Financial Penalties Reduce Hospital Readmissions, Yale Study Finds

Data support Obamacare’s Hospital Readmission Reduction Program

Readmission rates declined after the announcement of the Hospital Readmission Reduction Program (HRRP), which penalizes hospitals for excess readmissions for acute myocardial infarction (AMI), congestive heart failure (CHF), or pneumonia, according to a study from the Yale School of Medicine. The findings were published in the Journal of the American Medical Association.

The HRRP was enacted as part of the Patient Protection and Affordable Care Act and imposed financial penalties beginning in October 2012 for hospitals with higher-than-expected readmissions for AMI, CHF, or pneumonia among fee-for-service Medicare beneficiaries.

Since the program began, thousands of hospitals have been subjected to nearly $1 billion in penalties for not reducing readmissions. To determine whether these penalties resulted in fewer readmissions for the three target conditions, the investigators conducted a retrospective cohort study of Medicare fee-for-service beneficiaries 64 years of age or older who were discharged between January 1, 2008, and June 30, 2015, from 2,214 penalty hospitals and 1,283 nonpenalty hospitals.

“We found that hospitals that were subject to penalties under HRRP had more significant reductions in readmissions than hospitals that were not penalized,” said lead author Nihar R. Desai, MD. “In addition, hospitals that were subject to penalty also seemed to focus their efforts on reducing readmissions for conditions that were the basis of the penalty. In contrast, hospitals that weren't penalized seemed to reduce readmissions across all conditions.”

The study included 48.1 million hospitalizations of 20.4 million Medicare beneficiaries. In January 2008, the mean readmission rates for AMI, CHF, pneumonia, and nontarget conditions were 22%, 28%, 20%, and 18%, respectively, at hospitals that were later subject to financial penalties. The corresponding values were 19%, 24%, 17%, and 16% at hospitals that were not subject to penalties.

Between January 2008 and March 2010, prior to the announcement of the HRRP, readmission rates were stable across hospitals (except AMI at nonpenalty hospitals). After the announcement of the HRRP, readmission rates for both target and nontarget conditions declined significantly faster for patients at hospitals that were later subject to financial penalties compared with those at nonpenalized hospitals. For AMI, there was an additional decrease of −1.24 percentage points per year compared with nonpenalty discharges; for CHF and pneumonia, the decreases were −1.25 and −1.37 percentage points, respectively; and for nontarget conditions, the decrease was −0.27 percentage points (P < 0.001 for all).

For penalty hospitals, the readmission rates for the target conditions declined significantly faster compared with nontarget conditions. For AMI, the additional decline was −0.49 percentage points per year compared with nontarget conditions (P = 0.004); for CHF and pneumonia, the decreases were −0.90 and −0.57 percentage points, respectively (both P < 0.001).

In contrast, among nonpenalty hospitals, readmissions for target conditions declined similarly or more slowly compared with nontarget conditions. For AMI and pneumonia, there was an additional increase of 0.48 percentage points per year (P = 0.05); for CHF and pneumonia, the increases were 0.08 (P = 0.67) and 0.53 (P = 0.01) percentage points, respectively.

“We know that not all readmissions are preventable, but we are also looking for ways to improve readmission numbers even further,” Desai said. “We’re exploring whether additional reductions in readmissions are attainable and feasible and what kind of policy environment would be needed to foster those additional reductions.”

Sources: EurekAlert; December 27, 2016; and JAMA; December 27, 2016.