Risk Adjustment Has Impact on Medicare Readmissions Program

The use of social risk adjustment has helped reduce differences in the penalties assessed to safety-net hospitals and other hospitals by Medicare’s hospital readmissions reduction program, according to a new study.

According to the study published in the journal Health Affairs,

Seven studies found that adding social risk factors to the program’s base risk-adjustment model (which adjusts only for age, sex, and comorbidities) reduced differences in risk-adjusted readmissions and penalties between safety-net hospitals and other hospitals. Three studies found that peer grouping, the HRRP’s current approach to social risk adjustment, reduced penalties among safety-net hospitals. Two studies found that differences in risk-adjusted readmissions and penalties were further narrowed when augmentation of the base model was combined with peer grouping. Two studies showed that it is possible to adjust for social risk factors without obscuring quality differences between hospitals.

The study’s conclusion?

These findings support the use of social risk adjustment to improve provider payment equity and highlight opportunities to enhance social risk adjustment in value-based payment programs.

Learn more from the Health Affairs study “Social Risk Adjustment In The Hospital Readmissions Reduction Program: A Systematic Review And Implications For Policy” and find a summary of that analysis in the RevCycleIntelligence article “Social Risk Adjustment Reduced HRRP Penalties for Safety-Net Hospitals.”