By Briana Vannozzi
Correspondent
One out of every seven hospitals across the country will be hit with a 1 percent cut to their Medicare payments this year as part of a government crackdown on medical errors. Many of New Jersey’s highly regarded hospitals make that list because of high rates of hospital-acquired infections and avoidable injuries.
Twenty-three or 37 percent of the state’s hospitals will see a drop in aid. Only four other states ranked worse with higher penalty percentages — Utah, Connecticut, Nevada and the District of Columbia.
“This came out of the Affordable Care Act — Obamacare. There are a number of Medicare initiatives with the common theme that are aimed at reducing costs by making care better,” said Joel Cantor, director for the Center for State Health Policy at Rutgers University.
The penalties are based on three measures — the frequency of patients with central-line bloodstream infections, catheter-associated urinary tract infections and a combination of eight other conditions. Medicare gave each hospital a score based on those numbers. Those in the top quarter got a penalty.
“We’re starting to see a change in the way patients are cared for, in a much more cost conscious way and quality conscious way for Medicare and for other payers as well,” Cantor said.
Cantor explains the ACA’s first big policy change to improve hospital results was felt in the readmission reduction program — penalizing hospitals with patients who came back within a month. It led to an immediate decrease — about 17 percent.
This data comes on the heels of hospitals showing good signs of improvement. Last year New Jersey had a reduction of just over 32 percent in hospital acquired conditions and that saved the state more than $100 million. But as experts point out, it also came during a wake of excessively high numbers.
“Errors in hospitals have been persistent and stubbornly high. Hospitals have been working on reducing them for a long time and New Jersey hospitals have done pretty well,” said Cantor.
In total, the penalties are estimated to reach nearly $373 million. Critics of the system say the fines are given to a fixed percentage of hospitals, even if they’ve shown improvements. But Cantor believes the strategies are effective.
“They do tend to focus the hospitals on the issue because it’s not just losing the money, it’s the symbolic nature of having a penalty and it hurts their reputation and looks bad, so it’s a good motivator,” he said.
Hospitals will have to wait to see just how big an impact the cuts will make. Between all the reduction programs, they could cost institutions more than 5 percent of Medicare reimbursements this year.