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Financial Incentives to Improve Quality Skating to the Puck or Avoiding the Penalty Box?

Jeremiah R. Brown, PhD1; Harold C. Sox, MD1; David C. Goodman, MD, MS1
[+] Author Affiliations
1The Dartmouth Institute for Health Policy and Clinical Practice, Geisel School of Medicine at Dartmouth, Lebanon, New Hampshire
JAMA. 2014;311(10):1009-1010. doi:10.1001/jama.2014.421.
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Wayne Gretzky once explained how he became a hockey player of genius: “I skate to where the puck is going to be, not where it has been.” Since the Affordable Care Act (ACA) enacted the Hospital Readmissions Reduction Program, hospitals have been ever more focused on playing to the puck to avoid financial penalties for high rates of early readmission. This Viewpoint examines the Hospital Readmissions Reduction Program as an example of similar initiatives by the Centers for Medicare & Medicaid Services (CMS) and discusses the increasing use of financial penalties for changing the behavior of hospitals.

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Change in Centers for Medicare & Medicaid Services (CMS) Payment Penalty From Fiscal Year 2013 to 2014 by US Hospital

Data are provided by the Hospital Readmissions Reduction Program—Supplemental Data (fiscal year 2013 and 2014 Hospital Inpatient Prospective Payment Systems (IPPS) Proposed Rule).3 The change in penalty is calculated by the difference between fiscal years 2013 and 2014. A negative value representing a reduction in the percent of CMS reimbursement penalty. A value of 0.00% represents hospitals without a change in penalty from 2013 to 2014. A positive change represents a more severe penalty or first-time penalty, such as a hospital receiving the maximum penalty in 2013 of 1.00% to 2.00% in 2014.

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