Cancer nurse

Registered nurse Diana Boyle, right, works on a drip machine for a patient at Bozeman Health Deaconess Hospital in 2012.

Chronicle file photo.

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Medicare cut payments to nine Montana hospitals this week as part of a program that aims to drive hospitals to reduce how many patients return for a second stay.

That’s the most Montana hospitals penalized in one year for failing to meet the federal standard to avoid unnecessary readmissions, according to a Kaiser Health News analysis this week. There were 14 Montana hospitals measured in the data.

The Hospital Readmission Reduction Program was a ripple of the Affordable Care Act and built on the idea that hospitals need pressure to make sure patient care continues beyond hospital walls.

Those from the hospital industry have said providers are getting better at helping patients avoid unnecessary complications after they’re discharged and argued it may be time the program gets a rewrite.

“We are trying our best to reduce readmissions,” said Bob Olsen, senior vice president of the Montana Hospital Association. “You get better and better, then the standards get tougher and tougher.”

The penalties are based on how often Medicare patients are readmitted within a month after original treatment for heart failure, heart attack, pneumonia, chronic lung disease, hip and knee replacement or coronary artery bypass graft surgery. Scheduled readmissions don’t count.

Montana’s broad-sweeping penalties aren’t unique.

Of the 3,129 general hospitals evaluated in the Hospital Readmission Reduction Program, 83% received a penalty. Medicare estimates the cuts to hospitals will come to $563 million over a year.

Olsen said while more Montana hospitals face the penalty, the state’s overall financial hit is down.

He said last year, hospitals in Montana overall lost $590,000 due to the penalties. This year, the association estimates it will be closer to a total loss of $260,000. Olsen said that drop shows Montana hospitals are getting closer to the national threshold.

The penalty, which began this week, translates into a percentage decrease in payment for each Medicare patient who leaves the hospital over the fiscal year. All Montana hospitals fell below the national average of a .71% penalty.

Northern Montana Hospital in Havre had the largest hit with a .45% cut. Other Montana hospitals penalized include St. Peter’s Hospital in Helena, Bozeman Health, St. James Healthcare in Butte, Community Medical Center in Missoula, Kalispell Regional Medical Center, Benefis Hospitals in Great Falls and The Healthcenter in Kalispell.

It’s the first time the list includes a ding for Bozeman Health.

Dr. Mark Williams, Bozeman Health chief physician officer, estimated Bozeman Health’s .07% penalty will cost the system less than $100,000 over the year.

Williams said that comes after Bozeman Health made changes in recent years in how it discharges patients.

“We’ve embraced many of the practices we’ve learned — prompt follow-up with a physician, better discharge methods. We don’t see a lot of other options left,” said Williams, adding that leaves a question: “Has the value of this program kind of outlived itself?”

In an emailed statement Friday, a Centers for Medicare & Medicaid Services spokesperson wrote the program looks for ways to prevent readmissions “that are harmful to patients and costly to Medicare.”

The statement pointed to a 2018 Medicare Payment Advisory Commission report to Congress that found the Hospital Readmissions Reduction Program contributed to a decline in readmission rates that reflect a change in practice patterns, like improved care coordination.

Katy Peterson, also with the Montana Hospital Association, said part of hospitals’ challenge in the readmission program is that they don’t know what bar they’ll be measured against.

The Centers for Medicare & Medicaid Services determines the annual penalties by looking at national averages for each of the conditions.

“You could make pretty sweeping strides in improvements in making reductions and still see a penalty,” Peterson said.

But it’s not the hospitals’ only important measuring stick.

The association projects overall, Montana hospitals will receive $600,000 in bonus payments from the Centers for Medicare and Medicaid Services quality improvement programs.

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Katheryn Houghton can be reached at or at 582-2628. Follow her on Twitter @K_Hought.

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