Projected impact of the Hospital Readmissions Reduction Program on Medicare prospective inpatient payments in North Carolina

Introduction: Hospital readmissions are considered as potentially avoidable utilizations which increase cost. Under the Affordable Care Act’s Hospital Readmissions Reduction Program, hospitals have been incentivized to contain or reduce their readmission rates starting 2012 or face a penalty of 1% deduction of Medicare reimbursements. This study will look at how readmissions will affect reimbursements for treatment of three clinical indications: acute myocardial infarction (AMI), heart failure (HF) and pneumonia (PN). Methods: The study will use data from the 2010 healthcare cost and utilization project (HCUP) for North Carolina. Patients with one or more hospital readmissions for AMI, HF or PN with Medicare as a payer will be included in the analysis. National estimates for readmission benchmarks will be assessed from literature. Median readmission rate in North Carolina will be considered as the state benchmark. Hospitals will be categorized according to their bed sizes (<100, 100-200, >200) region of location (piedmont, coastal, mountains) and readmission rates (at or under the benchmarks, over the benchmarks) for each indication. Total reimbursements from Medicare and projected revenue loss after 1% deduction from reimbursements will be calculated for each hospital category and indication. Analysis of variance tests and descriptive statistics will be used to compare average hospital readmission rates and average revenue lost due to penalty, across regions and within regions. Results will be displayed in tables and visually represented in maps. Conclusion: The study will inform budget impact of the program and give estimates on cost and resource savings.