MedPAC evaluation of readmission reduction program, no change in recommendations to Congress

September 23rd, 2019 / By Gretchen Mills

MedPAC, the advisory commission to Congress for Medicare, presented its evaluation of the Medicare Hospital Readmission Reduction Program (HRRP) at the September meeting.

The HRRP was enacted in 2010. In 2013, hospital payment rates were reduced for hospitals with high readmission rates between 2010 and 2012. That approach has been applied annually since then. Some hospitals have challenged the program, claiming it overlaps with other Medicare value-based inpatient incentive programs and criticizing it for not considering underlying patient population social risk factors.  In January 2019, MedPAC recommended that Congress and CMS combine the three overlapping hospital quality payment incentive programs into one and eliminate the Inpatient Quality Reporting program. That recommendation as not changed.

In its evaluation, MedPAC updated 2016 and 2017 data and refuted research that associated declining readmissions with higher post-discharge mortality. MedPAC analyzed risk-adjusted readmissions and mortality and made three key findings:

  1. Risk-adjusted readmission rates declined.
  2. Declining readmissions did not cause an increase in risk-adjusted mortality.
  3. The HRRP appears to have met its objectives.

In conclusion, MedPAC put forward the same recommendation as it did for its January Meeting:

  1. Merge the HRRP, the Hospital Value-Based Purchasing Program (VBP), and the Hospital-Acquired Condition Reduction Program (HACRP) into the Hospital Value Incentive Program (HVIP) and
  2. Eliminate the Inpatient Quality Reporting Program (IQRP)

The proposed HVIP would include five outcomes, patient experience and cost measure domains: readmissions, mortality, spending, patient experience and hospital-acquired conditions. It would set absolute and prospective performance targets, account for social risk factors by adjusting payment in peer groups and distribute a pool of funding to hospitals based on their performance.

To date Congress has not adopted the MedPAC proposal, nor did the CMS final rule for the Medicare Inpatient Prospective payment for 2020.  We’ll have to stay tuned to see whether Congress adopts the MedPAC recommendations for Medicare’s inpatient value incentive program.

Gretchen Mills is manager of market strategy for populations and payment solutions at 3M Health Information Systems.