# Responses to readmissions penalties: What can we learn about hospital behavior?

> **NIH AHRQ R36** · BOSTON UNIVERSITY MEDICAL CAMPUS · 2020 · $40,457

## Abstract

Project Abstract
 There are approximately 40 million readmissions in the United States per annum, with a price tag of
more than $40 billion. Starting in 2013, the Hospital Readmission Reduction Program (HRRP) penalizes
hospitals with excess Medicare readmissions for three conditions: acute myocardial infarction, congestive heart
failure, and pneumonia. Elective hip/knee replacements and chronic obstructive pulmonary disease were
added in 2015, and coronary artery bypass grafts were added in 2016. CMS calculates hospitals’ risk-adjusted
readmission rates using a three-year average, and if a hospital’s rate exceeds the national average the
hospital receives a reduction in Medicare reimbursement rates in the following year. The reach of the policy
has been profound; nearly 80% of hospitals receive penalties under the HRRP each year.
 In this study, we will first determine how hospitals with varying readmission rates responded to the
HRRP’s financial incentives. Using data from 2009-2018 for HRRP-eligible conditions, we will study the effects
of hospital distance from the HRRP performance threshold in a given year on future changes in readmission
rates. Further, we include several years of pre-HRRP data to control for potential mean reversion in
readmissions rates. Next, we will evaluate whether characteristics of hospitals or the communities they serve
potentially moderate hospital responsiveness to the HRRP. We will stratify our analyses to determine whether
these, as well as other institutional and geographic characteristics, moderate hospitals’ responses to the
HRRP. We hypothesize that hospitals which are for-profit, larger in size, have a higher Medicare share of total
payments, or have lower patient acuity will demonstrate a larger response to the HRRP’s incentives. Lastly, we
will assess whether the observed reductions in hospital readmissions under the HRRP were associated with
concomitant increases in hospital mortality rates. As a sub-aim, we will also determine whether hospitals’
participation in value-based care programs (e.g. accountable care organizations, bundled payments)
moderates this potential substitution between readmissions and mortality. We hypothesize that hospitals with
greater participation may lower readmissions without increasing mortality, but the converse will be true for
hospitals with lower participation.
 The study’s findings may have important implications for several AHRQ priority populations such as the
elderly, low-income, urban residents, and those with chronic condition who are disproportionately affected by
hospital readmissions. First, our approach allows us to examine hospitals’ responses to different aspects of
the HRRP’s financial incentives, which may suggest modifications to the HRRP’s program design to further
reduce readmissions. Second, we will check for potential unintended consequences in terms of mortality,
which may suggest that quality of care declined under the HRRP for certain hospitals.

## Key facts

- **NIH application ID:** 9924927
- **Project number:** 1R36HS027306-01
- **Recipient organization:** BOSTON UNIVERSITY MEDICAL CAMPUS
- **Principal Investigator:** Kevin Griffith
- **Activity code:** R36 (R01, R21, SBIR, etc.)
- **Funding institute:** AHRQ
- **Fiscal year:** 2020
- **Award amount:** $40,457
- **Award type:** 1
- **Project period:** 2019-12-01 → 2020-08-31

## Primary source

NIH RePORTER: https://reporter.nih.gov/project-details/9924927

## Citation

> US National Institutes of Health, RePORTER application 9924927, Responses to readmissions penalties: What can we learn about hospital behavior? (1R36HS027306-01). Retrieved via AI Analytics 2026-06-11 from https://api.ai-analytics.org/grant/nih/9924927. Licensed CC0.

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