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Hosp. Readmission Reduction


Hospital Readmissions Reduction Program (HRRP)

What is the Hospital Readmissions Reduction Program?

HRRP is a pay-for-performance program that lowers payments to Inpatient Prospective Payment System (IPPS) hospitals with too many readmissions.

Section 3025 of the 2010 Affordable Care Act required the Secretary of the Department of Health and Human Services to establish the HRRP starting October 1, 2012 (i.e., Federal Fiscal Year [FY] 2013).

Why is the Hospital Readmissions Reduction Program important?

The HRRP was established under the Affordable Care Act to make Americans’ health care better by linking payment to the quality of hospital care. It gives hospitals a strong financial incentive to:

  • Make their communication and care coordination efforts better.
  • Work better with patients and caregivers on post-discharge planning.

We’ve included measures of conditions and procedures that make a big difference in the lives of large numbers of people with Medicare. We know that the HRRP, with the Hospital Value Based Purchasing (HVBP) and the Hospital-Acquired Condition (HAC) Reduction Programs, is a major part of how we add quality measurement, transparency, and improvement to value-based payment in the inpatient care setting. 

As a part of our Meaningful Measures Framework, we’re looking at the existing measure set as it relates to these other programs. We want to see how we can lower burden and make the programs less complex while we’re giving health care providers incentives to improve patients’ health care quality and value. 

Past research has shown that hospital readmission rates are different across the nation. This gives us an opportunity to improve the quality of care and save taxpayer dollars by giving providers incentives to reduce excess readmissions.

What are applicable Hospital Readmissions Reduction Program hospitals?

Applicable hospitals in HRRP are defined in section 1886(d)(1)(B) of the Social Security Act as: 

Maryland hospitals are included under the program in readmission measure calculations, but they’re waived from penalties because they participate in the Maryland All-payment model. You can find more information about Maryland hospitals in section 1886(q)(5)(C) of the Social Security Act.

What measures are included in the Hospital Readmissions Reduction Program?

We use the excess readmission ratio (ERR) to gauge hospital performance. The ERR is a measure of hospital’s relative performance and is ratio of predicted-to-expected readmissions. We figure an ERR for each of these conditions and procedures that are included in the program:

  • Acute Myocardial Infarction (AMI)
  • Chronic Obstructive Pulmonary Disease (COPD)
  • Heart Failure (HF)
  • Pneumonia
  • Coronary Artery Bypass Graft (CABG) Surgery
  • Elective Primary Total Hip Arthroplasty and/or Total Knee Arthroplasty (THA/TKA)

HRRP doesn’t include the Hospital-Wide All-Cause Readmission (HWR) measure, which is included in the Hospital Inpatient Quality Reporting (IQR) Program.

What counts as a readmission in the Hospital Readmissions Reduction Program?

The 30-day risk standardized readmission measures include:

  • All-cause unplanned readmissions that happen within 30 days of discharge from the index (i.e., initial) admission.
  • Patients who are readmitted to the same hospital, or another applicable acute care hospital for any reason.

Readmissions to any applicable acute care hospital are counted, no matter what the principal diagnosis was. The measures don’t include some planned readmissions.

How do we adjust payments under the Hospital Readmissions Reduction Program?

For each eligible hospital, we figure the payment adjustment factor. The payment adjustment factor tells us what percent a hospital’s payment is reduced. We use the adjustment factor for all discharges in the applicable fiscal year, no matter the condition.

You can find more information in the QualityNet Payment Adjustment section.

What is the Review & Corrections period for the Hospital Readmissions Reduction Program?

The 30-day Review and Corrections period is when applicable hospitals can review and correct the accuracy of their ERR calculations for HRRP. Hospitals can’t send in more corrections to the underlying claims data or new claims to the data extract.

Every program year, we let hospitals know the exact dates of the Review and Corrections period.

How will I know if there are changes to the Hospital Readmissions Reduction Program?

Changes to the program happen through rulemaking.  These changes are published yearly after a public comment period, with the Inpatient Prospective Payment System /Long-Term Care Hospital Prospective Payment System (IPPS/LTCH PPS) Final Rule.

Where can I get more information about the Hospital Readmissions Reduction Program?

Get more details on the Hospital Readmissions Reduction Program.

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