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Readmissions, Observation, and the Hospital Readmissions Reduction Program.

Rachael B Zuckerman1, Steven H Sheingold1, E John Orav1

  • 1From the Office of the Assistant Secretary for Planning and Evaluation, Department of Health and Human Services, Washington, DC (R.B.Z., S.H.S., E.J.O., J.R., A.M.E.); and the Department of Medicine, Division of General Internal Medicine, Brigham and Women's Hospital and Harvard Medical School, Boston (E.J.O.).

The New England Journal of Medicine
|February 25, 2016
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Summary

Hospitals reduced readmissions after the Affordable Care Act (ACA) penalties, but this was not linked to increased observation stays. Readmission rates fell for targeted and non-targeted conditions, with no evidence of shifting care to observation units.

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Area of Science:

  • Healthcare Policy
  • Health Services Research
  • Public Health

Background:

  • The Affordable Care Act (ACA) introduced the Hospital Readmissions Reduction Program, penalizing hospitals with high readmission rates.
  • Concerns exist that hospitals may circumvent penalties by using observation units instead of formal readmissions.
  • This study investigates the relationship between observation unit use and readmission rates following ACA implementation.

Purpose of the Study:

  • To examine changes in hospital readmission rates and observation unit stays for Medicare beneficiaries after the ACA.
  • To assess whether increased use of observation services correlates with decreased readmission rates.
  • To determine if hospitals shifted care to observation units to avoid readmission penalties.

Main Methods:

  • Utilized interrupted time-series analysis on monthly hospital-level data from October 2007 to May 2015.
  • Compared readmission rates and observation-service use for targeted versus non-targeted conditions.
  • Assessed the correlation between changes in observation unit stays and readmission rates post-ACA implementation.

Main Results:

  • Readmission rates declined for both targeted (21.5% to 17.8%) and non-targeted (15.3% to 13.1%) conditions between 2007 and 2015.
  • Observation unit stays increased for both targeted (2.6% to 4.7%) and non-targeted (2.5% to 4.2%) conditions.
  • No significant association was found between increased observation unit stays and decreased readmissions within hospitals after the ACA.

Conclusions:

  • Observed reductions in readmissions align with hospital responses to ACA incentives and penalties.
  • The study found no evidence that increased use of observation units explains the decline in readmissions.
  • Hospitals appear to be reducing readmissions through means other than shifting care to observation units.