April 15, 2019Open Access
Association of Stratification by Dual Enrollment Status With Financial Penalties in the Hospital Readmissions Reduction Program
Key Result
Stratification of hospitals under the HRRP by dual enrollment status shifted penalties, with the highest dual-enrollment quintile seeing a $22,445,644 decrease in penalties.
Study Design
Type
Cross-Sectional (n=3,049)
Multicenter
Yes
Structured PICO
Does stratification by dual enrollment status in the Hospital Readmissions Reduction Program change financial penalties for hospitals?
P
Population
3,049 hospitals participating in the Hospital Readmissions Reduction Program (HRRP) in fiscal years 2018 and 2019
I
Intervention
HRRP under the 2019 stratification method (stratifying hospitals into 5 peer groups based on the proportion of dually enrolled Medicare and Medicaid patients)
C
Comparator
HRRP under the 2018 traditional method
O
Outcome
Performance on readmissions (excess readmissions ratio) and penalties under the HRRP in relative percentage change and absolute dollars
Stratification of hospitals in the HRRP by dual Medicare/Medicaid enrollment status significantly shifted financial penalties, reducing penalties for hospitals caring for higher proportions of disadvantaged patients.
Abstract
Importance: Beginning in fiscal year 2019, Medicare's Hospital Readmissions Reduction Program (HRRP) stratifies hospitals into 5 peer groups based on the proportion of each hospital's patient population that is dually enrolled in Medicare and Medicaid. The effect of this policy change is largely unknown. Objective: To identify hospital and state characteristics associated with changes in HRRP-related performance and penalties after stratification. Design, Setting, and Participants: A cross-sectional analysis was performed of all 3049 hospitals participating in the HRRP in fiscal years 2018 and 2019, using publicly available data on hospital penalties, merged with information on hospital characteristics and state Medicaid eligibility cutoffs. Exposures: The HRRP, under the 2018 traditional method and the 2019 stratification method. Main Outcomes and Measures: Performance on readmissions, as measured by the excess readmissions ratio, and penalties under the HRRP both in relative percentage change and in absolute dollars. Results: The study sample included 3049 hospitals. The mean proportion of dually enrolled beneficiaries ranged from 9. 5% in the lowest quintile to 44. 7% in the highest quintile. At the hospital level, changes in penalties ranged from an increase of 225 000 to a decrease of more than 436 000 after stratification. In total, hospitals in the lowest quintile of dual enrollment saw an increase of 12 330 157 in penalties, while those in the highest quintile of dual enrollment saw a decrease of 22 445 644. Teaching hospitals (odds ratio OR, 2. 13; 95% CI, 1. 76-2. 57; P <. 001) and large hospitals (OR, 1. 51; 95% CI, 1. 22-1. 86; P <. 001) had higher odds of receiving a reduced penalty. Not-for-profit hospitals (OR, 0. 64; 95% CI, 0. 52-0. 80; P <. 001) were less likely to have a penalty reduction than for-profit hospitals, and hospitals in the Midwest (OR, 0. 44; 95% CI, 0. 34-0. 57; P <. 001) and South (OR, 0. 42; 95% CI, 0. 30-0. 57; P <. 001) were less likely to do so than hospitals in the Northeast. Hospitals with patients from the most disadvantaged neighborhoods (OR, 2. 62; 95% CI, 2. 03-3. 38; P <. 001) and those with the highest proportion of beneficiaries with disabilities (OR, 3. 12; 95% CI, 2. 50-3. 90; P <. 001) were markedly more likely to see a reduction in penalties, as were hospitals in states with the highest Medicaid eligibility cutoffs (OR, 1. 79; 95% CI, 1. 50-2. 14; P <. 001). Conclusions and Relevance: Stratification of the hospitals under the HRRP was associated with a significant shift in penalties for excess readmissions. Policymakers should monitor the association of this change with readmission rates as well as hospital financial performance as the policy is fully implemented.