The new health care reform law places renewed emphasis on reducing hospital readmissions. Beginning in fiscal year 2013, the law imposes financial penalties on hospitals for so-called "excess" readmissions when compared with "expected" levels of readmissions for certain conditions.

Performance evaluation will be 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 the Hospital Compare website. Hospitals with Medicare readmission rates that are higher than expected will see a decrease in their Medicare payments.

The payment penalties will be based on the number of excess readmissions at the hospital, although there is a limit on how much a hospital can be penalized in a given year. The ceilings on the financial penalties are 1 percent in FY 2013; 2 percent in FY 2014; and 3 percent in FY 2015 and beyond. This reduction will apply to all Medicare discharges. Critical access hospitals, post-acute care providers and hospitals deemed to have low levels of Medicare admissions for the specified conditions are exempt.

Preventing unnecessary hospital readmissions is a complex, systemwide goal that involves hospitals, physicians and other providers who manage patients' care, as well as patients and their families. Hospitals play an important role in preventing unplanned admissions that are related to the initial admission, but other areas of the health care system also must do their part.

We know that hospitals have some ability to reduce unplanned readmissions if they understand what is causing them. The AHA seeks to help hospital leaders understand the reasons patients are readmitted and implement strategies to reduce readmissions. Its most recent resource, the Health Care Leader Action Guide to Reduce Readmissions, produced by the Commonwealth Fund, the John A. Hartford Foundation and the AHA's Health Research & Educational Trust. The strategies in this guide can help hospitals reduce avoidable readmissions across three stages of the care continuum: during hospitalization, at discharge and immediately following discharge.

Take a look, and share it with your fellow trustees. I'm sure you will find it an incredibly valuable tool for discussion at your next board meeting.

Stephen Smart, D.D.S. (, is COG chair and chair of Medical Center of South Arkansas in El Dorado, Ark.