Association Between Hospital Penalty Status Under the Hospital Readmission Reduction Program and Readmission Rates for Target and Nontarget Conditions.

doi:10.1001/JAMA.2016.18533

Association Between Hospital Penalty Status

Under the Hospital Readmission Reduction Program

and Readmission Rates for Target and Nontarget Conditions

Nihar R. Desai, MD, MPH; Joseph S. Ross, MD, MHS; Ji Young Kwon, MPH; Jeph Herrin, PhD; Kumar Dharmarajan, MD, MBA;

Susannah M. Bernheim, MD, MHS; Harlan M. Krumholz, MD, SM; Leora I. Horwitz, MD, MHS

IMPORTANCE

Readmission rates declined after announcement of the Hospital Readmission

Reduction Program (HRRP), which penalizes hospitals for excess readmissions for acute

myocardial infarction (AMI), heart failure (HF), and pneumonia.

OBJECTIVE To compare trends in readmission rates for target and nontarget conditions,

stratified by hospital penalty status.

DESIGN, SETTING, AND PARTICIPANTS Retrospective cohort study of Medicare fee-for-service

beneficiaries older than 64 years discharged between January 1, 2008, and June 30, 2015, from

2214 penalty hospitals and 1283 nonpenalty hospitals. Difference-interrupted time-series

models were used to compare trends in readmission rates by condition and penalty status.

EXPOSURE Hospital penalty status or target condition under the HRRP.

MAIN OUTCOMES AND MEASURES Thirty-day risk adjusted, all-cause unplanned readmission

rates for target and nontarget conditions.

RESULTS The study included 48 137 102 hospitalizations of 20 351 161 Medicare beneficiaries.

In January 2008, the mean readmission rates for AMI, HF, pneumonia, and nontarget

conditions were 21.9%, 27.5%, 20.1%, and 18.4%, respectively, at hospitals later subject to

financial penalties and 18.7%, 24.2%, 17.4%, and 15.7% at hospitals not subject to penalties.

Between January 2008 and March 2010, prior to HRRP announcement, readmission rates

were stable across hospitals (except AMI at nonpenalty hospitals). Following announcement

of HRRP (March 2010), readmission rates for both target and nontarget conditions declined

significantly faster for patients at hospitals later subject to financial penalties compared with

those at nonpenalized hospitals (for AMI, additional decrease of −1.24 [95% CI, −1.84 to

−0.65] percentage points per year relative to nonpenalty discharges; for HF, −1.25 [95% CI,

−1.64 to −0.86]; for pneumonia, −1.37 [95% CI, −1.80 to −0.95]; and for nontarget conditions,

−0.27 [95% CI, −0.38 to −0.17]; P < .001 for all). For penalty hospitals, readmission rates for

target conditions declined significantly faster compared with nontarget conditions (for AMI,

additional decline of −0.49 [95% CI, −0.81 to −0.16] percentage points per year relative to

nontarget conditions [P = .004]; for HF, −0.90 [95% CI, −1.18 to −0.62; P < .001]; and for

pneumonia, −0.57 [95% CI, −0.92 to −0.23; P < .001]). In contrast, among nonpenalty

hospitals, readmissions for target conditions declined similarly or more slowly compared with

nontarget conditions (for AMI, additional increase of 0.48 [95% CI, 0.01-0.95] percentage

points per year [P = .05]; for HF, 0.08 [95% CI, −0.30 to 0.46; P = .67]; for pneumonia, 0.53

[95% CI, 0.13-0.93; P = .01]). After HRRP implementation in October 2012, the rate of change

for readmission rates plateaued (P < .05 for all except pneumonia at nonpenalty hospitals),

with the greatest relative change observed among hospitals subject to financial penalty.

CONCLUSIONS AND RELEVANCE Medicare fee-for-service patients at hospitals subject to

penalties under the HRRP had greater reductions in readmission rates compared with those

at nonpenalized hospitals. Changes were greater for target vs nontarget conditions for

patients at the penalized hospitals but not at the other hospitals.

JAMA. 2016;316(24):2647-2656. doi:10.1001/jama.2016.18533

Supplemental content

Author Affiliations: Author

affiliations are listed at the end of this

article.

