Readmission penalties are expected to increase in 2024

In fiscal year (FY) 2023, around 2,300 hospitals faced penalties from the Hospital Readmissions Reduction Program (HRRP), the lowest number of hospitals penalized in almost 10 years. However, this trend is likely to be reversed for FY 2024.

For FY 2024, CMS analyzed claims data from July 2019 to December 2019 and from July 2020 to June 2022. Data from the first half of 2020, as well as from hospitals with approved extraordinary circumstances exceptions, continues to be excluded.

CMS has also resumed use of its pneumonia readmissions measure, which was excluded from HRRP last year.

Overall, 70.1% of hospitals of hospitals will receive penalties of less than 1% of their readmissions in FY 2024, compared to 67.1% of hospitals in FY 2023. In addition, 7.5% of hospitals will receive penalties of 1% or more in 2024 while 22.4% of hospitals will be not assessed for penalties.

For FY 2024, the average penalty for hospitals with the highest proportion of patients who are eligible for both Medicare and Medicaid is 0.29%, while the average penalty for hospitals with the lowest proportion of these patients is 0.34%. During FY 2023, the average penalties for these groups were 0.23% and 0.37%, respectively.

Commentary

According to Akin Demehin, senior director for quality and patient safety policy at the American Hospital Association, the higher number of readmission penalties for FY 2024 likely reflect hardships hospitals experienced during peak pandemic months in both 2021 and 2022.

"It's probably going to be a messy couple of years," Demehin said. "The ways in which COVID-19 interacts with quality performance on things like readmissions will take time to settle out completely."

Before 2020, readmission penalties were increasing due to more measures being added to HRRP, but health experts say it's difficult to compare readmission rates during the pandemic period. Several factors likely influenced readmission rates, including spikes in COVID-19 cases due to new variants affecting hospitals differently and at different points in time.

"You had employment issues in different geographic markets and a pretty substantial increase in traveling nurses, which changed how care was being delivered to patients," said Rick Kes, a senior healthcare analyst at RSM.

Over the last few years, hospitals have focused more on quality and length of patient stay, but Kes said there are still areas where hospitals can improve to further decrease readmissions. Some other problems that can negatively impact readmission rates include understaffing in post-acute care facilities and home health agencies and hospitals being unable to discharge patients. (Devereaux, Modern Healthcare , 9/15)

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