“Whatever money we have, we turn around to providing care for our patients, whether it's establishing clinics in poor neighborhoods or being able to buy or replace an outdated [CT scan] machine,” he noted. "That's just money we can't spend that way."

Penalties decline

The Hospital Readmissions Reduction Program examines how frequently patients with several common conditions return to a hospital within 30 days of discharge. CMS grouped hospitals that serve similar amounts of low-income patients, and rated hospitals on how their 2019-2022 readmission rates compared to others in their cohort. Penalties vary by performance, with CMS cutting reimbursement rates by up to 3% for the worst scorers.

The average penalty for high readmission rates among the 19 organizations graded on Long Island was 0.4%, down from 0.51% a decade ago, according to Newsday's analysis of the CMS data. Some hospitals are graded individually, while others are assessed as part of a group of hospitals.

NYU Langone Hospital-Long Island — assessed with its NYU counterparts in Manhattan and Brooklyn — was the only regional hospital spared a penalty. Mount Sinai South Nassau got the largest penalty on the Island, 1.19%.

Mount Sinai South Nassau didn't respond to questions about the estimated sum or impact of the penalties, but chief medical officer Dr. Alan Wong issued a statement saying the hospital strives to set patients up for the best possible recovery after discharge.

“Our multidisciplinary approach to discharge planning includes social workers and care coordinators who work to educate patients and families about home care, medication reconciliation, follow-up care and appointments,” Wong said in the statement.

Other regional health systems say they are also refining their protocols for reducing readmissions. 

Stony Brook Medicine has a readmissions work group that looks at every part of treatment — what happens in the hospital, as people prepare to leave, and as they acclimate outside the hospital, said Dr. Marshall Miller, the group's physician lead.

This past summer, Stony Brook Medicine launched a post-discharge call center, which standardizes the way the health system checks in on people it has deemed to have a high risk of returning. The callers inquire about how patients are and their symptoms. They can help people access at-home physical therapy, nursing or other services, and check that follow-up appointments are booked, Miller said. 

“Our goal from this point forward [is] to start to expand and grow in the ways that make sense, based on the data that we're collecting,” Miller said. "When you reach out to patients, especially when they're already home, it becomes much more evident what they lack or need."

Stony Brook Medicine's penalty for readmission rates fell from 1.48% a decade ago to 0.15%. Midway through the period, the data started to include Southampton and Greenport hospitals that had joined the network, CMS data shows. The health system didn't respond to questions about how much the penalties amounted to.

To help patients avoid nursing homes, Northwell sets them up with equipment and home services, and educates relatives on how to care for them, Silver said. He noted that patients tend to fare better at home than at nursing homes.

The health system also tries to schedule a physician appointment within seven days of discharging people, Silver said. 

Experts wary of disincentives 

Using payment rates as a performance incentive has been controversial among health policy experts. The metrics can highlight real concerns, so asking about poor performances makes sense, said Dr. James Allen, emeritus professor of internal medicine at Ohio State University and a former medical director of an Ohio hospital. But he said patients also should base decisions on where to get care on other factors, such as Medicare's more comprehensive star rating and which hospitals have specialized in the type of care they need.

Others described greater flaws: There's a significant lag between the period assessed and the resulting penalty. Before recent changes, the program disproportionately hurt so-called "safety net" hospitals, which serve higher volumes of people who are more likely to have poor health outcomes due to high poverty rates and other socioeconomic challenges.

The initiative also appears to have pushed hospitals to keep more patients in the emergency room or “observation” status, where they don't count as readmissions, according to Dr. Rishi Wadhera, associate professor of medicine at Harvard Medical School. Patients put in observation status may face higher out-of-pocket costs than those that are admitted, he said.  

“Readmissions have gone down a little bit, but that’s really been in part because ER stays and observation stays have gone up,” said Wadhera, who said he is concerned that the initiative has been associated with higher mortality rates for heart failure, one of the conditions it tracks. “The evidence to date suggests the program hasn’t really achieved its objective. Why does it still exist?” 

CMS didn't respond when asked about these critiques of the program. 

Wadhera said he doubted most hospitals are providing poor care, despite CMS determining each year that some 70% to 80% of hospitals will have their reimbursement payments lowered because of their readmission rates.

Infections also fall 

Financial consequences are less common under the Hospital-Acquired Condition Reduction Program. Medicare decreases reimbursement rates by 1% for hospitals in the bottom 25th percentile when it comes to preventing illnesses or injuries patients didn't have before admission. 

While St. Joseph was the only Long Island hospital to have payments reduced this year, four health organizations on the Island had their payment rates cut in fiscal 2022. 

Catholic Health, which runs St. Joseph, said its performance has improved, but “there is always more to be learned.”

“We remain committed to identifying new opportunities for improvement and applying best practices across our health care system,” executive vice president and chief medical officer Dr. Jason Golbin said in a statement.