Corresponding Author: Leora I.

Horwitz, MD, MHS, NYU School

of Medicine, 550 First Ave,

TRB 607, New York, NY 10016

(leora.horwitz@nyumc.org).

Research

JAMA | Original Investigation | INNOVATIONS IN HEALTH CARE DELIVERY

(Reprinted) 2647

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T

he Hospital Readmission Reduction Program (HRRP) was

enacted under Section 3025 of the Patient Protection and

Affordable Care Act in March 2010 and imposed finan-

cial penalties beginning in October 2012 for hospitals with

higher-than-expected readmissions for acute myocardial in-

farction (AMI), congestive heart failure (CHF), and pneumonia

among their fee-for-service Medicare beneficiaries.

1

Since the

program’s inception, thousands of hospitals have been sub-

jected to penalties now totaling nearly $1 billion.

2,3

A recent examination of trends in readmission rates dem-

onstrated that across all hospitals, readmission rates signifi-

cantly declined for target conditions (AMI, CHF, pneumonia)

and nontarget conditions, with a greater decline for the for-

mer, following announcement of the HRRP.

4

It is not known

whether trends in readmission rates overall, as well as spe-

cifically for target and nontarget conditions, differed based

on whether a hospital was subject to penalties under the

HRRP. Such information could offer insights into the mecha-

nisms of the association of the HRRP with hospital perfor-

mance. For example, reductions in readmission that are lim-

ited to hospitals later subject to financial penalty and/or that

are larger in magnitude for target vs nontarget conditions

would suggest either that hospitals responded to anticipated

or actual penalties or that penalized hospitals with higher

baseline readmission rates were more able to achieve reduc-

tions. In contrast, more widespread changes would suggest

that all hospitals responded to the threat of potential penal-

ties or were equally able to reduce readmissions. Similarly,

comparable reductions in readmission rates among target

and nontarget conditions would suggest that hospitals imple-

mented broad, system-wide interventions to reduce readmis-

sions, whereas selective reductions in readmissions for target

conditions would suggest that hospitals implemented nar-

rower, condition-specific strategies.

Accordingly, this study compared trends in readmission

rates for target and nontarget conditions among patients hos-

pitalized at hospitals that were and were not penalized under

the HRRP.

Methods

Study Cohort

We used Medicare fee-for-service claims data for January 1,

2008, through June 30, 2015, to identify hospital admis-

sions. Study cohorts were defined consistent with Centers

for Medicare & Medicaid Services (CMS) methods for public

reporting as well as the HRRP; details have been published

previously.

5-7

Briefly, for condition-specific measures, we

used International Classification of Diseases, Ninth Revision,

Clinical Modification (ICD-9-CM) codes to identify dis-

charges of Medicare beneficiaries aged 65 years or older

with a principal discharge diagnosis of acute AMI, CHF, and

pneumonia. To define a cohort for nontarget conditions, we

used methods for the hospital-wide readmission measure,

which has also been described previously.

8,9

This measure

excludes admissions for medical treatment of cancer and

uses ICD-9 codes to assign remaining hospitalizations to 1 of

5 cohorts: medicine, surgery/gynecology, cardiorespiratory,

cardiovascular, or neurology. For this study, we removed

hospitalizations for AMI, CHF, pneumonia, chronic obstruc-

tive pulmonary disease (COPD), and hip or knee arthro-

plasty surgery from the nontarget condition cohort. We

excluded patients with COPD or hip or knee arthroplasty

surgery because these conditions were added to the HRRP

program during the study period. We also excluded patients

discharged from hospitals that were not eligible for the

HRRP (psychiatric, rehabilitation, long-term care, children’s,

cancer, and critical access hospitals, as well as all hospitals

in Maryland). Patients who died during the hospitalization

or did not have at least 30 days of postdischarge enrollment

in Medicare fee for service were excluded, as were patients

who left the hospital against medical advice or were

enrolled in hospice at the time of admission or at any time

in the previous 12 months.

The Yale University Human Investigation Committee ac-

cepted a waiver of consent and approved this analysis.

Hospital Penalty Status

We obtained data on which hospitals were subject to penal-

ties at the time the HRRP was implemented in October 2012

from the CMS website.

