Hosp. Readmission Reduction

Hospital Readmissions Reduction Program (HRRP)

What is the Hospital Readmissions Reduction Program?

HRRP is a Medicare value-based purchasing program that encourages hospitals to improve communication and care coordination to better engage patients and caregivers in discharge plans and, in turn, reduce avoidable 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?

HRRP improves Americans’ health care by linking payment to the quality of hospital care. CMS incentivizes hospitals to improve communication and care coordination efforts to better engage 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. HRRP, along with the Hospital Value Based Purchasing (HVBP) and 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 that hospital readmission rates differ across the nation. This gives us an opportunity to improve the quality of care and save taxpayer dollars by incentivizing providers to reduce excess readmissions.

What are applicable Hospital Readmissions Reduction Program hospitals?

Section 1886(d)(1)(B) of the Social Security Act defines applicable hospitals under HRRP.

CMS exempts Maryland hospitals from HRRP payment reductions because an agreement between CMS and Maryland.

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 a ratio of the predicted-to-expected readmissions rates. 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 HRRP 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 exclude 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 corresponds to the percent a hospital’s payment is reduced. The payment adjustment factor is a weighted average of a hospital's performance across the six HRRP measures during the three-year HRRP performance period. 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 Methodology section.

What is the Review and Correction period?

The 30-day Review and Correction period allows applicable hospitals to review and correct their HRRP Payment Adjustment Factor and component result calculations as reflected in their HSR (i.e., Dual Proportion, Peer Group Assignment, Neutrality Modifier, ERR, and Peer Group Median ERRs) prior to them being used to adjust payments. Hospitals can’t submit corrections to the underlying claims data or add new claims to the data extract during this period.

Each program year, we let hospitals know the exact dates of the Review and Correction period on the QualityNet website.

How will I know whether CMS incorporated changes to the Hospital Readmissions Reduction Program?

Changes to the program requirements happen through rulemaking. These changes are published annually 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?

For more detailed information, visit the CMS Hospital Readmissions Reduction Program page or QualityNet Hospital Readmissions Reduction Program page.

Page Last Modified:
08/11/2020 09:44 AM