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Joynt KE, Jha AK. Characteristics of Hospitals Receiving Penalties Under the Hospital Readmissions Reduction Program. JAMA. 2013;309(4):342–343. doi:10.1001/jama.2012.94856
To the Editor: The federal Hospital Readmissions Reduction Program (HRRP) took effect on October 1, 2012, the first day of fiscal year 2013. Under this program, using claims data from July 2008 through June 2011, the Centers for Medicare & Medicaid Services (CMS) determined, for each eligible US hospital, whether their readmission rates were higher than would be predicted by CMS models based on their case mix. Hospitals with higher-than-predicted readmission rates will have their total Medicare reimbursement for fiscal year 2013 cut by up to 1% based on these calculations.1 The CMS recently made these payment cuts public.
Because prior studies have shown that readmissions are related to severity of illness and socioeconomic status,2,3 we sought to examine the risk of penalties for US hospitals that care for medically complex or socioeconomically vulnerable patients, namely large teaching hospitals and safety-net hospitals.4
We used the publicly available HRRP Supplemental Data File5 and categorized hospitals as having high penalties (top half of penalized hospitals), low penalties (bottom half), and no penalties. We linked these data to the 2011 American Hospital Association annual survey to identify hospitals that likely care for sicker patients (large hospitals with ≥400 beds and major teaching hospitals with membership in the Council of Teaching Hospitals) as well as safety-net hospitals (SNHs, those in the highest quartile of the disproportionate share hospital index, a measure used by the CMS to quantify care provided for the poor). We compared the readmission penalties for these hospitals with other types of institutions. Subsequently, we used multinomial logistic regression analyses to calculate the odds of receiving high vs no penalties and low vs no penalties for each hospital type of interest.
We considered a 2-tailed P value of less than .05 as significant. Analyses were performed using Stata version 12.1 (StataCorp). This study was approved by the Office of Human Research Administration at the Harvard School of Public Health.
Of the 3282 hospitals in our sample, 2189 (66.7%) will receive payment cuts as a result of the HRRP. Forty percent of large hospitals (n = 178) vs 28% of small hospitals (n = 296) will be highly penalized (Table). Conversely, 47% of small hospitals (n = 503) will receive no payment cuts compared with 24% of large hospitals (n = 108).
Similarly, we found that major teaching hospitals are more likely to be highly penalized than nonteaching hospitals (44% [n = 118] vs 33% [n = 979], respectively) and less likely to not be penalized (19% [n = 50] vs 35% [n = 1043]). Safety-net hospitals are more likely to be highly penalized than non-SNHs (44% [n = 337] vs 30% [n = 760], respectively), and only 20% (n = 157) will not be penalized. In multivariate analyses, we found that the adjusted odds of being highly penalized are greatest for SNHs (odds ratio, 2.38 [95% CI, 1.91-2.96]; P < .001).
We found that large hospitals, teaching hospitals, and SNHs are more likely to receive payment cuts under the HRRP. It is unclear exactly why these hospitals have higher readmission rates than their smaller, nonteaching, non-SNH counterparts, but prior research suggests that differences between hospitals are likely related to both case mix (medical complexity) and socioeconomic mix of the patient population.2,3 There is less evidence that differences in readmissions are related to measured hospital quality.6
The consequences of these payment cuts remain to be seen. While the current penalties of up to 1% of total Medicare reimbursement in fiscal year 2013 may be modest for some hospitals, they may represent substantial financial shortfalls for hospitals operating on low profit margins.
There are limitations to our study. There is no single, agreed-upon method to identify the hospitals that care for the sickest patients or those that are SNHs. Although our definitions are widely used, others may take a different approach. Furthermore, although the data presented represent penalties for fiscal year 2013, whether the same hospitals will be penalized as the program ramps up in 2014 and 2015 is unknown.
In summary, we found that large teaching hospitals and SNHs are more likely than other hospitals to be penalized under the HRRP.
Author Contributions: Dr Joynt had full access to all of the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis.
Study concept and design: Joynt, Jha.
Acquisition of data: Joynt, Jha.
Analysis and interpretation of data: Joynt, Jha.
Drafting of the manuscript: Joynt.
Critical revision of the manuscript for important intellectual content: Joynt, Jha.
Statistical analysis: Joynt.
Obtained funding: Jha.
Administrative, technical, or material support: Joynt, Jha.
Study supervision: Jha.
Conflict of Interest Disclosures: The authors have completed and submitted the ICMJE Form for Disclosure of Potential Conflicts of Interest and none were reported.
Funding/Support: Dr Joynt was supported by grant 1K23HL109177-01 from the National Heart, Lung, and Blood Institute and the Lerner Research Award from Brigham and Women's Hospital, Cardiovascular Division.
Role of the Sponsors: The funders had no role in the design and conduct of the study; collection, management, analysis, or interpretation of the data; or preparation, review, or approval of the manuscript.