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UMass Memorial Losing Millions for Readmission Penalties

Friday, November 23, 2012


Worcester’s UMass Memorial Hospital has the highest readmission rate of any hospital serving the area, costing them millions in penalties from Medicare.

The complete list includes acute care hospitals all over Massachusetts, including Springfield and Boston, but when compared to all of the Worcester-area hospitals, UMass Memorial tops the list, receiving the most penalties, said David Schildmeier, director of communications at the Massachusetts Nurses Association (MNA).

“UMass Memorial is right below the highest, closest to one percent – the highest penalty you can receive. It’s in the top ten as far as performing the worst,” he said.

Schildmeier said that the group estimates that UMass Memorial is losing big to Medicare.

UMass Memorial’s Responsibility

Schildmeier laid the blame on UMass Memorial for its less than satisfactory care, but the hospital maintains that they are still committed to delivering quality care to their patients.

“This hospital is a major provider in Central Mass and is the worst right now at providing good care. These guys are doing a horrible job, and it’s only going to get worse if they continue to cut staffing,” he said.

Raking in the Profits

While hospitals are suffering large penalties for their readmissions, Schildmeier said that readmitted patients were originally a way for a hospital to make twice the money off of one patient.

Medicare brought down these charges, which act as a disincentive for hospitals to readmit the same patient.

Elderly patients account for the majority of patients a hospital receives, and Schildmeier said that, “For years they harmed and mistreated patients with no penalty. If grandma went into the hospital with pneumonia and contracted an illness or got an infection while she was there, or didn’t get proper care, hospitals were getting two times the money.”

“The government said they’re not paying for bad care. When grandma goes back to the hospital because you’re not doing what you’re supposed to, the hospital gets fined,” he said. “They decided to not compensate for readmissions, and if it happens too much, they take an across the board penalty of one percent of your revenue, based on number of readmissions.”

The Figures

UMass Memorial came closest to the 1 percent maximum penalty, with a 0.95 percent mark. The closest hospital behind them was Marlborough Hospital at 0.91 percent.

Heywood Hospital in Gardner, Harrington Memorial Hospital in Southbridge, and Clint Hospital Association also made the list above 0.50 percent for their penalties.

Worcester’s Saint Vincent Hospital was the second lowest in the area, with 0.31 percent, with Healthalliance Hospitals, Inc. in Leominster topping the local list at 0.20 percent penalties.

Medicare began these penalties in October of this year, beginning a wide movement that included over 2,000 hospitals nationwide.

The maximum penalty will increase after this year, to two percent of regular payments starting in October 2013 and then to three percent the following year. This year, the $280 million in penalties comprise about 0.3 percent of the total amount hospitals are paid by Medicare.

What Sends Patients Back to the Hospital

Schildmeier said that UMass Memorial’s high penalty is due to their poor staffing, something the MNA has been speaking out about for weeks. Their union is in favor of the penalties to keep hospitals from trying to cut corners.

“If grandma got something due to being there with poor care, the hospital then received money after sending the patient home and coming back in. For years hospitals were getting away with this with twice the money,” he said. “Studies have shown that this readmission is resulting from bad care, which is directly linked to poor staffing.”

The Massachusetts Nurses Association is currently locked in a disagreement with the hospital over pension and staffing after UMass Memorial cut over one hundred jobs in September.

“We support it because one reason patients get readmitted is that they’re not getting proper nursing care. You can have the best surgeon in the world – and UMass does have some of the best there – but do you have nurses there to get in to change and access that wound and clean it properly?” Schildmeier said. “If any of those things don’t happen, no matter how perfect the operation was, you could have higher readmission numbers.”

Schildmeier added that “nurses are the teachers.”

“It’s the nurse’s job to go through the instructions and explain to you or someone with you how to be prepared. That’s something we see when a hospital is poorly staffed – there are no patient teachings – it goes out the window,” he said.

A Decision to Make

Schildmeier says that UMass Memorial’s budget issues are only going to “exacerbate the problems we’re seeing.”

