Medicare's hospital readmissions reduction program and the rise in observation stays

Abstract

AbstractObjectiveTo evaluate whether Medicare's Hospital Readmissions Reduction Program (HRRP) is associated with increased observation stay use.Data Sources and Study SettingA nationally representative sample of fee‐for‐service Medicare claims, January 2009–September 2016.Study DesignUsing a difference‐in‐difference (DID) design, we modeled changes in observation stays as a proportion of total hospitalizations, separately comparing the initial (acute myocardial infarction, pneumonia, heart failure) and subsequent (chronic obstructive pulmonary disease) target conditions with a control group of nontarget conditions. Each model used 3 time periods: baseline (15 months before program announcement), an intervening period between announcement and implementation, and a 2‐year post‐implementation period, with specific dates defined by HRRP policies.Data Collection/Extraction MethodsWe derived a 20% random sample of all hospitalizations for beneficiaries continuously enrolled for 12 months before hospitalization (N = 7,162,189).Principal FindingsObservation stays increased similarly for the initial HRRP target and nontarget conditions in the intervening period (0.01% points per month [95% CI −0.01, 0.3]). Post‐implementation, observation stays increased significantly more for target versus nontarget conditions, but the difference is quite small (0.02% points per month [95% CI 0.002, 0.04]). Results for the COPD analysis were statistically insignificant in both policy periods.ConclusionsThe increase in observation stays is likely due to other factors, including audit activity and clinical advances.