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Readmission penalties for safety net hospitals drop under new rules

The stratified payment method showed the biggest impact among hospitals tending to the socioeconomically disadvantaged.

Jeff Lagasse, Associate Editor

Readmissions penalties against hospitals providing care to socioeconomically disadvantaged patients have dropped 14 percentage points under new rules adopted this year that more equitably account for low-income populations being served, according to a new analysis led by UT Southwestern Medical Center and Harvard researchers.

Hospitals serving low-income populations have traditionally been disproportionately penalized for hospital readmissions under the Hospital Readmissions Reduction Program, which is designed to reduce health system costs.

The new rules adopted in 2019 instead compare similar hospitals, such as groups of large safety net hospitals.

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The stratified payment method showed the biggest impact among hospitals tending to the socioeconomically disadvantaged, leading to the 14 percent reduction in readmissions penalties. The distribution of penalties is essentially more equitable and lessens the burden for each.

The investigation of more than 3,000 hospitals touts itself as one of the first to examine the effectiveness of the new rules to help level the playing field by comparing penalties for all hospitals to the reclassified hospitals that serve low socioeconomic status populations for four targeted medical conditions: acute myocardial infarction, or heart attack; heart failure; chronic obstructive pulmonary disease; and pneumonia. Heart-related conditions saw the greatest readmissions reductions.

Researchers found the Hospital Readmission Reduction Program reduced penalties from 79 percent to 75 percent across all hospitals, a 4 percentage point reduction; reduced penalties from 91 percent to 77 percent across safety net hospitals, a 14 percentage point reduction; and had the greatest impact on non-teaching, physician-owned hospitals in rural regions.

The research appears in JAMA Open Network. It was performed in collaboration with investigators from different U.S. institutions including Brigham and Women's Hospital, Massachusetts General Hospital, Northwestern University, and UCLA Health.


Patients who receive care in a for-profit hospital are more likely to be readmitted than those who receive care in non-profit or public hospitals, according to a September study conducted by University of Illinois at Chicago researchers.

They found that across six major diseases -- heart attack, heart failure, coronary artery bypass surgery, pneumonia, chronic obstructive pulmonary disease and total hip or knee replacement surgery -- there was a statistically significant difference in readmission rates based on type. Hospitals with fewer readmissions than expected, based on a government ratio accounting for disease severity, were primarily public and nonprofit. Hospitals with more readmissions than expected were dominated by for-profit hospitals.


"Dual-eligible patients, those eligible for both Medicare and Medicaid, represent a complex, high-risk cohort that account for a third of spending in both programs," said Dr. Muthiah Vaduganathan, co-first author from Brigham and Women's Hospital. "The new stratified peer group-based assessment of hospital performance is a welcome initial step and addresses variation in care provided to dual-eligible patients across hospital systems in the U.S."

Twitter: @JELagasse

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