Are Medicare readmission penalties working?

December 18th, 2017 / By Paul LaBrec

In 2012, the Centers for Medicare and Medicaid Services (CMS) began its Hospital Readmissions Reduction Program (HRRP).  The program, included in the Affordable Care Act, was designed to improve post-acute care by penalizing hospitals with excess readmissions. The program began focusing on readmissions of patients with acute myocardial infarction (AMI), heart failure (HF), and pneumonia (PN). The program has since been expanded to include readmission for:

  • Patients admitted for an acute exacerbation of chronic obstructive pulmonary disease (COPD)
  • Patients admitted for elective total hip arthroplasty (THA) and total knee arthroplasty (TKA)
  • Patients admitted for coronary artery bypass graft (CABG) surgery.1

The rationale for the program is that penalizing hospitals for certain readmissions of Medicare patients will provide incentive to improve post-discharge follow-up care programs, both improving outcomes and reducing costs.

Since its inception, the program has received both praise and criticism for its effects. HRRP has reduced readmissions of Medicare patients in its target conditions up to about 4 percent in aggregate and generating nearly $2 billion dollars in penalties.2,3 The program appears to be lowering targeted readmissions as planned.

Research at Yale’s Center for Outcomes Research and Evaluation (CORE) helped formulate the policy directives that became the HRRP program. CORE research on Medicare fee-for-service claims has recently shown a decrease in 30-day readmissions for AMI, HF, and PN after HRRP with a concomitant slight decrease in 30-day mortality.4

Other researchers, however, have suggested that the reduction in readmission has come at the price of increased mortality. A recent study on heart failure readmissions in Medicare fee-for-service patients decrease in 30-day and 1-year risk-adjusted readmissions after HRRP implementation, but an increase in 30-day and 1-year risk-adjusted mortality.5

One study suggested a significant proportion of the reduction in readmission rates after HRRP may be due to changes in severity coding of patients.6 The authors found the number of coded comorbidities per admission at control hospitals increased 19.6 percent after HRRP, while coded comorbidities at HRRP-exposed hospitals increased 38.8 percent.  Since HRRP penalties are risk-adjusted for patient case-mix, hospitals with a higher risk Medicare population have a higher expected rate of readmission. Penalties are assessed for rates above the expected risk-adjusted rate.     

Others have suggested a failure to account for the effects of social determinants of health (SDoH) on hospital readmission risk can explain some of the variation in hospital readmission rates. I addressed this issue in a previous blog.

Apparently, in a “sign of the times,” a Twitter feud erupted over these differing conclusions.7 Conflicting results based on research using different data or variations of the same data, or differences in opinion on interpretation of the same data, are common in scientific inquiry and important in a healthy debate of research.  When research is informing public policy, however, this debate is not purely academic and decisions made from the interpretation of data have material consequences. I look forward to reading additional research on this topic and following the public policy response from CMS.    

Paul LaBrec is research director for Populations and Payment Solutions with 3M Health Information Systems.


1 Centers for Medicare and Medicaid Services. “Readmissions Reduction Program (HRRP)”. Accessed December 15, 2017.

2 Zuckerman, R et al. “Readmissions, Observation, and the Hospital Readmissions Reduction Program”. N Engl J Med 2016;374:1543-51. Accessed December 14, 2017 at file:///C:/Users/a4w07zz/AppData/Local/Microsoft/Windows/INetCache/IE/58371M19/nejmsa1513024.pdf

3 American Hospital Association. “Hospital Readmissions Reduction Program Factsheet.” Accessed December 14, 2017 at file:///C:/Users/a4w07zz/AppData/Local/Microsoft/Windows/INetCache/IE/87HAVDV9/fs-readmissions.pdf

4 Dharmarajan K et al. “Association of Changing Hospital Readmission Rates With Mortality Rates After Hospital Discharge.” JAMA. 2017;318(3):270-278. Accessed December 15, 2017.

5 Gupta A et al. “Association of the Hospital Readmissions Reduction Program Implementation With Readmission and Mortality Outcomes in Heart Failure”. JAMA Cardiol. Published online November 12, 2017. Accessed December 14, 2017.

6 Ibrahim A et al. “Association of Coded Severity With Readmission Reduction After the Hospital Readmissions Reduction Program.” JAMA Intern Med. Published online November 13, 2017. Accessed December 15, 2017.

7 Ross C. “The data are in, but debate rages: Are hospital readmission penalties a good idea?” STAT. December 11, 2017. Accessed December 13, 2017.