Research Project

Kaestner, Robert

The Intended and Unintended Consequences of the Hospital Readmission

Principal Investigator
Kaestner, Robert
Funding Source
Agency for Healthcare Research and Quality


The Hospital Readmissions Reduction Program (HRRP) was established by the Affordable Care Act and requires the Centers for Medicare and Medicaid Services (CMS) to reduce payments to hospitals with excess hospital readmissions. The intention of the HRRP is to reduce hospital readmissions, which occur for approximately 20 percent of Medicare admissions and imposes a cost of approximately $17 billion per year. While there have been reports of a decline in readmissions associated with the HRRP, there is only one formal evaluation of the HRRP program and that was limited to hospitals in New York. We will use administrative data from Medicare on hospital inpatient spending and mortality, and two quasi-experimental research designs (difference-in-differences and regression kink) to assess whether hospitals that were penalized under the HRRP responded to the penalties by changing their processes of care. Specifically, we propose to obtain estimates of the effect of the HRRP penalties on inpatient spending for DRGs that were (e.g., AMI) and were not (e.g., COPD) used to assess readmission penalties. We will also obtain estimates of the effect of the HRRP on discharge status, readmission (penalty in round 2), and mortality for patients in DRGs that were and were not used to assess future penalties. We propose to examine the effects of the first two rounds of the HRRP program.