Hospital Groups Support Bills That Would Alter Medicare's Readmissions Penalties

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By Michael D. Williamson

March 11 — Three provider trade associations are supporting legislation that would allow the CMS to account for patients' sociodemographic status when considering penalties for hospitals with excessive readmissions.

In separate press releases dated March 10, the American Hospital Association (AHA) and the Association of American Medical Colleges (AAMC) said they support the legislation, the Establishing Beneficiary Equity in the Hospital Readmissions Program Act of 2015 (H.R. 1343/S. 688). Reps. James Renacci (R-Ohio) and Eliot Engel (D-N.Y.) March 10 introduced the bill in the House. Sens. Rob Portman (R-Ohio) and Joe Manchin III (D-W.Va.) March 10 introduced the bill in the Senate.

In addition, America's Essential Hospitals (AEH) said, “This legislation will ensure fairness in the readmissions reduction program and allow high-performing essential hospitals to maintain the resources they need to reduce readmissions and care disparities.” The AEH statement originally appeared in a March 10 press release on Portman's website.

The bill “will improve the fairness” of the Centers for Medicare & Medicaid Services' readmissions program, the AHA said. Currently, the group said, the readmissions program doesn't recognize “sociodemographic factors” outside a hospital's control that affect a patient's health, such as a patient's ability to pay for necessary follow-up treatments and easy access to appropriate food, and their likelihood of being readmitted. “The legislation will greatly improve the fairness of readmission penalties by taking into account both the proportion of the hospital's patients eligible for both Medicare and Medicaid and the patients' sociodemographic status,” the AHA said.

Sens. Roger Wicker (R-Miss.), Mark Kirk (R-Ill.), Bill Nelson (D-Fla.) and Sherrod Brown (D-Ohio) are co-sponsors of the legislation in the Senate, a March 10 statement from Manchin said.

AAMC's Take 

If passed, the bill “will help to ensure that hospitals treating our nation’s most medically complex and vulnerable patients are not unfairly and disproportionately penalized by the Medicare Hospital Readmissions Reduction Program (HRRP),” the AAMC statement said.

The HRRP requires the CMS to penalize hospitals that have excess readmissions compared with expectations, the AAMC said. “However, the causes of readmissions are complex, and strong evidence clearly links low socioeconomic status to higher rates of readmission,” the group added.

The AAMC also said the agency doesn't currently consider socioeconomic status when determining the expected number of readmissions. “This legislation requiring CMS to account for socioeconomic status will measure quality of care more accurately and is an essential improvement to the HRRP,” the group said.

Budget Neutrality 

The legislation is budget-neutral, Portman's statement said.

Specifically, the bill would alter the HRRP as governed by the Affordable Care Act, Manchin's statement said.

Under the legislation, the CMS would have to account for patient socioeconomic status when calculating the risk-adjusted readmissions penalties, Portman said.

Failing to recognize patient socioeconomic status “has led to unfair penalties at many rural hospitals in West Virginia and around the country,” Manchin's statement said.

Likewise, a March 10 statement from Renacci said, “As a former businessman with a long record of experience in the health care industry, it’s clear that the HRRP unfairly penalizes safety-net and teaching hospitals—taking valuable resources from those who are in need of them most.”

To contact the reporter on this story: Michael D. Williamson in Washington at

To contact the editor responsible for this story: Brian Broderick at

The House bill is at

The Senate bill is at


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