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Which Rural and Urban Hospitals Have Received Readmission Penalties Over Time?

Hung P., Casey M., Moscovice I.

The Centers for Medicare & Medicaid Services’ (CMS) Hospital Readmissions Reduction Program reduces Medicare payments for hospitals determined to have “excess” rates of patient readmissions for specific conditions. The purpose of this project was to assess rural-urban differences in the proportion of hospitals that received penalties under the Readmissions Reduction Program over time, and whether condition-specific hospital readmission rates differed for rural and urban hospitals.

Key Findings:

  • Over the first three years of the Readmissions Reduction Program, the proportion of both rural and urban Prospective Payment System (PPS) hospitals receiving penalties has increased.
  • About two-thirds of both rural and urban hospitals received penalties for FY 2013 and 2014; in FY 2015, almost four in five rural and urban hospitals received penalties.
  • Among rural and urban hospitals, the likelihood of receiving readmission penalties varied as a function of hospital characteristics such as size, ownership, and region of the country.
  • Both rural and urban hospitals located in communities with fewer primary care physicians, lower family income and education levels, and a higher proportion of the population age 65 and older were more likely to be penalized.
  • The average payment reduction (as a percentage of Medicare payments) for rural hospitals has exceeded that of urban hospitals for all three years.

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