HHS Inspector General: Too Many Nursing Home Residents Still Inappropriately Receive Psychotropic Medications

The Hospital Readmissions Reduction Program (HRRP), enacted as part of the Affordable Care Act, imposes penalties against hospitals that have higher-than-expected rates of readmissions of patients with certain conditions. However, HRRP defined readmissions solely as inpatient hospital readmissions. A new study finds that early studies overstated the reduction in hospital readmissions that resulted from HRRP and that, in fact, observation stays accounted for 40% of the reductions. Approximately 18% of Medicare beneficiaries “now complete their hospital treatment in observation” and patients in observation are “clinically indistinguishable from short inpatient admissions.”

An invited commentary on the study calls for “retirement” of HRRP. It observes that HRRP does not include “emergency department (ED) treat-and-release encounters or observation stays,” both of which increased following implementation of HRRP. The commentary also observes that HRRP “has been incredibly regressive, disproportionately penalizing safety-net hospitals that care for low-income, minoritized, and marginalized populations.” The COVID-19 pandemic only worsened these regressive effects. Finally, the commentary reports front-line clinicians’ concerns that “incentives to avoid readmissions may lead to potential inappropriate management of higher-risk patients with chronic conditions, such as heart failure, in the outpatient rather than inpatient setting.” The commentary concludes that HRRP, at best, had “no meaningful effect” on patients’ return to the hospital and, at worst, the program “has unfairly penalized hospitals caring for the most vulnerable populations in our country and potentially resulted in patient harm.”