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Study: HRRP Peer Grouping Affects Readmissions Penalties

Stratifying hospitals based on their share of Medicare patients dually eligible for Medicaid significantly shifted readmissions penalties, according to a new study in JAMA Internal Medicine.

The Hospital Readmissions Reduction Program (HRRP) in fiscal year (FY) 2019 began to stratify hospitals into five peer groups based on their proportion of dual-eligible patients. This study sampled 3,049 hospitals that participated in the HRRP in FY 2018, under the traditional method, and FY 2019, under the stratified method.

Hospitals in the highest quintile of dual enrollment saw a $22.4 million decrease in readmissions penalties, and hospitals in the lowest quintile of dual enrollment saw a $12.3 million increase. Hospitals with a greater likelihood of a penalty reduction included:

  • nonprofit hospitals;
  • teaching hospitals;
  • hospitals in the Midwest and South;
  • hospitals serving patients from the most disadvantaged neighborhoods;
  • hospitals with the highest proportion of beneficiaries with disabilities; and
  • hospitals in states with the highest Medicaid eligibility cutoffs.

Adjusting for social risk factors can have a major financial effect on hospitals that fill a safety-net role. For more information on how sociodemographic factors affect health outcomes, visit our resource page.

Contact Senior Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions.

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About the Author

Emily Schweich is a senior communications associate for America's Essential Hospitals.

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