Eight Hawaii hospitals will receive less money from Medicare this year because of too many readmissions.

An analysis of federal records by Kaiser Health News shows three hospitals on the Big Island (North Hawaii Community Hospital, Hilo Medical Center, Kona Community Hospital), three hospitals on Oahu (Pali Momi Medical Center, Kaiser Foundation Hospital, Kuakini Medical Center) and one on Maui (Maui Memorial Medical Center) will have their payments cut by less than 1% as a penalty for a high number of patients returning to the hospital after discharge.

The annual deductions have been conducted since 2012 to incentivize hospitals to improve patient care as part of the Affordable Care Act.

The Centers for Medicaid and Medicare’s Readmission Reduction Program penalties are based on discharges during a prior three-year period, which means some hospitals may be hit with a penalty even if they show a year-over-year improvement in reducing readmissions. Penalties on more than 2,500 hospitals nationwide will amount to about $563 million over the course of the 2020 fiscal year which ends Oct. 31.

Medicare considers patients who return to the hospital within 30 days as an unnecessary visit, even if they go to a different hospital. The penalty is applied to the original hospital.

Most penalties to Hawaii hospitals are far below the average penalty of 0.71%.

Kaiser, for example, received a penalty of 0.07% for fiscal year 2020, based on its rate of readmission of 15.2%, which is nearly equivalent to the national re-hospitalization average.

Laura Lott, the spokeswoman for Kaiser Foundation Hospital in Honolulu, said the Moanalua hospital works to avoid unnecessary re-admissions by following up with patients by phone within 72 hours of discharge. The hospital also books follow-up appointments with the patient’s primary doctor.

“Every patient is unique and it’s the ability of our patient care coordinators and social workers to talk to the families and ask things like, ‘Does aunty have help at home? Does she have stairs?'” she said. “It’s looking at each individual’s needs and risks and trying to address those.”

Cindy Kamikawa, the president of North Hawaii Community Hospital, an affiliate of The Queen’s Health Systems, said the hospital has worked to reduce the rate of readmissions since the most recent reporting period in 2018, but did not disclose its numbers. The Kamuela hospital received a 0.22% penalty and a 0.35% penalty for fiscal years 2019 and 2020.

“We are committed to timely investigations to address any issues and are always looking for ways to improve how we deliver care,” Kamikawa said.

Four Hawaii hospitals have been dinged with a slight penalty six years in a row because of excess re-hospitalizations: Kona Community Hospital, Pali Momi Medical Center, Maui Memorial Medical Center and Kuakini Medical Center.

Pali Momi health center.
Pali Momi Medical Center was one of four Hawaii hospitals that have received slight payment deductions from the federal government for readmissions for the past six consecutive years. Penalties are less than 1% of typical reimbursements. Cory Lum/Civil Beat/2019

Others hospitals have shown improvement: Medicare has reduced the size of its penalties to some hospitals including Kuakini and Maui Memorial.

Payment deductions to Kuakini Medical Center have decreased from 0.30% in 2015 to 0.01% in 2020, signaling improvement in its readmissions rate.

Donda Spiker, Kuakini spokeswoman, said about three-quarters of the hospital’s patients are seniors on Medicare.

“We have a collaborative relationship between the health care team, caregivers and patients after discharge from the hospital,” she said. “The health care team members will make  follow up calls just to check up on them.”

Hospitals such as The Queen’s Medical Center, Wahiawa General Hospital and Adventist Hospital have reduced readmissions enough to avoid a penalty altogether for the past couple of years.

Wahiawa General Hospital 2nd floor Kaiser Long Term care room.
Some Hawaii hospitals have reduced their readmissions rates enough to avoid penalties altogether. Cory Lum/Civil Beat/2019

CMS penalizes the top quarter of the largest general hospitals with excess readmissions related to certain conditions such as heart failure or pneumonia. Hospitals that care specifically for veterans, children and psychiatric patients and those in critical geographic areas are exempt from the penalties.

The federal agency revised its process last year to be more forgiving to hospitals that serve a higher proportion of low-income patients. Rather than comparing readmission rates among all hospitals, the agency switched to judge hospitals compared to others with similar patient demographics.

The federal health agency also keeps track of high rates of hospital-acquired conditions such as surgical site infections and urinary tract infections, and issues annual payment penalties.

Wahiawa General Hospital and North Hawaii Community Hospital were fined in 2019, and payment penalties related to hospital-acquired conditions for 2020 will not be made public until hospitals file for reimbursement.

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