Understanding Medicare Hospital Readmission Rates And Differing Penalties Between Safety-Net And Other Hospitals

Abstract

Since the implementation of Medicare's Hospital Readmissions Reduction Program in 2012, concerns have been raised about the effect its payment penalties for excess readmissions may have on safety-net hospitals. A number of policy solutions have been proposed to ensure that the program does not unfairly penalize safety-net institutions, which treat a disproportionate number of patients with low socioeconomic status. We examined the extent to which the program's current risk-adjustment factors, measures of patient socioeconomic status, and hospital-level factors explain the observed differences in readmission rates between safety-net and other hospitals. Our analyses suggest that patient socioeconomic status can explain some of the difference in readmission rates but that unmeasured factors such as hospitals' performance may also play a role. We also found that safety-net hospitals have experienced only slightly higher readmission penalties under the program than other hospitals have. Together, these findings suggest the need for a careful evaluation of policy alternatives that factor socioeconomic status into penalty calculations for excess readmissions to determine whether such alternatives could have a significant impact on penalties while remaining consistent with overall objectives for delivery system transformation.

ACOs Serving High Proportions Of Racial And Ethnic Minorities Lag In Quality Performance

“…Research on hospital readmissions penalty programs, for example, has shown that the readmissions penalty has similar issues to those highlighted here, where a portion of variation in readmissions (and associated penalties) can be attributed to unadjusted differences in patient population;(23) and numerous alternative rewards schemes have been proposed that would remedy these potentially unintended and undesirable consequences. Similar in-depth work on ACO quality measures and performance payment may be helpful to ensure that CMS is promoting both quality and equity.…”

“…(23) In this paper, we used data on Medicare ACO performance to examine how ACO quality and cost performance are associated with the share of an ACO’s patients that are minority. We also used data on ACO performance and characteristics from a national survey to assess the association between patient racial composition and performance, controlling for patient and provider level characteristics.…”

Impact of the Hospital Readmission Reduction Program on Surgical Readmissions Among Medicare Beneficiaries

“…First, by using administrative claims data we may not fully capture the circumstances around a readmission to appropriately risk-adjust rates for hospitals. Several important readmissions studies have identified disparities 15,19 , systems 20 and socioeconomic factors 18,21 not currently included in our risk-adjustment models. Although the Centers for Medicare and Medicaid Services is considering modification to their risk-adjustment methodology 22,23 , we chose to use the same risk-adjustment framework currently in place to make out findings consistent with other studies assessing also examining Hospital Readmissions Reduction Program in Medicare claims data 3,13–15,19,24 .…”

Impact of Provider Incentives on Quality and Value of Health Care

“…The primary concern is that hospitals that treat more disadvantaged patients are disproportionately penalized (44,56,81,90). One study estimated that safety net hospitals are more than twice as likely to be penalized under the HRRP (44).…”