Last year, nearly 18 percent of Medicare patients who had been hospitalized were re-admitted within a month. While that is lower than past years, roughly 2 million patients return a year, costing Medicare $26 billion. Officials estimate $17 billion of that (65%) comes from potentially avoidable re-admissions.

Nationwide, many hospitals are losing money. Having to pay Medicare penalties simply adds to their financial losses. According to a Kaiser Health News analysis of the penalties, all but one hospital in New Jersey will lose money this year. So will a majority of hospitals in 28 other states, including California, Florida, Georgia, Illinois, Massachusetts, New York, Ohio, Pennsylvania, Tennessee and Texas, as well as the District of Columbia. In total, Medicare levied penalties against 433 more hospitals than it did last year.

Are these penalties unfair?

Medicare lowers payments to hospitals even if they have reduced their re-admission rates from the previous year — so long as their rate is still higher than what the government believes is appropriate for that hospital. (However, it is very difficult to establish a nationwide standard here.) Medicare uses the national re-admission rate to help decide what are appropriate rates for each hospital. This year-year comparison may help hospitals to reduce their fines from previous years or avoid them altogether. However, hospitals must not only reduce their re-admission rates, but they are also compared to the overall industry performance.

Medicare officials consider the competition good motivation for hospitals to maintain focus on tackling re-admissions and not to become complacent with their improvements.

Home Care services provide the infrastructure to enable patients to remain at home, with safety, security, and monitoring of their individual care plans, which avoids costly hospitalization and re-admittance.

– John D. Miller is the founder/owner of Home Care Partners, LLC, a Massachusetts business providing private duty, personalized in-home assistance and companion care services to those needing help in daily activities and household functions. He can be reached at: (781) 378-2164; email: ; or online at: