OpenPlacement Blog

The Effect of CMS 30 Day Readmission Policies on California Patients and Hospitals

In 2010 the Affordable Health Care Act was enacted and the process of moving toward full implementation of the Act began. In 2012, the CMS 30 Day Readmission Policy began to be enforced, penalizing thousands of hospitals for readmission of certain patients within a 30 day period. According to, penalty applies to readmissions of patients who had previously been admitted with Acute Myocardial Infection, Heart Failure, or Pneumonia. This penalty, a reduction in reimbursement by Medicare, up to 1%, cost hospitals hundreds of thousands of dollars but some assert that the goal of the policy, to improve follow up healthcare by hospitals to prevent necessary returns by patients, is being achieved as the percentage of readmissions nationwide dropped to 17.8% from the stagnant 19% it had been for several years.

The number of expected readmissions is based on a comparison with readmissions performance on a national scale and is calculated using a “risk adjustment methodology endorsed by the National Quality Forum,” according to CMS, the Centers for Medicare and Medicaid Services. In California, according to Kaiser Permanente's listing of penalty percentages for each hospital in each state, only 100 hospitals, out of 305 hospitals in California were not penalized at all by Medicare in 2012. This statistic means that 67.3% of hospitals in California were penalized in the range of .01% up to the maximum of a 1% reduction in Medicare reimbursements.

Some hospitals in California that have been successful in meeting and exceeding reduction in readmission rates are UC San Diego and Scripps Mercy Hospital. Leaders at both of these hospitals accredit their follow up programs with patients for their successful readmission reduction.

Both hospitals have implemented programs that employ what they call “navigators” or “going home coaches.” These individuals, employed by the hospital, have the unique responsibility of following up with patients for an unlimited amount of time. The first follow up is an in-person after approximately 72 hours of discharge, and continues at least once a week by phone until patients have completed all necessary follow up, testing, and medications. The “navigators” or “coaches” help with any tasks from setting up follow up appointments with primary care physicians or specialists, ensuring that prescribed medications have been completed or are being maintained, and that any diagnostic tests that have been recommended have been completed as well.

With such programs as these two hospitals have implemented, quality of patient care is greatly increased and the chance of readmission is greatly reduced. Coaches ensure that patients receive the care that they need in order to prevent future hospital visits, thereby improving patient care and reducing hospital penalties.

Dr. James LaBelle of Scripps Mercy Hospital states, as quoted in the publication U-T San Diego, “All hospitals can, and should, do more to reduce readmissions,” and “We know that there are opportunities at every single hospital across the country to improve the discharge process.” However, there are those who are in opposition.

In the article Revised Readmissions Penalties to Affect Numerous Hospitals, on, Atul Grover, chief lobbyist for the Association of American Medical Colleges states, “It is not fair to tie hospital reimbursements to how patients receive care after they have been discharged.” Many others in the medical community agree, pointing to those hospitals that care for primarily low-income patients, and the somewhat limited ability of hospitals to dictate patient behavior once discharged.

Based on the reduction of readmissions since the start of the readmission policies by CMS, and the innovation of the post-discharge patient follow up models of hospitals like UC San Diego and Scripps Mercy Hospital, it appears that the policy is currently achieving its goal of reducing readmissions in California and nationwide and, in at least some situations, improving patient care. It remains to be seen how implementation of future increased penalties will affect hospitals, as well as whether low-income hospitals will be disparately affected by these changes. For now, however, it seems that the policy has inspired creative thinking by medical leaders in order to find new ways to improve follow up patient care in order to benefit both patients and hospitals.

About the Author

Christy Rakoczy has a JD from UCLA School of Law and an undergraduate degree in English Media and Communications from University of Rochester. Her career background includes teaching at the college level as well as working in the insurance and legal industries. She is currently a full-time writer who specializes in the legal, financial and healthcare sectors. Ms. Rakoczy writes online content as well as textbooks for adult learners.