"Reining in Readmissions" in February incorrectly summarized the readmission provisions in the Patient Protection and Affordable Care Act. Here is what the law contains:

Beginning in FY 2013, PPS hospitals with higher-than-expected readmissions rates will experience decreased Medicare payments. Hospital performance will be evaluated based on the 30-day readmission measures for heart attack, heart failure and pneumonia that are currently part of the Medicare pay-for-reporting program and reported on Hospital Compare. The ACA requires the Centers for Medicare & Medicaid Services to modify the measures to exclude planned readmissions, as well readmissions that are unrelated to the first admission.

Critical access hospitals and post-acute care providers are excluded from the provision, as are hospitals that CMS determines have only a small number of applicable patient cases. CMS will calculate hospitals' actual readmission rates and compare them to hospitals' expected readmission rates. Those hospitals with higher than expected readmission rates will be required to pay back to the Medicare program the payments they received for those readmissions deemed to be excessive. To recoup the money, CMS will determine an adjustment factor for each hospital with excessive readmissions that will decrease the hospital's Medicare payment rate across all discharges. There is a ceiling as to how large the reduction can be. In FY 2013, the reduction cannot be greater than 1 percent. In FY 2014, it cannot be larger than 2 percent, and in FY 2015 and beyond, it cannot be greater than 3 percent.

Beginning in FY 2015, CMS may expand the list of conditions to include chronic obstructive pulmonary disorder and several cardiac and vascular surgical procedures, as well as any other condition or procedure the agency deems appropriate. The ACA directs CMS to seek endorsement from the National Quality Forum for all measures used to assess readmissions performance; however, the agency has the discretion to proceed without receiving endorsement.

CMS has not yet indicated when it will publish a proposed rule detailing the readmissions payment penalty. The American Hospital Association will provide more information when a proposed rule is released.

To help those hospitals with high readmission rates take action to reduce any inappropriate readmissions, a quality-improvement program was included in the ACA. Under the program, hospitals that CMS determines to have a high readmission rate will be eligible to participate in a voluntary program with a patient-safety organization. Hospitals will be expected to implement processes to reduce their readmission rates. The program will begin by March 23, 2012, two years after the enactment of the ACA. The AHA says it will provide more information on the program when it is available.