Readmissions, penalties, and the Hospital Readmissions Reduction Program

Preventable readmissions represent a considerable economic burden on the healthcare system in the United States, and have emerged as targets in value-based initiatives in recent legislation. The Hospital Readmissions Reduction Program (HRRP) was established as part of the Affordable Care Act (ACA) to provide a financial incentive for hospitals to engage in quality improvement efforts to reduce readmissions, by levying penalties for Medicare reimbursements to hospitals with higher-than-expected rates of readmissions. By linking quality with payment, the goal of this program was to reduce the variations in healthcare delivery that may contribute to the disparate outcomes observed between hospitals. Both before and after implementation, however, concerns over the extent to which hospitals can influence readmission rates have been debated, and will continue to be central in the discussions surrounding each new ruling of the HRRP.