• Charleen Hsuan, Thomas M Braun, Ninez A Ponce, and Geoffrey J Hoffman.
• Department of Health Policy and Administration, Pennsylvania State University, University Park, PA, USA. chsuan@psu.edu.
• J Gen Intern Med. 2020 Dec 1; 35 (12): 356435713564-3571.

BackgroundTo address concerns that the Hospital Readmissions Reduction Program (HRRP) unfairly penalized safety net hospitals treating patients with high social and functional risks, Medicare recently modified HRRP to compare hospitals with similar proportions of high-risk, dual-eligible patients ("peer group hospitals"). Whether the change fully accounts for patients' social and functional risks is unknown.ObjectiveExamine risk-standardized readmission rates (RSRRs) and hospital penalties after adding patient-level social and functional and community-level risk factors.DesignUsing 2000-2014 Medicare hospital discharge, Health and Retirement Study, and community-level data, latent factors for patient social and functional factors and community factors were identified. We estimated RSRRs for peer groups and by safety net status using four hierarchical logistic regression models: "base" (HRRP model); "patient" (base plus patient factors); "community" (base plus community factors); and "full" (all factors). The proportion of hospitals penalized was calculated by safety net status.Patients20,255 fee-for-service Medicare beneficiaries (65+) with eligible index hospitalizations MAIN MEASURES: RSRRs KEY RESULTS: Half of safety net hospitals are in peer group 5. Compared with other hospitals, peer group 5 hospitals (most dual-eligibles) treated sicker, more functionally limited patients from socially disadvantaged groups. RSRRs decreased by 0.7% for peer groups 2 and 4 and 1.3% for peer group 5 under the patient and full (versus base) models. Measured performance improved after adjusting for patient risk factors for hospitals in peer group 4 and 5 hospitals, but worsened for those in peer groups 1, 2, and 3. Under the patient (versus base) model, fewer safety net hospitals (48.7% versus 51.3%) but more non-safety net hospitals (50.0% versus 49.1%) were penalized.ConclusionsPatient-level risk adjustment decreased RSRRs for hospitals serving more at-risk patients and proportion of safety net hospitals penalized, while modestly increasing RSRRs and proportion of non-safety net hospitals penalized. Results suggest HRRP modifications may not fully account for hospital variation in patient-level risk.

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