10

Hospitals were first privately pro-

vided by CMS data on their readmission rates along with na-

tional rates for CHF in August 2008 (calendar year 2006 data),

then in April 2009, hospitals privately received readmission

rate data for AMI, CHF, and pneumonia (July 2005–June 2008

data) prior to public reporting in July 2009. In April 2010,

shortly after the HRRP was announced, hospitals received simi-

lar reports for July 2006 to June 2009, which included the first

penalty year (initial penalty based on performance in July 2008

to June 2011). By this time, 2 of the 3 years used to determine

HRRP penalties had already passed (eTable in the Supple-

ment). Therefore, prior to actual implementation of the HRRP

in October 2012, poorly performing hospitals were likely aware

of their risk of impending financial penalties.

Key Points

Question Was the Hospital Readmission Reduction Program

(HRRP) associated with different changes in readmission rates for

target and nontarget conditions among penalized and

nonpenalized hospitals?

Findings In this longitudinal cohort study of 48 137 102

hospitalizations among 20 351 161 Medicare fee-for-service

patients across 3497 hospitals, announcement of the HRRP was

associated with significant reductions in readmissions at hospitals

later subject to penalties, with significantly larger reductions for

target conditions. Hospitals not subject to financial penalties

experienced comparable reductions in readmissions for target and

nontarget conditions. Readmission rates plateaued across all

hospitals after implementation of the HRRP.

Meaning Hospitals subject to penalties under the HRRP

had greater reductions in readmission rates compared

with nonpenalized hospitals. Changes were greater for target

vs nontarget conditions at the penalized hospitals, but not

at nonpenalized hospitals.

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Outcome

The outcome was discharge-level, 30-day, risk-adjusted, all-

cause unplanned readmission. For all calculations of readmis-

sion, we used a CMS algorithm to exclude planned readmis-

sions for procedures or diagnoses that are typically elective or

scheduled, such as maintenance chemotherapy and organ

transplantation.

11,12

If a patient experienced multiple readmis-

sions within the postdischarge period of the index hospital-

ization, only the first readmission was counted.

Statistical Analysis

Characteristics of hospitals that were and were not subject to

penalties under the HRRP were obtained from the American

Hospital Association’s 2013 annual survey and were com-

pared using χ

2

testing. To examine time trends, we calculated

a single risk-adjusted monthly readmission rate for each co-

hort: AMI, CHF, pneumonia, and nontarget conditions, strati-

fying by discharge from hospitals that did vs did not receive a

penalty in fiscal year 2013. We used a single rate for each month

to avoid the challenges of estimating and modeling hospital-

level rates for monthly denominators that were often very low.

We estimated the monthly rates for each cohort using a linear

probability model, with readmission as the dependent vari-

able, all risk factors from the corresponding publicly re-

ported measure as independent variables, and an indicator for

each calendar month. All independent variables except month

were centered on their overall mean for the cohort, and the in-

tercept was suppressed to allow all monthly indicators to re-

main in the model. The coefficients for each month were then

used as the estimated adjusted monthly rate for that cohort.

To determine the association of the HRRP with readmis-

sion rates, we estimated a set of interrupted time-series mod-

els using the adjusted monthly rate as the dependent vari-

able. Interrupted time-series models can incorporate both

overall and trend effects of 1 or more events, or interruptions,

in a long-term trend.

13,14

Each model included a monthly time

trend variable, indicators for the postannouncement and post-

implementation periods, and terms for the interaction of an-

nouncement and implementation dates with the overall

monthly trend during the period after that date. In this ap-

proach, the overall trend in readmission rate (time) was de-

constructed into 3 components: the slope of readmission rates

in the pre-HRRP period (January 2008 through March 2010),

the change in slope in the post-HRRP announcement but pre-

HRRP implementation period relative to the pre-HRRP pe-

riod (April 2010 through September 2012), and the additional

change in slope in the post-HRRP implementation period (Oc-

tober 2012 through June 2015) relative to the announcement

period. In addition, the coefficient of the period indicators rep-

resents any overall effect independent of changes in the slopes.

