Hospital Readmissions Reduction Program

Overview

Section 3025 of the 2010 Affordable Care Act (Public Law 111-148) requires the Secretary of the Department of Health and Human Services to establish a Hospital Readmissions Reduction Program whereby the Secretary would reduce Inpatient Prospective Payment System (IPPS) payments to hospitals for excess readmissions beginning on or after October 1, 2012 (Fiscal Year [FY] 2013).

The Affordable Care Act further requires the Secretary to adopt the three National Quality Forum (NQF)-endorsed 30-day Risk-Standardized Readmission measures for acute myocardial infarction (AMI), heart failure (HF), and pneumonia (PN) for the Hospital Readmissions Reduction Program beginning October 2012.

To comply with these requirements, the Centers for Medicare & Medicaid Services (CMS) will calculate Excess Readmission Ratios for these three readmission measures based on the NQF-endorsed methodology, using discharges from a prior period.

The Excess Readmission Ratios will be used to determine the payment adjustment factors for each eligible hospital. As proposed in the FY 2014 Inpatient Prospective Payment System (IPPS) Proposed Rule, CMS intends to report these ratios in the FY 2014 IPPS Final Rule in August of 2013 as well as on the Hospital Compare website in October 2013.

For information regarding the calculation of the payment adjustment factors, see Readmissions Reduction Program on the CMS website.

The Review and Corrections Process

For the Hospital Readmissions Reduction Program, CMS will provide hospitals with a period of 30 days to review and submit corrections on information used to calculate their Excess Readmission Ratios. This 30-day period begins the day hospitals’ Hospital-Specific Reports (HSRs), including the accompanying discharge-level information, are posted to their QualityNet accounts and ends 30 days later. For FY 2014, the 30-day review period is from June 13, 2013, to July 12, 2013.

The discharge-level worksheets that hospitals received as part of their HSR provide the data needed to replicate the Excess Readmission Ratio. (See the Description of the FY 2014 30-Day Readmission Measures Hospital-Specific Report, for replication instructions and an example.) However, the Review and Correction process that CMS has proposed does not allow hospitals to submit additional corrections related to the underlying claims data, or to add new claims to the data extract used to calculate the ratios.

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