Study: Consecutive Penalties for Preventable Hospital Readmissions

More than 1,200 hospitals have faced penalties for preventable hospital readmissions every year for the last 10 years since the launch of the Hospital Readmissions Reduction Program (HRRP), according to Kaiser Family Foundation (KFF).

Medicare spends hundreds of millions of dollars every year on preventable hospital readmissions. In an attempt to curb this spending, the government created the Hospital Readmissions Reduction Program under the Affordable Care Act.

The HRRP monitors rehospitalizations in general acute-care hospitals. If there is an inappropriate number of readmissions within 30 days of discharge, the government will cut the hospital’s Medicare reimbursement rate.

The goal of the program was to push hospitals to pay more attention to their patients after they have been discharged in order to prevent readmissions and improve patient outcomes. The idea was that the possibility of financial repercussions would act as motivation for hospitals.

The average penalty for fiscal year 2022 is 0.64 percent. Some hospitals had reimbursement cuts up to 3 percent, KFF stated. The average hospital fine in 2018 due to HRRP was $217,000, according to the Medicare Payment Advisory Commission (MedPAC).

Currently, 3,139 general acute hospitals are subject to HRRP evaluation. More than 2,000 hospitals are exempt from the program because they specialize in children, veterans, or psychiatric patients. Long-term care, rehabilitation, and critical access hospitals are also exempt, according to KFF.

The program has played a part in reducing readmission rates since its launch, but there is still a handful of hospitals that have continuously faced financial penalties.

Since the program’s start, 2,920 hospitals have received a penalty at least once, which is 93 percent of all hospitals included in the program and 55 percent of all hospitals in the country, KFF noted.

Only 219 hospitals have received no penalties since HRRP was introduced and 56 hospitals received a penalty just once following the program’s launch.

In contrast, 1,288 hospitals have received Medicare reimbursement cuts every year since the program started. Nearly 400 hospitals have faced punishments for nine consecutive years

During the tenth year of HRRP penalties, 2,499 hospitals are facing Medicare reimbursement reductions. Almost 40 hospitals will receive the maximum 3 percent reduction. More than 80 percent of the hospitals that Medicare evaluated will receive a penalty, similar to FY 2021 numbers.

On the other hand, 547 hospitals will not receive any penalties due to the low number of readmissions.

Medicare estimated that the upcoming penalties in FY 2022 will save the government $521 million.

The government assigned the penalties based on the Medicare patient discharges and readmissions that occurred between July 1, 2017 and December 1, 2019. The tracking period is usually three years long, but CMS excluded the last six months due to the COVID-19 pandemic and the accompanying influx of patients.

Overall, hospital readmission rates have declined since 2008. Between 2008 and 2017, heart failure patient readmission rates fell from 24.8 percent to 20.5 percent, heart attack readmission rates fell from 19.7 percent to 15.5 percent, and pneumonia readmission rates dropped from 20 percent to 15.8 percent, MedPAC revealed.