January Medicaid inpatient rates reflect new HCA readmissions policy

January 7, 2016

Medicaid inpatient hospital payment rates for Washington hospitals paid on the prospective payment system now incorporate penalties based on “excessive” rates of hospital readmissions. A number of hospitals will see small reductions in payment because of this change – with penalties ranging from 0.0 percent to a maximum of 1.0 percent. The new policy from the Health Care Authority penalizes hospitals that appear to have an excessive number of potentially preventable admissions, based on an HCA analysis using 3M Corporation software. It replaces a prior policy that simply denied payment for some readmissions based on a review of claims.

A few weeks ago, HCA sent hospital CEOs and administrative contacts a summary comparing their potentially preventable readmissions (PPR) to an expected number based on their mix of cases, and the amount of the payment penalty. HCA will also be sending additional information. The intent of the new HCA policy and reports is to encourage hospitals to work actively on reducing preventable readmissions. WSHA is preparing a more comprehensive bulletin regarding the program which will be sent to hospital members in the next week or so. (Andrew Busz)


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