A Statistical Analysis of Penalty vs. Incentive Designs for Hospital Readmission

摘要

The Hospital Readmission Reduction Program (HRRP) aims to reduce the rate of hospital readmissions in the U.S. A hospital readmission occurs when a patient is admitted to a hospital within 30 days of discharge from a previous stay. HRRP applies a penalty mechanism to reimbursements payments from the Centers of Medicare and Medicaid Services (CMS) to the hospital base on the hospital's excess readmission ratio (ERR). Critics of HRRP point out that hospitals with poor readmission rates are receiving less money to make meaningful changes, widening the disparity gap. Therefore, this study proposes two new mechanism designs for consideration in the HRRP by incorporating a financial incentive. We present a statistical analysis comparing the two new incentive mechanism designs to the current HRRP penalty mechanism design. We report the expected impact of the new policies based on FY 2018 CMS data. Our results show that less than 4% of hospitals in each peer group received the maximum penalty for FY 2018 under current penalty mechanism while 93-96% of hospitals would be eligible for receiving incentives in our proposed incentive mechanism. Moreover, a reduction between 30-42% of penalized hospitals across all peer groups are available by moving to the hybrid mechanism.