2,499 hospitals will see a reduction in Medicare payments for 2022 as penalty for excessive readmissions. These hospitals penalized for excessive readmissions represent 47% of American hospitals.

The Hospital Readmission Reduction Program (HRRP) was created by the Affordable Care Act as an effort to make hospitals better follow patients after discharge. The effort was initiated in part to counteract the financial incentives hospitals had in getting more business from readmitting patients within a short time of discharge. One example, according to Kaiser Health News, in 2008 nearly ¼ of Medicare heart failure patients were back in the hospital within thirty days.

Since institution of the HRRP program, heart failure readmissions have dropped to 20%. A similar drop as identified in heart attack patients, pneumonia patient rates, readmissions for COPD, and hip and knee replacements, to name a few.

Medicare’s program creates a financial incentive to instead better follow patients, and publishes the names of hospitals that are getting penalized. Programs like this, and the program to penalize hospitals for medical mistakes, seek to incentivize hospitals to develop policies and procedures to ensure that good care is provided, that patients do not endure additional risks simply because they are in the hospital, and that patients receive adequate discharge and follow up planning.

The average HRRP penalty is a .64% reduction in payment for each Medicare patient; a penalty that averages some $200,000 per hospital. The maximum HRRP penalty is a 3% reduction.

You can look at the list of hospitals reviewed and penalized by the program to see how your local hospital is doing, and how it has done over the last seven years. You can see, for example, that Capital Medical Center and Swedish Issaquah will see a 2% reduction in Medicare payments due to excessive readmissions, the highest in the state.