Launched over a decade ago, the Hospital Readmission Reduction Program (HRRP) is a Center of Medicare and Medicaid Services (CMS) initiative to reduce unnecessary readmissions and improve the quality of care for Medicare beneficiaries. This value-based purchasing program, authorized by the Affordable Care Act, penalizes hospitals with high readmission rates.  

The payment penalties are calculated based on Excess Readmission Ratio (ERR). It takes into account predicted-to-expected readmission rates and presents it as a ratio for the following conditions: 

  • Acute myocardial infarction (AMI) 
  • Chronic obstructive pulmonary disease (COPD) 
  • Heart failure (HF) 
  • Pneumonia 
  • Coronary artery bypass graft (CABG) surgery 
  • Elective hip and knee replacement 

Under HRRP, healthcare providers are encouraged to improve discharge plans by enhancing communication and care coordination with patients and their caregivers. While HRRP has significantly reduced readmission rates for the above conditions since its inception, it comes with its own set of challenges and criticisms.  

Positive Effects of HRRP  

The most significant contribution of HRRP is its focus on improving overall patient experience beyond the hospital walls. If care was delivered in a silo before, then after the implementation of HRRP, hospitals may begin to coordinate care with outside providers and caregivers.  

Hospitals are also beginning to emphasize total care delivery. A Medicare fee-for-service analysis revealed that less than 35% of AMI, HF, and pneumonia patients were readmitted within 30 days for the same condition. HRRP’s focus on all-cause readmission rates incentivizes hospitals to look beyond the primary medical problem and consider a patient’s comorbid, psychological, social, and environmental conditions—providing patients with more holistic care and seamless transition from hospital to home.  

In an effort to improve their discharge plans and care coordination, healthcare providers are revamping their systems and processes. This has resulted in an emphasis on patient education and remote care. Hospital-at-Home programs are embraced, and tools afforded by telehealth and Remote Patient Monitoring (RPM) that include virtual visits, video consultations, patient education kits, and the use of at-home, user-friendly medical devices are leveraged to further enhance how post-hospitalization care is delivered.  

The proof is in the data  

The financial penalties imposed by HRRP have proven to motivate significant systematic changes in improving healthcare quality. The program not only managed to reduce readmission rates for the targeted conditions but also had a spill-over effect on nontargeted conditions, including surgical procedures. A Medicare Payment Advisory Commission (MedPAC) study found that just six years after the implementation of HRRP, the unplanned 30-day readmission rate decreased from 19% to 15.4% for AMI, 23.6% to 20.6% for heart failure, and 18.7% to 16.4% for pneumonia. Meanwhile, nontargeted conditions saw a less pronounced decrease, from 16.3% to 14.9%. Experts also found that the decline in readmission trends is consistent with how hospitals have responded to the implementation of the HRRP. 

Negative Effects of the HRRP 

One of the main criticisms of the HRRP is that it disproportionately affects hospitals that generally serve low-income and uninsured patients. These hospitals often have higher readmission rates due to social factors beyond their control, such as poor housing environments and lack of primary care. The higher risk of being penalized by the HRRP may lead to financial losses for these hospitals, which will then result in reduced resources for providing quality healthcare. 

Another inadvertent consequence of heavily penalizing hospitals with ERRs is that it may affect whether patients are given the adequate level of care they require. Hospitals looking to minimize their readmission rates may be more inclined to utilize their outpatient resources rather than the emergency room, like urgent cares or specialty clinics, when it isn’t appropriate. Although hospitals are financially incentivized to reduce their readmission rates, they may also be discouraged from taking in high-risk patients. 

Social risk adjustments 

The 21st Century Cures Act addressed the disproportionate use of ERR to penalize safety-net and rural hospitals by including a stratification requirement for the HRRP. Starting in 2019, hospitals were stratified into five groups by a measure of their social risk. Since then, hospital performances have been evaluated by comparing them to other hospitals in the same group instead of on a national level. This allowed a more fair evaluation.  

Telehealth and RPM Improves Post-discharge Care  

As healthcare providers strive to reduce readmission rates, telehealth and RPM offer valuable tools for enhancing post-discharge care. By identifying high-risk patients early on and enrolling them in a telehealth and RPM program, medical professionals can closely monitor patients' health data in real-time, regardless of their location. This allows for early detection and intervention of potential disease exacerbations, helping to prevent readmissions. 

Telehealth and RPM also provide valuable opportunities for patient education and support. With studies showing that up to 50% of patients do not fully understand or adhere to their physician's advice and instructions, telehealth and RPM can reinforce post-discharge instructions by providing ongoing support to patients. For example, automated medication reminders and scheduled voice calls can help to ensure that patients take their medications as prescribed and stay on track with their care plans. Additionally, providing educational content such as diagnosis-specific videos can strengthen patient understanding. 

In short, telehealth and RPM are innovative solutions enabling healthcare providers to expand their capabilities and actively monitor and educate their patients from anywhere, anytime. By leveraging these technologies, healthcare providers can improve patient outcomes and reduce readmission rates without compromising the quality of care. 

Learn more about reducing readmissions with telehealth and RPM 👇

How to Reduce Readmissions with RPM