Study links financial penalties to lower readmission rates

New research finds that hospitals penalized as part of the Hospital Readmission Reduction Program reduced 30-day readmissions by more significant margins than hospitals that weren't penalized.

Federal penalties do lead to lower readmission rates, a new study has found.

The research, published in the Journal of the American Medical Association, found that hospitals penalized as part of the Hospital Readmission Reduction Program (HRRP) reduced 30-day readmissions by more significant margins than hospitals that weren't penalized. The study team examined data from more than 48 million hospitalizations of Medicare beneficiaries at nearly 3,500 U.S. hospitals recorded between January 2008 and June 2015.

The penalized hospitals saw significant reductions in readmissions for targeted conditions like heart attack, pneumonia and heart failure. Readmission rates were stable for both types of hospitals between 2008 and 2010, when HRRP was first introduced, but once the program was launched, rates for both target and nontarget conditions dropped far more rapidly at hospitals that were later penalized, according to the study.

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The Centers for Medicare & Medicaid Services penalized half of U.S. hospitals for readmission rates this year, and many of the hospitals penalized are large, teaching hospitals that are likely to admit Medicaid or Medicare patients. The penalties are controversial, and major professional organizations like the American Hospital Association have questioned the methods used to assess the data.

Nihar R. Desai, M.D., assistant professor of medicine at Yale School of Medicine and the study’s lead author, said in an announcement of the findings that the penalties likely shaped hospital response to excessive readmissions.

"We found that hospitals that were subject to penalties under HRRP had more significant reductions in readmissions than hospitals that were not penalized," he said. "In addition, hospitals that were subject to penalty also seemed to focus their efforts on reducing readmissions for conditions that were the basis of the penalty. In contrast, hospitals that weren't penalized seemed to reduce readmissions across all conditions."

A separate study on the effectiveness of HRRP penalties also concluded that hospitals with the worst performance before the passage of the Affordable Care Act improved most after the HRRP was implemented. The research, published in Annals of Internal Medicine, analyzed discharge data for more than 15 million Medicare patients hospitalized between 2000 and 2013 and found that additional readmissions were averted at hospitals in all performance levels measured after the establishment of the HRRP.

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