The Hospital Readmissions Reduction Program (HRRP) Impact on Patient Discharge Status in New Jersey

The Affordable Care Act’s Hospital Readmissions Reduction Program, introduced in 2012, aimed to improve care quality by enhancing transitions and care coordination, ultimately reducing preventable hospital readmissions among Medicare patients through financial penalties. Employing a difference-in-differences approach with hospital fixed effects, this study examines how the program affected New Jersey hospitals’ discharge practices and inpatient lengths of stay using data from the New Jersey State Inpatient Databases of the Healthcare Cost and Utilization Project, Agency for Healthcare Research and Quality for 2005, 2010, and 2015. The study analyzes 55,653 heart failure admissions, 23,960 acute myocardial infarction admissions, 34,973 pneumonia admissions, and 81,402 gastrointestinal disorder cases, with gastrointestinal disorders serving as a control group to account for underlying trends. The findings indicate that the program’s implementation was associated with a decline in discharges to home health services among heart failure patients, a decrease in discharges to skilled nursing facilities among both acute myocardial infarction and heart failure patients, and a reduction in inpatient length of stay among acute myocardial infarction and pneumonia cases. However, due to limited time variation and contemporaneous Medicare reforms, these results should be interpreted as associations rather than definitive causal effects. These findings suggest that value-based payment policies may shift hospital discharge behavior and care coordination strategies, potentially improving efficiency while also raising concerns about unintended effects on access and equity. Policymakers should account for concurrent reforms and underlying trends while ensuring that cost reductions are balanced with safeguards for care quality and patient outcomes, particularly among vulnerable populations.