We first examined the association of the HRRP announce-

ment and implementation on trends in readmission rates by

constructing 8 interrupted time-series models: 2 each for AMI,

CHF, pneumonia, and nontarget conditions, stratifying dis-

charges based on whether they were or were not from hospi-

tals subjected to financial penalties. To determine whether

there was a differential effect on discharges from penalty vs

nonpenalty hospitals, we then estimated analogous models

using as the dependent variable the difference in monthly rates

for each condition between penalty and nonpenalty hospi-

tals (“difference models”). To assess whether there was a dif-

ferential change in target vs nontarget conditions, we esti-

mated another set of difference models using as the dependent

variable the difference in monthly rates between each target

condition and all nontarget conditions.

For non–difference-interrupted time-series models, we

used linear regression models with autoregressive error terms.

We first estimated a series of models with no independent vari-

ables and a range of autoregressive terms to identify the best

error structure and then used that structure in the final mod-

els. For the difference-interrupted time-series models, we iden-

tified no autoregressive term and used ordinary linear regres-

sion. All analyses were conducted using SAS software, version

9.3.0 (SAS Institute Inc) and Stata version 14.1 (Stata Corp). All

tests for statistical significance were 2-tailed and evaluated at

a significance level of P<.05.

Results

The study cohort consisted of 48 137 102 hospitalizations and

7 964 608 readmissions among 20 351 161 Medicare fee-for-

service beneficiaries discharged between January 1, 2008, and

June 30, 2015, from 3497 hospitals. Characteristics of hospi-

tals that were and were not subject to penalties under the HRRP

are shown in Table 1. Compared with nonpenalty hospitals

(n = 1283 [37%]), penalty hospitals (n = 2214 [63%]) were larger,

were more likely to be teaching hospitals, and had higher pro-

portions of Medicaid patients. The annual number of hospi-

tal discharges and readmissions for each target condition and

for nontarget conditions, stratified by hospital penalty sta-

tus, is shown in Table 2. The volume of hospitalizations for tar-

get conditions and nontarget conditions declined gradually

over the course of the study period for both penalized and non-

penalized hospitals.

Association of the HRRP With Readmission Rates, Stratified

by Hospital Penalty Status

Monthly, risk-adjusted, all-cause readmission rates for the 3

target conditions and the nontarget conditions for patients dis-

charged from hospitals that were and that were not subject to

the HRRP penalty are shown in the Figure, A-D, and in Table 3.

In January 2008, the mean readmission rates for AMI, CHF,

pneumonia, and nontarget conditions were 21.9%, 27.5%,

20.1%, and 18.4%, respectively, at hospitals later subject to fi-

nancial penalties under the HRRP and 18.7%, 24.2%, 17.4%, and

15.7%, respectively, at hospitals not subject to HRRP penal-

ties. Between January 2008 and March 2010, prior to HRRP

announcement, readmission rates were stable for target and

nontarget conditions regardless of penalty status except for

AMI, for which readmission rates were declining at 0.78 per-

centage points per year (95% CI, −1.18 to −0.38) among hospi-

tals that were not later subject to penalties. After announce-

ment of the HRRP, trends in readmission rates differed

significantly based on hospital penalty status. Specifically, re-

admission rates declined by 1.30 percentage points per year

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(95% CI, −1.88 to −0.72) for AMI compared with the prean-

nouncement period, by 1.72 percentage points per year (95%

CI, −2.36 to −1.08) for CHF, and by 1.36 percentage points per

year (95% CI, −2.09 to −0.63) for pneumonia among patients

discharged from hospitals later subject to penalties (P < .001

for all). In contrast, hospitals not subject to penalties had no

significant change in readmission rates for any of the 3 target

conditions after HRRP announcement (for AMI, −0.08 per-

centage points per year [95% CI, −0.66 to 0.50; P = .79]; for CHF,

−0.45[95% CI, −1.10 to 0.20; P = .18]; and for pneumonia, −0.03

[95% CI, −1.15 to 1.10; P = .96]).

