Most Hospitals Received Annual Penalties For Excess Readmissions, But Some Fared Better Than Others

Abstract

The Hospital Readmissions Reduction Program (HRRP) initiated by the Affordable Care Act levies financial penalties against hospitals with excess thirty-day Medicare readmissions. We sought to understand the penalty burden over the program's first five years, focusing on characteristics of hospitals that received penalties during all five years, how penalties changed over time, and the relationship between baseline and subsequent performance. More than half of participating hospitals were penalized by the Centers for Medicare and Medicaid Services in all five years of the program. From fiscal years 2013 to 2017, the growth in average penalties was modest, doubling from 0.29 percent to 0.60 percent, despite increasing opportunities for penalization. The penalty burden was greater in hospitals that were urban, major teaching, large, or for-profit and that treated larger shares of Medicare or socioeconomically disadvantaged patients. Surprisingly, hospitals treating greater proportions of medically complex Medicare patients had a lower cumulative penalty burden compared to those treating fewer proportions of these patients. Lastly, we found that hospitals with high baseline penalties in the first year continued to receive significantly higher penalties in subsequent years. For many hospitals, the HRRP leads to persistent penalization and limited capacity to reduce penalty burden. Alternative structures might avoid persistent penalization, while still motivating reductions in hospital readmissions.

How Have 30-Day Readmission Penalties Affected Racial Disparities in Readmissions?: an Analysis from 2007 to 2014 in Five US States

“…In addition, the finding that by the end of our study period safety-net and highly penalized hospitals had lower disparities and, in the case of highly penalized hospitals, lower adjusted readmissions among Black patients than their counterparts suggests that this is not simply the case that hospitals that had the most room for improvement improved the most. On the other hand, of considerable concern is that safety-net hospitals have continued to receive higher penalties even though they have reached a major national policy goal (essentially eliminating disparities), 8 while hospitals that continue to have large disparities face much lower penalties.…”

“…7 This has been a particular concern to policymakers since safety-net and teaching hospitals are much more likely to be penalized under the HRRP. 8,9 Thirty-day hospital readmissions have been associated with a variety of patient-related factors including medical complexity and sociodemographic factors. 10,11 Previous research has also shown that there are significant racial disparities in readmissions, even after adjusting for comorbidities.…”

Medicare Payment Penalties and Safety Net Hospital Profitability: Minimal Impact on These Vulnerable Hospitals

“…; Sheingold, Zuckerman, and Shartzer ; Thompson et al. ). This higher penalty burden has raised concern that risk adjustment methods employed by the HRRP and VBP may not adequately account for the complexity and costs of treating socioeconomically vulnerable patients and, thus, lead to excessive financial penalties for hospitals treating these populations (Gilman et al.…”

The association of hospital teaching intensity with 30‐day postdischarge heart failure readmission and mortality rates

“…The most significant concern is the possible negative impact of the HRRP program on mortality, specifically for heart failure. Depending on the data source, statistical methodology for studying longitudinal trends and their association with the HRRP, and level of analysis (hospital vs aggregate national results), different studies have reached discordant conclusions regarding this crucial question …”

“…Consistent with earlier predictions, a Kaiser Family Foundation report found that teaching hospitals have consistently had the largest proportion of programs penalized and the highest average penalties for the first 5 years of the program . Thompson et al found that between 2013 and 2017, major teaching hospitals, urban hospitals, and medium‐to‐large hospitals were more likely to be persistently penalized for all five of those years. Paradoxically, teaching hospitals have also consistently been shown to have superior mortality rates for index conditions including heart failure …”