“They’re cutting staffing to save money, but in doing that, they’re going to up the penalties they receive,” he said. “It’s cost inefficient. It’s a bad business decision. Either you cut costs and face the penalties, or you do the right thing. They’ll save millions,” he said, estimating that the hospital has probably lost millions from poor care.

He and the MNA believe that if UMass Memorial pays more attention to their staffing levels, the amount they spend will be less considering the amount they pay in Medicare fines. 


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Iron Mike Farquhar

Isn't it reassuring to have administrators and bureaucrats making your medical decisions – instead of those selfish 'doctors', - who would chop off your parts for a few extra bucks?

Don Carlos


Edward Saucier

Rational people know the fix for this problem but the fix is what people call socialism. That's a bad word even though the other industrialized nations use it, and it works! Surprise, surprise! But we can't do it because we're Americans and we're special. We never follow the examples of others even though it hurts us. American exceptionalism is an oxymoron.

Iron Mike Farquhar

Oh please, tell us Ed, which socialist example you'd have us follow!

There are so many examples to choose from:

- Hitler's NAZI socialism,
- Mussolini's version,
- Franco's version,
- Lenin / Stalin's version,
- Mao's version,
- Castro's version,
- Hugo's version,...
...or...would you like the kind they have in France, Italy, Greece, Spain, Portugal, and Ireland?

Which past or current version do you think works the best?

Edward Saucier

Mike you sound like you quit grammar school in the third grade and went to work in a shoe factory.

Christopher Pinto

UMASS medical has been on the decline ever since McGovern et al crammed Obama care down America's throat via a nasty parliamentary trick

Be sure to thank them each and every time you hear bad news about our healthcare system

Iron Mike Farquhar

Aw Chris, you mean those 2300+ pages of regulations, rules, and new taxes – and those 159 NEW FEDERAL AGENCIES created by ObamaCare – aren't making us all healthier? For LESS money?

Then what ARE they doing?

Christopher Pinto

Threwout history whenever a new dictatorial regime seizes control of a country the first thing they takeover is the healthcare system. No exceptions here.

Legislating via executive fiat and parliamentary tricks is their trademark.

Christopher Pinto

Throughout* history

I Agree With Jamie Blair

If you think that Obamacare is responsible for UMassMemorial's decline, you are sorely mistaken. Those policies don't even go into effect until 2014.

Once they do go into effect, UMass will suffer even more. The downside of our health care system has long been that the sicker you are, the more your doctor and hospital make - hence why costs are out of control. Your doctor doesn't make cures... he makes customers. Obamacare changes this by providing flat rates for patient care, with incentives for getting you better and keeping you well. Hospitals that have high readmission rates will be penalized even more under Obamacare, and rightly so.

Obamacare isn't the hospital killer - just look at Steward and Partners. These two organizations have spent the last 3 years overhauling their business models to accommodate the changing health care environment. Both are focusing more on home care, local care, and preventive care. Both are growing and expanding rapidly, both are profitable, and both have seen a dramatic increase in the levels of patient care and wellness over the last three years.

Meanwhile, what has Umass been doing? Spending $50,000 a week to hire a modeling agency to sign up gullible dudes to be bone marrow donors, then billing their insurance $1000 for a $25 test. Avoiding doing double-procedures since they can admit you twice for doing them separately. They spend more money on their legal team to find loopholes to make a buck than they do on maintaining appropriate staffing levels.

So please spare us the garbage about Obamacare destroying UMass. What has destroyed UMass is crappy management who was always focused on how to make money NOW as opposed to finding ways to remain sustainable. And what's the most telling sign? The multi-millionaire CEO of UMass (who is a business man, not a clinician) presided over some extraordinarily large surplusses at UMass... yet resigns and leaves the year they are expected to drop into the red.

Rats flee a sinking ship. Go to some of your local job searching sites, and you will see two HUGE hospitals that simply can't hire people fast enough: Partners and Steward. So if Obamacare and everything under the sun is causing Umass to fail, why isn't it having that same impact across the board? Something ain't right over there... and (as much as I normally disagree with organized labor), the MNA actually hit the nail on the head this time.

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