Medicare’s Hospital Readmissions Reduction Program (HRRP) was created to incentivize hospitals to reduce readmissions among Medicare patients. A number of recent studies have previously suggested that the HRRP has been effective towards meeting this goal.

A new study in Health Affairs by research assistant professor of strategy Christopher Ody, University of Chicago PhD candidate Lucy Msall, Bruce V. Rauner Professor of Business Administration Leemore S. Dafny, PhD, professor of health care policy David C. Grabowski, PhD, and Otto Eckstein Professor of Applied Economics David M. Cutler, PhD, suggests these reductions are illusory or overstated.

The study team found that the implementation of the HRRP coincided with a change in hospital coding standards. The expansion of secondary diagnoses under this coding had the unintended effect of falsely inflating patient severity, which in turn led to inflated estimates of the HRRP.  The authors suggest that this coding change explains half the decline in risk-adjusted readmissions attributed to the HRRP.

Once the researchers accounted for the fact that conditions with higher baseline readmission rates experienced larger decreases in readmission rates, the decrease in readmission rates for the HRRP targeted conditions and hospitals were no longer larger than the decreases for the comparison groups.

The paper has received widespread media coverage including stories in the New York Times and Modern Healthcare.