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N.J. hospitals move to reduce Medicare readmissions, avoid costly penalties imposed by Affordable Care Act

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Overlook Medical Center paid no reimbursement penalties in 2013, one of two hospitals in the state to do so.
Overlook Medical Center paid no reimbursement penalties in 2013, one of two hospitals in the state to do so. - (OVERLOOK MEDICAL CENTER)

One of the penalties under the Affordable Care Act that specifically targets hospitals is the reduction of Medicare reimbursements for hospitals that readmit too many Medicare patients within 30 days of their discharge.

And those penalties amount to much more than loose change. In the 2013 fiscal year, New Jersey's hospitals paid a total of $19 million in readmission penalties to Medicare.

However, it seems as though local hospitals are at least moving in the right direction on readmissions.

Kerry McKean Kelly, a spokeswoman for the New Jersey Hospital Association, said the state's overall Medicare readmission rate declined to 20.1 percent at the end of 2012, compared with 21.6 percent at the end of 2011.

"Hospitals have invested a lot of energy on this issue, and we're happy to see that the numbers are moving in the right direction," she said.

"We do realize that there is still a long way to go," Kelly said. "We need to continue to reduce the readmission rates and avoid some of the penalties" imposed by the health care legislation.

The maximum penalty charged for the 2013 fiscal year was 1 percent, according to the state's hospital association. That penalty is scheduled to increase to 2 percent in 2014, rising to 3 percent in 2015.

Kelly said two New Jersey hospitals paid no penalties in 2013: Morristown and Overlook medical centers, both members of the Atlantic Health system. Additionally, she said, Medicare already has announced that New Jersey's hospitals overall have improved their readmission rates, and will see a reduction in penalties.

This year, Kelly said, five New Jersey hospitals will pay no penalties: Monmouth Medical Center, Morristown Medical Center, Overlook Medical Center, Inspira Medical Center Vineland and Southern Ocean Medical Center.

"That's welcome progress, but we know there's more work to be done," Kelly said.

In 2010, the association launched a collaborative that now includes 55 of the state's hospitals, which are working "to assist patients and make sure their recovery remains on track" after they leave the hospital.

That level of monitoring involves coordinating care with nursing home, home health agencies and primary-care practices in the community "and making sure all of the providers are on the same page, and trying to help that patient recover," Kelly said.

E-mail to: beth@njbiz.com
On Twitter: @bethfitzgerald8

Beth Fitzgerald

Beth Fitzgerald

Beth Fitzgerald reports on health care, small business and higher education. She joined NJBIZ in 2008 after a 34-year career at the Star-Ledger and has been reporting on business in New Jersey since 1978. Her email is beth@njbiz.com and she is @bethfitzgerald8 on Twitter.

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