Reference no: EM132999580

You are the CEO of a 300-Bed hospital in Miami, Florida. Your Chief Financial Officer (CFO) has just informed you that Medicare has penalized your hospital just over $2 million dollars in the calendar year 2017 because your hospital has taken a significant number of readmissions (within 30 days of discharge) back to your hospital. You have learned that all penalties for these readmissions were related to 3 primary diagnoses: Congestive Heart Failure (CHF) - $600,000 Myocardial Infarction (Heart Attack) - $800,000Pneumonia - $700,000You have also learned that Medicare is increasing the penalty rate from 3% to 6% and the number of diagnoses from 3 to 6, beginning on January 1, 2019. Your board of directors are extremely upset over the situation as they now fear the hospital is in serious financial jeopardy due to these readmissions issues. In addition, the board of trustees is aware of the payment shift from fee-for-service billing to value-based care. They are VERY worried about how this will affect your hospital for two reasons. First, many of the board members work in other industries and are not sure what or why this is happening. Second, they need to understand how this major shift in reimbursement will affect the hospital operations and financial sustainability going forward.

1) Please investigate (research) and define the parameters of each issue and how they relate to your hospital.

2) Do you think these two issues are related? If so, why and how?