Payment reductions for hospital readmission: Impact on Texas hospitals

Bumyang Kim, The University of Texas School of Public Health


Background: As a national policy objective to reduce hospital readmissions, payment penalty programs has been implemented to the U.S. Medicare program and several state Medicaid programs. The policies assumed that the excess hospital readmission ratio of a given hospital reflects the quality of care. However, there has been published research indicating that factors outside of hospital’s control may influence hospital readmission rates, and policies may unfairly penalize hospitals. Objective: Determine if there was a disproportionate impact under the payment reduction policies in Texas due to an association between readmission rates and factors outside of hospital’s control, and examined policy implications. Methods: A retrospective cohort study used the Texas Hospital Inpatient Research Data File (RDF) to select Medicare A and B patients older than 64 and Medicaid patients aged 18 to 64 discharged with a principal diagnosis of heart failure (HF) during the January 1st through December 31st, 2014. The study examined the extent of variations in the unplanned 30-day HF readmission rates and the 30-day HF risk-standardized readmission rates. To develop analytic samples, the study applied an endorsed measure by the National Quality Forum (NQF). Multi-level logistic regression analyses examined the association between factors outside of hospital’s control and readmissions for Medicare and Medicaid. Results: Texas HF readmission rates were in the national range. Medicaid had higher risk-standardized readmission rates than Medicare across the state based upon their potential vulnerability. Comorbidity was the strongest factor associated with the 30-day readmission rate in both Medicare and Medicaid. Medicaid status had the second largest effect on the readmission rate. The lower income status had an impact on the higher readmission. Access to primary care or general care was significantly associated with the HF readmissions. Conclusions: Reducing readmission rates was not simply related to the hospital’s performance, and included multiple factors that should be considered. More attention to Medicaid patients will be essential to improve readmission rates. Policy makers should consider a multidisciplinary strategy to help hospitals serving higher composition of patients with lower socioeconomic status or lower access to care to achieve higher performance.

Subject Area

Health sciences|Public health|Health care management

Recommended Citation

Kim, Bumyang, "Payment reductions for hospital readmission: Impact on Texas hospitals" (2016). Texas Medical Center Dissertations (via ProQuest). AAI10250199.