Skip to main content

Medicare's Hospital Readmission Penalties Having Widespread Impact

Analysis  |  By Christopher Cheney  
   November 08, 2018

National data indicates the Hospital Readmissions Reduction Program is having a positive impact on patients under 65 as well as patients with Medicaid and private insurance coverage.

Medicare's Hospital Readmissions Reduction Program (HRRP) is having a positive impact beyond Medicare beneficiaries and beyond the medical conditions targeted in the initiative, recent research shows.

"There appears to be a systematic improvement in readmission rates for patient groups beyond the population of fee-for-service, older, Medicare beneficiaries included in the HRRP," researchers wrote this month in the American Journal of Medicine.

The primary implication of the research is that health systems and hospitals have made broad improvements to quality of care rather than changes aimed only at Medicare beneficiaries treated for the conditions targeted by HRRP.

In 2012, the Centers for Medicare & Medicaid Services started financial penalties for high readmission rates for three conditions: acute myocardial infarction (AMI), heart failure and pneumonia. Under HRRP, hospitals are penalized if they have higher than expected risk-standardized readmission rates.

The American Journal of Medicine researchers examined data from the Healthcare Cost and Utilization Project's Nationwide Readmissions Database (NRD), a nationally representative all-payer database. They focused on readmission rates across six age-insurance groups for the three HRRP targeted conditions as well as conditions not targeted by HRRP. The data features nearly 60 million hospitalizations and more than 18 million readmissions.

The six age-insurance groups were patients over 65 with Medicare, Medicaid, or private insurance; and patients younger than 65 with Medicare, Medicaid, or private insurance.

Broad readmission gains

The NRD data shows reductions in readmissions rates across all six age-insurance groups.

  • Readmissions for AMI patients over 65 declined significantly for all three forms of healthcare coverage: the readmission rate for patients with Medicare coverage dropped from 19.2% in 2010 to 15.5% in 2015; for the privately insured, the readmission rate dropped from 14.6% to 12.4%; and for patients with Medicaid coverage the readmission rate dropped from 23.4% to 18.3%.
  • Readmissions for AMI patients under 65 also declined significantly: decreased readmission rates for privately insured and Medicaid patients mirrored the lower readmission rates for patients over 65. Medicare patients under 65 experienced a modest decrease in readmission rates from 19.7% to 18.6%.
  • Similar to AMI, readmission rates for heart failure decreased significantly for all six age-insurance groups.
  • Readmission rates for pneumonia decreased for all six age-insurance groups, but the decline was significantly larger for patients over 65 compared to those under 65.
  • For conditions not targeted under HRRP, there was a small decrease in readmission rates in most age-insurance groups. For example, among Medicare patients over 65, readmission rates dropped from 16.3% in 2010 to 15.5% in 2015; but among the privately insured, readmission rates dropped from 14.0% in 2010 to 13.5% in 2013, then rose to 13.8% in 2015.

Systematic changes

The data collected in the American Journal of Medicine study indicate HRRP is having a widespread impact on hospital readmissions, the researchers wrote.

"From 2010-2015, 30-day all-cause readmission rates for acute myocardial infarction, heart failure, and pneumonia declined across all age-insurance groups. Readmission rates decreased modestly for conditions not targeted by the HRRP in all age-payer groups, with larger declines among Medicare patients aged ≥65 years," they wrote.

This finding implies hospitals have made extensive changes to clinical care rather than changes targeted only at HRRP-impacted patients, the researchers wrote.

"These patterns are consistent with the hypothesis that implementation of the HRRP was associated with systematic changes in the care of patients and reduced readmission risk beyond the HRRP's target population of fee-for-service Medicare beneficiaries."

Christopher Cheney is the CMO editor at HealthLeaders.


The Hospital Readmissions Reduction Program penalizes hospitals financially if they have higher than expected risk-standardized readmission rates.

From 2010 to 2015, national data indicates that readmission rates decreased for not only Medicare patients but also patients with Medicaid and private insurance coverage.

Hospitals appear to be making far-reaching changes to quality of care rather than changes only designed to avoid HRRP penalties.

Tagged Under:

Get the latest on healthcare leadership in your inbox.