CMS Hospital Readmissions Reduction Program: Inadvertent cause of patient harm?

By Brian Murphy

Financial incentives are a powerful tool. If you want someone to perform in a certain way, you can encourage, threaten, or cajole them to do so… or you can tangibly reward them with payment for good outcomes, or penalize them for poor behavior.

CMS understood this when it implemented the Hospital Readmissions Reduction Program (HRRP) in October 2012. To recap, the HRRP is what you’d call a “stick” incentive—the HRRP penalizes hospitals for unplanned readmissions within 30 days in six discrete measures including AMI, COPD, HF, etc., up to a maximum of 3% of DRG payments.

Most of us naturally want not to be penalized. In this era of slim hospital margins, penalties make a difference, and so can change practice patterns.

The problem is that hospitals who are incentivized not to readmit patients are now seeing the consequences in the form of a very bad, unintended outcome.

Higher patient deaths.

At least, if we are to trust the results of a recent study published in the Journal of Hospital Medicine (JHM), “Effect of Hospital Readmission Reduction Program on Hospital Readmissions and Mortality Rates.” Link below; note that the abstract is freely available but the full text is protected by a paywall.

Full disclosure: I was never good at statistics (Jason Jobes throw me a lifeline here). But fortunately this study breaks down the numbers with a succinct (and scary) takeaway:

“This hospital-level analysis of acute exacerbation of COPD showed that although the 30-day all-cause readmission rates declined, the mortality rates increased. Hospitals with lower readmission rates had higher mortality rates over time.”


Before we demonize the HRRP let’s remember why it was implemented: To help drive down runaway healthcare costs. Hospitals get paid more for inpatient stays than outpatient visits or observation. Costly readmissions can be headed off with appropriate measures, including use of in-home healthcare services, ensuring medication adherence, etc.

But it’s possible—nay, certain, if this study is to be believed—that broadly fining hospitals for excessive readmissions is the wrong tool for solving this problem.

In fact, it’s a harmful one.

This JHM study is not a lone voice of criticism. A pair of physicians recently criticized the HRRP in the pages of JAMA (link below), stating that the 30-day readmission measure used by CMS contains other flaws, in that it “provides an incomplete picture of hospital revisits because it does not include ED treat-and-release encounters or observation stays that can occur within 30 days of discharge, both of which have increased substantially since the program was implemented. Evidence suggests that hospitals have raised their threshold to readmit patients presenting to the ED, and are now instead more likely to place patients in observation status or directly discharge them from the ED.”

The HRRP is showing substantial cracks.

What’s next CMS?

Resources/for further reading

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