Association of Inclusion of Medicare Advantage Patients in Hospitals’ Risk-Standardized Readmission Rates, Performance, and Penalty Status

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Abstract
Hospital readmissions are common, costly, and associated with substantial morbidity and mortality.1 Reducing readmissions has become a major priority for policy makers. Under the Hospital Readmissions Reduction Program (HRRP), the Centers for Medicare & Medicaid Services (CMS) has publicly reported qualitative assessments of hospital performance since 2009, including whether a hospital’s risk-standardized readmission rate (RSRR) is different from the national average readmission rate without identifying the precise RSRR estimate. Starting in 2012, CMS imposed financial penalties for hospitals with higher than expected rates of readmission.2 The HRRP calculates readmission rates exclusively for traditional Medicare (TM) beneficiaries, while rates of readmission for persons covered by the rapidly growing Medicare Advantage (MA) program are neither publicly reported nor financially penalized. The exclusion of MA patients from the HRRP has substantial implications because approximately 22 million of approximately 60 million Medicare beneficiaries (35%) were enrolled in MA plans in 2019.3

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