For nontarget conditions, we observed more modest but

statistically significant declines in readmission rates after an-

nouncement of the HRRP regardless of whether patients were

discharged from a hospital that was penalized (for penalty hos-

pitals, −0.81 percentage pointsper year [95% CI, −1.23 to −0.39];

for nonpenalty hospitals: −0.54 [95% CI, −0.85 to −0.23];

P < .001). After HRRP implementation in October 2012, the rate

Table 1. Characteristics of Hospitals That Were and Were Not Subjec t to Penalty Under the Hospital

Readmission Reduction Program

Characteristics

Nonpenalty Hospitals

(n=1283)

Penalty Hospitals

(n=2214) P Value

a

Medicaid patients, %

≤5 236 (18.4) 72 (3.3)

<.001

6-10 136 (10.6) 238 (10.8)

11-15 181 (14.1) 384 (17.3)

16-20 306 (23.9) 634 (28.6)

21-25 175 (13.6) 360 (16.3)

26-30 82 (6.4) 190 (8.6)

>30 86 (6.7) 260 (11.7)

Missing data 81 (6.3) 76 (3.4)

Safety net

No 947 (73.8) 1642 (74.2)

.19

Yes 255 (19.9) 496 (22.4)

Missing data 81 (6.3) 76 (3.4)

Teaching status

Nonteaching 826 (64.4) 1406 (63.5)

<.001

Teaching 376 (29.3) 732 (33.1)

Missing data 81 (6.3) 76 (3.4)

Region

West 297 (23.2) 332 (15.0)

<.001

Midwest 294 (22.9) 464 (21.0)

Northeast 97 (7.6) 405 (18.3)

South 467 (36.4) 937 (42.3)

Associated areas 47 (3.7) 0

Missing data 81 (6.3) 76 (3.4)

Setting

Urban 1103 (86.0) 1927 (87.0)

<.001

Rural 99 (7.7) 211 (9.5)

Missing data 81 (6.3) 76 (3.4)

Ownership

Public 186 (14.5) 330 (14.9)

.16

Not for profit 708 (55.2) 1321 (59.7)

For profit 308 (24.0) 487 (22.0)

Missing data 81 (6.3) 76 (3.4)

Beds

6-99 546 (42.6) 571 (25.8)

<.001

100-199 278 (21.7) 633 (28.6)

200-299 161 (12.6) 380 (17.2)

300-399 97 (7.6) 222 (10.0)

400-499 52 (4.1) 126 (5.7)

≥500 68 (5.3) 206 (9.3)

Missing data 81 (6.3) 76 (3.4)

a

By χ

2

test of independence across

penalty hospitals.

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of change for readmission rates plateaued relative to the change

observed after announcement but prior to implementation for

both target and nontarget conditions among both penalty and

nonpenalty discharges (P < .05 for all except pneumonia at non-

penalty hospitals), with the greatest relative change ob-

served among hospitals subject to financial penalty. As a re-

sult, readmission rates for target and nontarget conditions have

not significantly changed since October 2012 across hospitals

regardless of penalty status.

The results of the difference interrupted time-series mod-

els, which determine the difference between readmission rates

for penalty vs nonpenalty hospitals, stratified by condition, are

shown in Table 4. Prior to the announcement of the HRRP, re-

admission rates for patients at hospitals later subject to a pen-

alty were declining less rapidly than those for patients at hos-

pitals not later subject to financial penalties (for AMI, increase

of 0.72 percentage points per year for penalty hospital dis-

charges vs nonpenalty hospital discharges [95% CI, 0.26-

1.19]; for CHF, 0.35 [95% CI, 0.04-0.65]; and for pneumonia,

0.48 [95% CI, 0.15-0.81]; P < .05 for all). However, between

April 2010 and October 2012, after the announcement but prior

to the actual implementation of the HRRP, readmission rates

began to improve significantly faster for patients at hospitals

later subject to financial penalties (for AMI, decrease of −1.24

percentage points per year for penalty hospital discharges vs

nonpenalty hospital discharges [95% CI, −1.84 to −0.65]; for

CHF, −1.25 [95% CI, −1.64 to −0.86]; and for pneumonia, −1.37

[95% CI, −1.80 to −0.95]; P < .001 for all).

