Reassessing Post-Hospital Conditions of Section 3025 Hospital Readmissions Reduction Program in the Affordable Care Act

The Patient Protection and Affordability Care Act (PPACA) brought many changes to the delivery of the U.S. Health Care System since its inauguration on March 23rd, 2010 (Medicare & Services, 2013a). A change within the Affordable Care Act (ACA) is Title III, part III, Section 3025 policy, adopted in 2012. This policy implemented the Hospital Readmissions Reduction Program (HRRP) requiring the Centers for Medicare and Medicaid Services (CMS) to reduce payments to hospitals with higher than expected 30-day readmission rate for acute myocardial infarction, heart failure, and pneumonia. Hospitals with higher-than-predicted readmission rates have their total Medicare reimbursement for fiscal year reduced by up to three percent based on these calculations. This paper reviews the policy in detail and proposes changes that need to be made to the policy to avoid penalizing hospitals unnecessarily.