Effect of a hospital-wide measure on the readmissions reduction program

BACKGROUND: The Hospital Readmissions Reduction Program penalizes hospitals that have high 30-day readmission rates across specific conditions. There is support for changing to a hospital-wide readmission measure to broaden hospital eligibility and provide incentives for improvement across more conditions. METHODS: We used Medicare claims from 2011 through 2013 to evaluate the number of hospitals that were eligible for penalties, in that they met a volume threshold of 25 admissions over a 3-year period for a specific condition or 25 admissions over a 1-year period for the cohorts included in the hospital-wide measure. We estimated the expected effects that changing from the condition-specific readmission measures to a hospital-wide measure would have on average penalties for safety-net hospitals (i.e., hospitals that treat a large proportion of low-income patients) and other hospitals. RESULTS: Our sample included 6,807,899 admissions for the hospital-wide measure and 4,392,658 admissions for the condition-specific measures. Of 3443 hospitals, 688 were considered to be safety-net hospitals. Changing to the hospital-wide measure would result in 76 more hospitals being eligible to receive penalties. The hospital-wide measure would increase penalties (mean [±SE] Medicare payment reductions across all hospitals) from 0.42±0.01% to 0.89±0.01% of Medicare base diagnosis-related-group payments. It would also increase the disparity in penalties between safety-net hospitals and other hospitals from −0.03±0.02 to 0.41±0.06 percentage points. CONCLUSIONS: A transition to a hospital-wide readmission measure would only modestly increase the number of hospitals eligible for penalties and would substantially increase the penalties for safety-net hospitals.