Hospital Readmissions Reduction Program: Intended and Unintended Effects

This study examines whether the Hospital Readmissions Reduction Program (HRRP), which penalizes hospitals with excess readmissions for certain conditions, has reduced hospital readmissions and led to unintended consequences. Our analyses of Florida hospital administrative data between 2008 and 2014 find that the HRRP resulted in a reduction in the likelihood of readmissions by 1% to 2% for traditional Medicare (TM) beneficiaries with heart failure, pneumonia, or chronic obstructive pulmonary disease. Readmission rates for Medicare Advantage (MA) beneficiaries and privately insured patients with heart attack and heart failure decreased even more than TM patients with the same target condition (e.g., for heart attack, the likelihood for TM beneficiaries to be remitted is 2.2% higher than MA beneficiaries and 2.3% higher than privately insured patients). We do not find any evidence of cost-shifting, delayed readmission, or selection on discharge disposition or patient income. However, the HRRP reduced the likelihood of Hispanic patients with target conditions being admitted by 2% to 4%.