Health care expenditures continue to increase in the United States, and there have been considerable efforts over the past decade to use health policies, financial incentives, and alternative payment models to address this important issue. Starting in 2007, the Centers for Medicaid & Medicare Services (CMS) sought to reduce early readmissions for common medical conditions among Medicare beneficiaries. The CMS policy approaches included increasing transparency through public reporting of hospital 30-day risk standardized readmission rates (2007-2009 discharges) starting in 2009 and providing financial incentives tied to readmissions though the Hospital Readmissions Reduction Program (HRRP), passed under the Patient Protection and Affordable Care Act of 2010.1 The HRRP imposed financial penalties on hospitals based on rates of 30-day risk-standardized hospital readmission for heart failure, acute myocardial infarction, and pneumonia, with up to 3% of a hospital’s total Medicare revenue from admissions for any condition (target or nontarget) at risk. In fiscal year 2018, 80% of the hospitals subject to the HRRP have been penalized, amounting to $564 million in reduced payments by Medicare.2
Fonarow GC. Unintended Harm Associated With the Hospital Readmissions Reduction Program. JAMA. 2018;320(24):2539–2541. doi:10.1001/jama.2018.19325
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