Hospital Readmissions Reduction Program: Present Challenges and Future Refinements

October 18, 2017 | Moustafa Elsheshtawy, MD

The morbidity, mortality and cost associated with hospital readmissions, especially in the Medicare population, is a growing concern. The Centers for Medicare and Medicaid Services (CMS) has implemented many initiatives to reduce hospital readmission rates, including the Hospital Readmissions Reduction Program (HRRP).

HRRP is a result of the Medicare report "Promoting Greater Efficiency in Medicare," initially put forth to Congress in 2007 by CMS. HRRP was then established as an addition to section 1886(q) of the 1965 Social Security Act in 2012. Under this provision, hospitals with relatively high risk-standardized readmission rates (i.e. those hospitals with higher readmission rates compared to the national average rate) are penalized with a reduction across all of their Medicare payments, not just those related to the readmissions being measured.

Although CMS collects the data for all the readmission rates, HRRP only measures readmissions occurring after initial hospitalizations for specified conditions – namely, acute myocardial infarction, heart failure, coronary artery bypass graft, pneumonia, chronic obstructive pulmonary disease and elective hip or knee replacement. The HRRP defines readmission as any hospital stay within 30 days of discharge from the initial hospitalization, regardless of the readmission reason (also called the "All-Cause" rule). Thus, since the program's launch in 2012, many hospitals have been penalized for readmissions due to either unrelated conditions to the prior hospitalization or an elective planned procedure. Based on feedback and lobbying efforts, the HRRP definition was adjusted to omit elective planned hospitalization within the 30-day window of initial hospitalization from the readmission rate calculation.

While HRRP aims at promoting hospitals' performance to match or exceed the average national hospital standards, HRRP modules face many challenges that need to be resolved. CMS lacks risk adjustment for key sociodemographic factors including race, ethnicity, patients' compliance and comorbidities requiring frequent hospitalizations among others. Socioeconomic factors are likely to influence the readmission rate and are usually outside of a hospital's control. Consequently, hospitals with relatively higher proportions of low-income patients are more likely to incur penalties than others. The National Quality Forum published a report recommending that policymakers include sociodemographic factors in measuring hospital readmission rates. Failure to do so can lead to incorrect conclusions about care quality, resulting in further penalties to hospitals providing care to a larger portion of disadvantaged patients.

During HRRP implementation period between 2012 – 2014, data showed declines in both medical and surgical readmissions. However, as HRRP is expanding to include more eligible diagnoses for the first episode of care, the total penalties imposed across all hospitals are estimated to increase. Since CMS decision on hospital penalties follows a national curve, all hospitals below the national readmission rate mean will always be penalized when applying this model. Many lawmakers are advocating that the penalty assessment be based on fixed targets rather than the relative hospital performance.

At the end of the day, while HRRP incentivizes hospitals to improve their health care outcomes and lower their rate of preventable readmissions, its role should not lead to the reduction of resources to the lower performing hospitals providing the majority of care to those lower socio-demographic Medicare beneficiaries – impacting their delivery of health care.

This article is authored by Moustafa Elsheshtawy, MD, Fellow in Training (FIT) at Maimonides Medical Center in Brooklyn, NY.