Colorado hospitals were less likely to be hit by Medicare penalties for having too many patients boomerang back than were all U.S. facilities, though close to one in three will still get less money from the federal government next year.

The penalties, which have been levied for eight years, deduct a certain percentage from the payments a hospital receives from Medicare if their patients are more likely than average to need hospital care again quickly.

In 2022, 31 of the state’s 94 hospitals, or about 62% of Colorado’s facilities that are eligible for a penalty, will take one. Nationwide, about 80% will, said Akin Demehin, director of policy at the American Hospital Association.

Hospitals are exempt if they are critical access facilities, meaning the only hospital serving a rural area; serve a specialized population, such as children or people receiving psychiatric treatment; or treated fewer than 25 people for certain illnesses.

A few factors influence why more hospitals in some states would be penalized, Demehin said. Some hospitals attract patients with more-complex needs, and some are in areas where patients don’t have easy access to primary-care doctors for follow-up appointments, pharmacies to refill their medications or grocery stores to buy healthy foods, he said.

“Readmissions certainly have to do with the care you get in the hospital, but they also have to do with the resources in the community,” he said.

The Centers for Medicare and Medicaid Services calculate the expected number of readmissions for a hospital, attempting to control for how sick patients may be. They then determine how large the gap is between the expected readmissions and the number of people actually returning in 30 days. Hospitals are then compared to others that serve a similar percentage of people who are eligible for both Medicare and Medicaid — a particularly complicated group, because the vast majority are over 65 and have serious health problems. Those with bigger gaps, compared to their peer group, are penalized.

The higher a hospital’s readmissions are, compared to their group, the higher the penalty on their payments from Medicare, with a maximum deduction of 3%. None of the Colorado hospitals will take the maximum hit, and the median penalty in the state is 0.18% — meaning half will lose more in 2022, and half less.

The idea behind the penalties is to push hospitals to do more to stop patients from coming back with avoidable complications. That could mean having someone assigned to help set follow-up appointments, or talking about resources if they can’t afford medications or healthy food to manage their chronic conditions. Of course, not all rehospitalizations are avoidable, and it would be dangerous to tell patients to just not come back if they develop complications.

The penalties are based on how many patients unexpectedly returned in 30 days after being treated for a heart attack, heart failure, pneumonia, chronic obstructive pulmonary disease, a knee or hip replacement, or coronary artery bypass graft surgery. Planned readmissions (such as having a heart attack patient come back for surgery after they’ve recovered at home for a few days) don’t count against the hospital.

Readmission penalties are extremely common. Only three Colorado hospitals that aren’t exempt haven’t been dinged at some point: Mercy Regional Medical Center in Durango, Community Hospital in Grand Junction and OrthoColorado Hospital in Lakewood.

The number of hospitals penalized has increased over the years as CMS expanded its program from three conditions to seven. That meant more facilities were eligible based on at least one measure.

Colorado hospital readmission penalties

• 2015: 57% of eligible hospitals penalized; median penalty 0.1%
• 2016: 55% penalized; median 0.185%
• 2017: 58% penalized; median 0.11%
• 2018: 60% penalized; median 0.12%
• 2019: 76% penalized; median 0.105%
• 2020: 62% penalized; median 0.15%
• 2021: 74% penalized; median 0.13%
• 2022: 62% penalized; median 0.18%

Source: Kaiser Health News data