Hospital Readmissions Reduction Program (HRRP)

What is the Hospital Readmissions Reduction Program?

HRRP is a Medicare value-based purchasing program that, for example, encourages hospitals to improve communication and care coordination to better engage patients and caregivers in discharge plans and, in turn, reduce avoidable readmissions.

Section 1886(q) of the Social Security Act sets forth the statutory requirements for HRRP, which required the Secretary of the Department of Health and Human Services to establish HRRP starting October 1, 2012 (i.e., federal fiscal year [FY] 2013).

Why is the Hospital Readmissions Reduction Program important?

HRRP improves Americans’ health care by linking payment to the quality of hospital care. CMS incentivizes hospitals, for example, to improve communication and care coordination efforts to better engage patients and caregivers on post-discharge planning.

We’ve included measures of conditions and procedures that make a big difference in the lives of large numbers of people with Medicare. HRRP, along with the Hospital Value Based Purchasing (Hospital VBP) and Hospital-Acquired Condition (HAC) Reduction Programs, is a major part of how we add quality measurement, transparency, and improvement to value-based payment in the inpatient care setting. 

Research shows that hospital readmission rates differ across the nation. This gives us an opportunity to improve the quality of care and save taxpayer dollars by incentivizing providers to reduce excess readmissions.

What are applicable Hospital Readmissions Reduction Program hospitals?

For a full description of subsection (d) hospitals, refer to the Code of Federal Regulations (42 CFR 412.20).

CMS exempts Maryland hospitals from HRRP payment reductions because an agreement between CMS and Maryland.

What measures are included in the Hospital Readmissions Reduction Program?

We use the excess readmission ratio (ERR) to assess hospital performance. The ERR measures a hospital’s relative performance and is a ratio of the predicted-to-expected unplanned readmissions rates. We calculate an ERR for each condition or procedure included in the program:

• Acute Myocardial Infarction (AMI)
• Chronic Obstructive Pulmonary Disease (COPD)
• Heart Failure (HF)
• Pneumonia
• Coronary Artery Bypass Graft (CABG) Surgery
• Elective Primary Total Hip Arthroplasty and/or Total Knee Arthroplasty (THA/TKA)

HRRP doesn’t include the Hospital-Wide All-Cause Readmission (HWR) measure, which is included in the Hospital Inpatient Quality Reporting (IQR) Program.

What counts as a readmission under the Hospital Readmissions Reduction Program?

The HRRP 30-day risk standardized unplanned readmission measures:

• capture unplanned readmissions that happen within 30 days of discharge from the index (i.e., initial) admission.
• The readmission measures include patients who are readmitted to the same hospital, or another applicable acute care hospital, no matter the principal diagnosis. The measures exclude some planned readmissions.

How does the Hospital Readmissions Reduction Program adjust payments?

For each eligible hospital, we calculate the payment adjustment factor. The payment adjustment factor corresponds to the percent a hospital’s payment is reduced. The payment adjustment factor is a weighted average of a hospital’s performance across the readmission measures during the HRRP performance period. We apply the payment adjustment factor for all discharges in the applicable fiscal year, no matter the condition.

For more information, visit the QualityNet Methodology page or download the HRRP Payment Reduction Methodology Infographic on the QualityNet Resources page.

What is the Review and Correction period?

The 30-day Review and Correction period allows applicable hospitals to review and correct their HRRP payment reduction and component result calculations as reflected in their Hospital Specific Report (HSR) (i.e., Payment Adjustment Factor, Dual Proportion, Peer Group Assignment, Neutrality Modifier, ERR, and Peer Group Median ERRs) prior to them being used to adjust payments. Hospitals cannot submit corrections to the underlying claims data or add new claims to the data extract during this period.

Each program year, we let hospitals know the exact dates of the Review and Correction period via the Hospital Inpatient Value-Based Purchasing (HVBP) Listserv or on the QualityNet website.

How will I know whether CMS incorporated changes to the Hospital Readmissions Reduction Program?

Changes to the program are announced via the HVBP QualityNet listserv. Visit the Sign Up for Email Updates page on the QualityNet website and select the “HVBP Notify” List under “Quality Reporting” to join the HVBP Listserv.

Where can I find more information about the Hospital Readmissions Reduction Program?

For more detailed information, visit the CMS Hospital Readmissions Reduction Program page or QualityNet Hospital Readmissions Reduction Program page.