This Robert Wood Johnson Foundation-Health Affairs policy brief describes the Medicare Hospital Readmissions Reduction Program. In 2009, the Centers for Medicare & Medicaid Services (CMS) began public reporting of hospital readmissions rates. However, prior to the enactment of the Patient Protection and Affordable Care Act (ACA) in 2010, Medicare hospital payment policies may have inadvertently contributed to high readmission rates because Medicare had paid most hospitals a fixed cost per admission (regardless of cause), and providing no financial reimbursements for post-discharge follow-up and other services that could reduce readmissions. Beginning in October 2012, the Hospital Readmissions Reduction Program imposes penalties for “excess” or avoidable hospital readmissions in the Medicare program. Next year, the program will be expanded to include two additional conditions: elective hip or knee replacement, and congestive obstructive pulmonary disease.
The brief describes some of the interventions being implemented by hospitals to reduce readmissions. CMS reported in February 2013 that the all-cause Medicare readmission rate in the last quarter of 2012 (when the penalties first were imposed) had decreased from 19% to 17.8%, with approximately 70,000 fewer readmissions. Over 2,200 hospitals were penalized $280 million for their excess readmissions. However, hospitals serving the lowest income patients were not only more likely to incur a penalty, but also more likely to insure the maximum (1%) penalty.
Although there is widespread support for the goals of the program, some policymakers and industry leaders have questioned whether hospitals are being treated fairly, particularly those hospitals that care for the sickest and most vulnerable patients. The brief also explains some of the suggested changes to the program, such as adjusting how penalties are computed, and how patients’ socioeconomic status can be taken into account in establishing “expected” and “excess” rates of readmissions.
Over time, hospitals will continue to experiment with various strategies for reducing readmissions. One consequence of the program may be a growing recognition that reducing readmissions is a shared responsibility that belongs not only to hospitals, but also to patients and their caregivers and to other community professionals and providers across the continuum of health and social services.
Ignatius Bau 