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Hosp. Readmission Reduction


Hospital Readmissions Reduction Program (HRRP)

What is the Hospital Readmissions Reduction Program?

HRRP is a Medicare value-based purchasing program that lowers payments to Inpatient Prospective Payment System (IPPS) hospitals with excess readmissions.

Section 3025 of the 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 makes Americans’ health care better by linking payment to the quality of hospital care. It gives hospitals an incentive to improve communication and care coordination so patients and caregivers are more involved in 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. The HRRP, along 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. 

Research shows 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 under HRRP are defined in section 1886(d)(1)(B) of the Social Security Act.

Maryland hospitals are included under the program in readmission measure calculations, but they’re waived from payment reductions because they participate in the Maryland All-Payer 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 assess hospital performance. The ERR measures a hospital’s relative performance and is the ratio of predicted-to-expected readmissions. We calculate an ERR for each condition and procedure 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 under the Hospital Readmissions Reduction Program?

The 30-day risk standardized unplanned readmission measures include:

  • 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 does the Hospital Readmissions Reduction Program adjust payments?

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

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

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

The 30-day Review and Corrections period allows applicable hospitals to review and correct their payment adjustment factor and component result calculations (i.e. Dual Proportion, Peer Group Assignment, Neutrality Modifer, ERR, and Peer Group Median ERRs) for HRRP. Hospitals can’t send in corrections to the underlying claims data or add new claims to the data extract.

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

How will I know if CMS changes 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 find more information about the Hospital Readmissions Reduction Program?

You can find more details on our Hospital Readmissions Reduction Program page.