Excess Readmission vs Excess Penalties: Maximum Readmission Penalties as a Function of Socioeconomics and Geography.

BACKGROUND: The Hospital Readmission Reduction Program (HRRP) penalizes hospitals with "excess" readmissions up to 3% of Medicare reimbursement. Approximately 75% of eligible hospitals received penalties, worth an estimated $428 million, in fiscal year 2015.
OBJECTIVE: To identify demographic and socioeconomic disparities between matched and localized maximum-penalty and no-penalty hospitals.
DESIGN: A case-control study in which cases included were hospitals to receive the maximum 3% penalty under the HRRP during the 2015 fiscal year. Controls were drawn from no-penalty hospitals and matched to cases by hospital characteristics (primary analysis) or geographic proximity (secondary analysis).
SETTING: A selectiion of 3383 US hospitals eligible for HRRP. PARTICIPANTS: Thirty-nine case and 39 control hospitals from the HRRP cohort. MEASUREMENTS: Socioeconomic status variables were collected by the American Community Survey. Hospital and health system characteristics were drawn from Centers for Medicare and Medicaid Services, American Hospital Association, and Dartmouth Atlas of Health Care. The statistical analysis was conducted using Student t tests.
RESULTS: Thirty-nine hospitals received a maximum penalty. Relative to controls, maximum-penalty hospitals in counties with lower SES profiles are defined by increased poverty rates (19.1% vs 15.5%, 𝑃 = 0.015) and lower rates of high school graduation (82.2% vs 87.5%, 𝑃 = 0.001). County level age, sex, and ethnicity distributions were similar between cohorts.
CONCLUSIONS: Cases were more likely than controls to be in counties with low socioeconomic status; highlighting potential unintended consequences of national benchmarks for phenomena underpinned by environmental factors; specifically, whether maximum penalties under the HRRP are a consequence of underperforming hospitals or a manifestation of underserved communities.