The Long-Term Effect of Financial Penalties on 30-Day Hospital Readmission Rates

Background: Although the immediate effect of financial penalties imposed by the Hospital Readmissions Reduction Program (HRRP) was a decrease in 30-day hospital readmission rates, the long-term effects are unclear. The authors studied 30-day readmissions before and immediately after HRRP penalties and during the most recent period before the COVID-19 pandemic and examined whether readmission trends differed between penalized and non-penalized hospitals.Methods: Centers for Medicare & Medicaid Services hospital archive data and US Census Bureau data were used to analyze hospital characteristics, including readmission penalty status, and hospital service area (HSA) demographic information, respectively. These two datasets were matched by HSA crosswalk files, available through the Dartmouth Atlas files. Using data from 2005-2008 as baseline, the authors examined hospital readmission trends before (2008-2011) and after penalties (during three periods: 2011-2014, 2014-2017, 2017-2019). Mixed linear models were used to examine readmission trends through periods, and differences by hospital penalty status without and with adjustment for hospital characteristics and HSA demographic information.Results: For all hospitals combined, rates for 2008-2011 vs. 2011-2014 were as follows: pneumonia, 18.6% vs. 17.0%; heart failure (HF), 24.8% vs. 22.0%; acute myocardial infarction (AMI), 19.7% vs. 17.0% (p < 0.001 for all three condi-tions). Rates for 2014-2017 vs. 2017-2019 were as follows: pneumonia, 16.8% vs. 16.8% (p = 0.87), HF, 21.7% vs. 21.9% (p < 0.001); AMI, 16.0% vs. 15.8% (p < 0.001). Compared to penalized hospitals, using difference-in-differences, non-penalized hospitals had a significantly greater increase for two conditions between the 2014-2017 and 2017-2019 periods: pneumonia 0.34%, p < 0.001; and HF 0.24%, p = 0.002.Conclusion: Long-term readmission rates are lower than pre-HRRP rates, with recent trends decreasing further for AMI, stabilizing for pneumonia, and increasing for HF.