Will Hospital Peer Grouping by Patient Socioeconomic Status Fix the Medicare Hospital Readmission Reduction Program...

Area of Science:

• Health Services Research
• Healthcare Policy
• Hospital Management

Background:

• The 21st Century Cures Act mandated the Centers for Medicare & Medicaid Services (CMS) to revise the Hospital Readmissions Reduction Program (HRRP).
• The revision aimed to eliminate bias in penalty calculations for hospitals serving low socioeconomic status (SES) populations.
• A study analyzed the impact of introducing SES hospital peer groups on penalty distribution.

Purpose of the Study:

• To evaluate the effect of SES hospital peer groups on the number and distribution of hospitals penalized under the HRRP.
• To determine if the proposed SES peer group methodology accurately addresses biases in readmission penalty calculations.

Main Methods:

• Utilized CMS analysis files for the fiscal year 2017 HRRP final rule and Disproportionate Share Hospital adjustments.
• Assigned hospitals to peer groups based on socioeconomic status (SES).
• Calculated median excess readmission ratios within peer groups and analyzed penalty patterns.

Main Results:

• CMS's proposed single SES peer group may overlook significant variations in readmission rates across six clinical conditions.
• Hospitals with fewer surgical patients showed higher readmission rates, contrary to expectations.
• Lower-volume hospitals had fewer readmissions for medical conditions, a finding requiring further investigation.

Conclusions:

• The introduction of SES hospital peer groups could lead to unintended shifts in penalty distribution due to distorted peer group medians.
• Further research is needed to understand the relationship between lower hospital volume and reduced readmissions in medical cases.