A bipartisan group of House and Senate lawmakers March 10 introduced legislation that the AHA said would improve the Medicare Hospital Readmissions Reduction Program (HRRP) by factoring sociodemographic status into hospital readmission rates.

The Affordable Care Act’s HRRP aims to reduce preventable readmissions by penalizing hospitals with 30-day readmission rates in excess of what was expected for certain conditions after adjusting for case mix. However, readmissions are influenced by factors beyond the hospital’s control, and studies have shown that the challenges faced by urban and rural, low-income populations bear directly on those outcomes.

The “Establishing Beneficiary Equity in the Hospital Readmission Program Act,” S. 688/H.R. 1343, would require the Centers for Medicare & Medicaid Services (CMS) to account for patient sociodemographic status when calculating the risk-adjusted readmissions penalties. The legislation’s sponsors – Sens. Rob Portman, R-Ohio, and Joe Manchin, D-W.Va, and Reps. Jim Renacci, R-Ohio, and Eliot Engel, D-N.Y. – said it would overall improve quality of care, increase accountability for all inpatient hospitals and further reduce preventable Medicare readmissions.

In a press statement, AHA Executive Vice President Rick Pollack expressed the association’s support for the legislation. “When recovering from illness or injury, everyone wants to get better as quickly as possible,” Pollack said. “That’s why hospitals are strongly committed to reducing unnecessary readmissions.” He said the legislation “will improve the fairness of CMS’ readmissions program and help ensure hospitals have the critical resources needed to care for their most vulnerable patients.”

For the fiscal year (FY) beginning Oct. 1, 2014, hospitals that run afoul of the HRRP standard face a reduction of up to 3% in their Medicare reimbursements. When calculating each hospital’s readmission rate, CMS uses three full years of previous data to determine hospital performance. For penalties that will be imposed in FY 2015, CMS based its calculations on hospital readmissions that occurred from July 2010 through June 2013.

The HRRP measures put pressure on hospitals to improve patient care and better coordinate services after discharge through relationships with home health service organizations and skilled nursing facilities. But safety-net hospital leaders say the penalties create an unlevel playing field. They say the penalties, combined with spending cuts imposed through other Medicare legislation, threaten their long-term viability.

Through the HRRP, CMS calculates a predicted rate and an observed rate of readmissions for every hospital in the nation. It then calculates the variation between those two rates, and hospitals with excessive readmissions incur a penalty. But, as hospital leaders point out, CMS does not account for sociodemographic factors beyond the hospital’s control when calculating excess readmissions.  As a result, hospitals caring for disadvantaged patients tend to incur higher readmission penalties.

“For example, many patients simply cannot afford the treatments necessary to ensure recovery from illness and injury,” the AHA’s Pollack observed. “Community services, such as primary care, mental health services, physical therapy and easy access to appropriate food, are not available to some patients when they are released from the hospital.”

S. 688/H.R. 1343 will “greatly improve the fairness of readmission penalties by taking into account both the proportion of the hospital’s patients eligible for both Medicare and Medicaid and the patients’ sociodemographic status,” he added. “This recalibration ensures hospital performance is compared equally while maintaining an incentive for all hospitals to reduce unnecessary readmissions.”