For nontarget conditions, penalty and nonpenalty hospi-

tals were improving at similar rates prior to HRRP announce-

Table 2. Hospitalizations and Readmissions From 2008 to 2015 in Each Cohort by Year Stratified by Penalty Status

Cohort

No. of

Hospitals

No. of Hospitalizations or Readmissions

2008 2009 2010 2011 2012 2013 2014 2015

a

Acute myocardial infarction

hospitalizations

Penalty 2209 133 483 126 890 125 658 124 379 115 804 121 660 118 236 60 415

Nonpenalty 1045 57 869 55 131 55 125 55 180 51 419 54 591 53 799 27 582

Total 3254 191 352 182 021 180 783 179 559 167 223 176 251 172 035 87 997

Acute myocardial infarction

readmissions

Penalty 2209 27 698 26 307 25 514 24 604 21 836 21 344 20 171 10 317

Nonpenalty 1045 9694 8812 8763 8890 7928 8020 7713 4098

Total 3254 37 392 35 119 34 277 33 494 29 764 29 364 27 884 14 415

Heart failure hospitalizations

Penalty 2214 335 763 339 553 334 493 320 622 280 539 293 161 289 678 155 126

Nonpenalty 1108 119 039 122 125 120 523 117 305 104 812 112 545 114 485 62 040

Total 3322 454 802 461 678 455 016 437 927 385 351 405 706 404 163 217 166

Heart failure readmissions

Penalty 2214 87 625 88 818 87 304 81 449 68 746 68 621 67 247 36 170

Nonpenalty 1108 26 246 26 431 25 973 25 022 22 287 23 145 23 553 12 829

Total 3322 113 871 115 249 113 277 106 471 91 033 91 766 90 800 48 999

Pneumonia hospitalizations

Penalty 2214 260 675 243 812 242 873 250 316 218 394 228 120 201 725 119 459

Nonpenalty 1126 105 959 98 298 97 703 101 054 89 285 94 024 85 051 51 086

Total 3340 366 634 342 110 340 576 351 370 307 679 322 144 286 776 170 545

Pneumonia readmissions

Penalty 2214 49 529 47 510 47 380 47 872 40 181 40 091 35 482 20 061

Nonpenalty 1126 16 977 15 652 15 406 15 948 14 321 14 561 13 321 7624

Total 3340 66 506 63 162 62 786 63 820 54 502 54 652 48 803 27 685

Nontarget condition

hospitalizations

b

Penalty 2214 4 213 504 4 129 709 4 123 491 4 095 852 3 614 980 3 705 051 3 571 020 1 795 772

Nonpenalty 1283 1 690 022 1 637 626 1 627 903 1 628 501 1 464 849 1 533 120 1 498 431 760 407

Total 3497 5 903 526 5 767 335 5 751 394 5 724 353 5 079 829 5 238 171 5 069 451 2 556 179

Nontarget condition

readmissions

b

Penalty 2214 709 504 693 997 694 795 688 267 591 673 589 432 571 710 286 030

Nonpenalty 1283 243 216 234 063 234 023 234 951 207 235 213 928 210 175 106 518

Total 3497 952 720 928 060 928 818 923 218 798 908 803 360 781 885 392 548

a

Includes January 1 through June 30, 2015.

b

Excludes acute myocardial infarction, heart failure, pneumonia, chronic obstructive pulmonary disease, and hip or knee arthroplasty surgery.

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Association Between Hospital Penalty Status Under the Hospital Readmission Reduction Program and Readmission Rates for Target and Nontarget Conditions.

Citations

Heart Disease and Stroke Statistics—2019 Update: A Report From the American Heart Association

Heart Disease and Stroke Statistics-2018 Update: A Report From the American Heart Association.

Heart Disease and Stroke Statistics—2020 Update: A Report From the American Heart Association

Heart Disease and Stroke Statistics-2021 Update: A Report From the American Heart Association.

Heart Disease and Stroke Statistics—2022 Update: A Report From the American Heart Association

References

Segmented regression analysis of interrupted time series studies in medication use research

Use of Interrupted Time Series Analysis in Evaluating Health Care Quality Improvements

Readmissions, Observation, and the Hospital Readmissions Reduction Program

An Administrative Claims Measure Suitable for Profiling Hospital Performance on the Basis of 30-Day All-Cause Readmission Rates Among Patients With Heart Failure

An Administrative Claims Measure Suitable for Profiling Hospital Performance Based on 30-Day All-Cause Readmission Rates Among Patients With Acute Myocardial Infarction

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