Medicare Readmissions Policies and Racial and Ethnic Health Disparities: A Cautionary Tale

Abstract

Beginning in 2009, the Centers for Medicare & Medicaid Services started publicly reporting hospital readmission rates as part of the Hospital Compare website. Hospitals will begin having payments reduced if their readmission rates are higher than expected starting in fiscal year 2013. Value-based purchasing initiatives including public reporting and pay-for-performance incentives have the potential to increase quality of care. There is concern, however, that hospitals providing service to minority communities may be disproportionately penalized as a result of these policies due to higher rates of readmissions among racial and ethnic minority groups. Using 2008 Medicare data, we assess the risk for readmission for minorities and discuss implications for minority-serving institutions.