Financial penalties successful in reducing readmissions

Being penalized under the Hospitals Readmissions Reduction Act (HRRA) led to lower 30-day readmissions at those hospitals compared to non-penalized facilities, according to a study published in JAMA.

Beginning in 2012, the HRRA reduced reimbursements for hospitals with high readmission rates among Medicare beneficiaries associated with three conditions: acute myocardial infarction, congestive heart failure and pneumonia. According to a Kaiser Family Foundation analysis in Sept. 2016, the program has imposed almost $1 billion in penalties.

The study, led by Yale professor of medicine Nihar Desai, MD, PhD, that all hospitals seemed to responded to the treat of financial punishment for not making improvements.

“We found that hospitals that were not subject to penalties under HRRP also reduced readmissions across all conditions, but the hospitals that were penalized under HRRP had more significant reductions in readmissions across all conditions, and even larger reductions for the target conditions that were the basis of the penalty,” Desai said in a press release.

The study looked at claims data between January 2008 and June 2015. At the beginning of that time period, the mean readmission rates were higher at facilities which would later be penalized, which tended to be larger teaching hospitals with more Medicaid patients.

Once the HRRP was announced in 2010 as part of the Affordable Care Act (ACA), readmission rates declined more quickly at the penalized hospitals in the target conditions. For example, re-hospitalizations for AMI declined by an additional 1.24 percent at penalized facilities compared to nonpenalized hospitals.

A separate study published in the Annals of Internal Medicine reached a similar conclusion about the readmissions penalties, even while looking at somewhat different set of data.

Led by Jason Wasfy, MD, director of quality and outcomes at Massachusetts General Hospital Heart Center, the Annals research compared older, pre-ACA information dating back to 2000 with readmissions data through Dec. 2013, three years after the law was passed. In the decade prior to the law, readmissions had been on the rise in two of the three target categories.

Once the HRRP was passed, and before penalties were being handed out, 30-day readmissions fell in all three categories, with the most improvement seen among the prior decade’s lowest performers.

According to an editorial written by Wasfy and his coauthors in STAT News, their conclusion showed that penalties served as effective motivation to reduce readmissions.

“Many drugs have what’s called a dose-dependent effect. The higher the dose, the more effectively it fights disease. Penalties for readmission may have a similar dose-dependent effect,” Wasfy and his coauthors wrote. “Hospitals with bigger penalties appear to have reduced readmissions more than those with smaller penalties. Such a relationship increases our confidence that the penalties are actually causing the improvement, instead of being associated with some other factor that is actually driving the change.”

The readmissions penalties have not been universally praised. A study published in Oct. 2016 in JAMA Cardiology criticized HRRP for punishing hospitals more for readmissions than mortality, while an Oct. 2016 Health Affairs article said the 30-day interval doesn’t accurately capture hospital-attributable readmissions.