Hospital Readmissions Reduction Program (HRRP)

The Hospital Readmissions Reduction Program (HRRP) is a Medicare value-based purchasing program that, for example, encourages hospitals to improve communication and care coordination to better engage patients and caregivers in discharge plans and, in turn, reduce avoidable readmissions. The program supports the national goal of improving health care for Americans by linking payment to the quality of hospital care.

Section 1886(q) of the Social Security Act sets forth the statutory requirements for HRRP, which required the Secretary of the U.S. Department of Health and Human Services to reduce payments to subsection (d) hospitals for excess readmissions beginning October 1, 2012 (that is, fiscal year [FY] 2013). In addition, the 21st Century Cures Act directs CMS to assess a hospital’s performance relative to other hospitals with a similar proportion of beneficiaries who are dually eligible for Medicare and full Medicaid benefits beginning in FY 2019. The legislation requires estimated payments under the peer grouping methodology (that is, FY 2019 and onward) equal payments estimated under the non-peer grouping methodology (that is, FY 2013 to FY 2018) to maintain budget neutrality. 

CMS includes the following condition or procedure-specific 30-day risk-standardized unplanned readmission measures in the program:

• Acute myocardial infarction (AMI)
• Chronic obstructive pulmonary disease (COPD)
• Heart failure (HF)
• Pneumonia
• Coronary artery bypass graft (CABG) surgery
• Elective primary total hip arthroplasty and/or total knee arthroplasty (THA/TKA)

CMS calculates the payment reduction and component results for each hospital based on its performance during a rolling performance period. The payment adjustment factor is the form of the payment reduction CMS uses to reduce hospital payments. Payment reductions are applied to all Medicare fee-for-service base operating diagnosis-related group payments during the FY (October 1 to September 30). The payment reduction is capped at 3 percent (that is, a payment adjustment factor of 0.97).

CMS sends confidential Hospital-Specific Reports (HSRs) to hospitals annually. CMS gives hospitals 30 days to review their HRRP data as reflected in their HSRs, submit questions about the calculation of their results, and request calculation corrections. The Review and Correction period for HRRP is only for discrepancies related to the calculation of the payment reduction and component results. Hospitals cannot submit corrections to the underlying claims data or add new claims to the data extract during this period.

After the Review and Correction period, CMS reports HRRP data in the Inpatient Prospective Payment System/Long-Term Care Hospital Prospective Payment System Final Rule HRRP Supplemental Data File on CMS.gov. In addition, CMS reports hospitals’ HRRP data on the data catalog on Data.cms.gov.

More information on the readmission measures and program background is available in the Related Links section.

Supplemental data files from past program years are available by visiting the Archived Supplemental Data Files page.