April 18, 2019
2 min read

Hospital Readmission Reduction Program led to shift in excess readmission penalties

You've successfully added to your alerts. You will receive an email when new content is published.

Click Here to Manage Email Alerts

We were unable to process your request. Please try again later. If you continue to have this issue please contact customerservice@slackinc.com.

karen Joynt maddox headshot
Karen E. Joynt Maddox

Published results showed a significant shift in penalties for excess readmissions when hospitals were stratified under Medicare’s Hospital Readmission Reduction Program.

“Medicare’s recent change to the [Hospital Readmission Reduction Program] HRRP, which shifted from comparing all hospitals against one another to comparing hospitals only against others in their ‘peer group’ based on poverty levels, led to significantly lower penalties for safety-net hospitals,” Karen E. Joynt Maddox, MD, MPH, lead author of the study and assistant professor at Washington University School of Medicine, told Healio.com/Orthopedics. “We project that the safety net will incur more than $22 million less in penalties in 2019 under the new rules.”

Using publicly available data on hospital penalties merged with information on hospital characteristics and state Medicaid eligibility cutoffs, Maddox and colleagues performed a cross-sectional analysis of 3,049 hospitals participating in the Hospital Readmission Reduction Program in fiscal years 2018 and 2019. Main outcome measures included performance on readmission as measured by the excess readmissions ratio, as well as penalties under the HRRP both in relative percentage change and in absolute dollars.

Results showed a range in the mean proportion of dually enrolled beneficiaries from 9.5% in the lowest quintile to 44.7% in the highest quintile. After stratification, researchers found changes in penalties at the hospital level ranged from an increase of $225,000 to a decrease of more than $436,000. Researchers noted an increase of $12,330,157 in penalties among hospitals in the lowest quintile of dual enrollment and a decrease of $22,445,644 among hospitals in the highest quintile of dual enrollment.

Results showed a higher odds for receiving a reduced penalty among teaching hospitals and large hospitals. Researchers noted penalty reductions were less likely among not-for-profit hospitals compared with for-profit hospitals, but more likely among hospitals with patients from the most disadvantaged neighborhoods and those with the highest proportion of beneficiaries with disabilities. Hospitals in states with the highest Medicaid eligibility cutoffs were also more likely to see a reduction in penalties, according to results.

“The change in the HRRP is a major shift in how CMS thinks about value-based payment programs and made this controversial program significantly fairer for hospitals that serve the more vulnerable patients,” Maddox said. “This is the first time that a program has explicitly taken social risk into account like this, even though there has been strong evidence linking poverty with poor outcomes for a long time.” – by Casey Tingle


Disclosures: Joynt Maddox reports she performed intermittent contract work for HHS, Office of the Assistant Secretary for Planning and Evaluation. Please see the full study for a list of all other authors’ relevant financial disclosures.