To encourage reductions in the rate of costly readmissions, the Hospital Readmissions Reduction Program (HRRP) began penalizing hospitals in fiscal year (FY) 2013 for patients readmitted within 30 days of a discharge. But these cost-saving measures might have unintended consequences for hospitals treating the nation’s vulnerable patients.
As the HRRP enters its fourth year of penalties, many experts are starting to question its impact on essential hospitals—those that fill a safety net role in their communities.
A recent Harvard Medical School study found that current risk-adjustment strategies fail to control for many patient characteristics that put essential hospitals at risk for unfair penalties. This failure, according to experts, could cause hospitals treating a large proportion of low-income or minority patients to face penalties at an increased rate, further diminishing resources at hospitals that often operate at a loss.
In this new data brief, America’s Essential Hospitals uses recent data from the Centers for Medicare & Medicaid Services (CMS) on the HRRP to examine these concerns.
- Hospitals faced a shifting landscape under the HRRP, as CMS increased the maximum penalty and added new measures.
- Hospitals that serve a large volume of low-income patients are 2.67 times more likely than other hospitals to receive penalties under the HRRP for FY 2016.
- Hospitals that received higher penalties as a percentage of their Medicare payments showed the most improvement between FY 2013 and FY 2016.