ACA financial penalties lead to reductions in hospital readmission rates for common conditions

Financial penalties levied under the Affordable Care Act's (ACA) Hospital Readmissions Reduction Program lead to the poorest performing hospitals to achieve the greatest reductions in readmission rates for common conditions. The analysis, led by researchers at Beth Israel Deaconess Medical Center (BIDMC), the Harvard T.H. Chan School of Public Health, and Massachusetts General Hospital, is published in Annals of Internal Medicine.

The Hospital Readmission Reduction Program was enacted into law in 2010 and implemented in 2012 in response to the high numbers of patients who were readmitted within 30 days of their initial discharge from the hospital after treatment for several common conditions, including heart failure, pneumonia and acute myocardial infarction. While some readmissions may be unavoidable, there was evidence of wide variation in hospitals' readmission rates, suggesting that patients admitted to certain hospitals were more likely to experience readmissions compared to other hospitals.

Researchers examined Medicare fee-for-service hospitalization data from more than 2,800 hospitals across the country between 2000 and 2013 to evaluate whether passage of the federal law was followed by acceleration in improvement in 30-day risk-standardized readmission rates after initial hospitalization for acute myocardial infraction, congestive heart failure or pneumonia. Hospitals were categorized into one of four groups based on the penalties they had incurred under the Hospital Readmission Reduction Program: highest performance (0% penalty), average performance (greater than 0% but less than 0.5% penalty), low performance (equal to or greater than 0.5% but less than 0.99% penalty), and lowest performance (greater than or equal to 0.99% penalty). The data showed all groups of hospitals improved to some degree, but the hospitals that were the lowest performers before passage of federal reform had the highest improvement after being penalized financially. The authors suggest that these findings show how policies motivate health care providers to improve performance.

Source: American College of Physicians