Regina Hospital faces Medicare penalties, also expects $35,000 bonus


Regina Hospital in Hastings is one of several hospitals in the state to face penalties imposed by Medicare. 

Medicare compiled data that shows the penalties and rewards that Minnesota hospitals that are participants in the Inpatient Prospective Payment System (IPPS) are expected to face.
According to the Center for Medicare and Medicaid Services (CMS) website, a prospective payment system (PPS) is “a method of reimbursement in which Medicare payment is made based on a predetermined, fixed amount. The payment amount for a particular service is derived based on the classification system of that service (for example, diagnosis-related groups for inpatient hospital services).”
CMS rated the hospitals in each of their three performance-based payment models: Hospital Value-Based Purchasing (VBP), Hospital-Acquired Condition Reduction Program (HACRP) and Readmissions Reduction Program (HRRP).
The reports cover a rolling three-year period; for the fiscal year of 2016, data was acquired from July 2011 to June 2014.
For the fiscal year of 2016, Regina Hospital is estimated to lose $62,000 to $63,000 from federal funding for the readmissions reduction program, according to a Regina fact sheet. Actual penalties from Medicare have not yet been finalized. The hospital will have no reduction in payment for hospital acquired conditions and will receive over $35,000 as a bonus for good performance in hospital value-based purchasing.
Readmissions for this report are classified as a Medicare patient that has been discharged, but has been readmitted to an acute care hospital within a 30-day period. The initial hospital in which the Medicare patient stayed is penalized if the patient is readmitted, even if the patient is readmitted to a hospital other than the one they originally went to.
According to, “In October 2012, CMS began reducing Medicare payments for Inpatient Prospective Payment System (IPPS) hospitals with excess readmissions. Excess readmissions are measured by a ratio, by dividing a hospital’s number of ‘predicted’ 30-day readmissions for heart attack, heart failure, pneumonia, hip/knee replacement, and COPD by the number that would be ‘expected,’ based on an average hospital with similar patients. A ratio greater than 1 indicates excess readmissions.”
Regina Hospital’s ratio stands at 1.94 percent for the fiscal year of 2016.
Thomas Thompson, president of Regina Hospital explained that accidental or chance readmissions count against a hospital as well.
“If you came into Regina and you had pneumonia and we took care of your pneumonia and you were discharged, and a week and a half later, you were unfortunate enough to get into a car accident and be hospitalized again, let’s say United (Hospital), that would be a readmission,” Thompson said.
To prevent readmissions, Christy Iverson, manager of safety, quality and performance improvement at Regina, said that there are a number of things that the staff does to help prevent readmissions, including looking at the hospital database for high-risk or moderately high-risk patients and completing the necessary steps to prevent the patients from being readmitted.
“What we analyze internally is called our potentially preventable readmissions, a little bit different methodology, but it really gets at the things we can take an effect on,” Iverson said.
There are also regimens that the hospital follows through on to make sure that the after care for patients prevents them from readmittance, at least when it comes to the patient’s original medical condition.
“What we do do to make sure that we’re preventing readmissions is we do discharge follow-up phone calls with our inpatients when they leave to make sure that they have scheduled their follow-up appointments at the clinic, that they’re not having issues, that they didn’t have any medication issues to where they were able to get their medications filled … those are some very, very common barriers that cause readmissions,” Iverson said.
Thompson also added that it’s easy for patients to forget everything that they talked about once they leave the hospital, so having follow-ups and materials for the patients to take home is a good way to have them keep up with good after-care.
“The follow-up phone call that we give to our patients, the follow-up setting up appointment with the physician office is really try to ease the path and the care transition, which has a resulting favorable impact on readmission rates,” Thompson said.
Overall quality of care
Value-Based Purchasing (VBP) measures the overall quality of care a hospital provides to patients. Regina Hospital, which is a part of Allina Health, uses a measurement model in which there are four measures, each weighing 25 percent, that make up a VBP summary.
The measures are safety measures, clinical care and outcome measures, patient experience and care coordination measures and efficiency.
VBP is the only inpatient prospective payment system model that gives bonus dollars to hospitals that exceed standards.
According to data received by Regina Hospital, for the fiscal year of 2016, Regina will receive over $35,000 for good performance.
“We measure everything and we have process improvement practices in place to prove everything, and this isn’t just Regina,” Thompson said, “and that’s one of the strengths about being part of a large health system, is the data at your disposal. Within our company, we have a data warehouse where all patient information goes and we can use it in different modeling.”
While the losses from readmissions seem to be a large number, Iverson said that in the grand scheme of things, the impact is not great.
“Overall a pretty minimal impact to the budget,” she said.
She also added that the impact these payment reductions make on the hospital environment are also minimal as the quality of care from staff remains great.
“What they (Hospital staff) see on the front-end are the ways we try to reduce these types of things (readmission, hospital-acquired conditions, etc.),” Iverson said.