By Peter Sullivan - 02/25/16 10:18 AM EST
People are having to return to the hospital less for costly readmissions because of an Affordable Care Act program, according to a new study by the Department of Health and Human Services.
The program, called the Hospital Readmission Reduction Program, seeks to prevent patients from having to return for another hospital stay after they are discharged, which HHS says is a sign of poor quality of care and costs Medicare more than $17 billion per year.
To try to address this problem, the program gives hospitals a financial incentive to reduce readmissions by penalizing hospitals with higher than expected readmission rates.
The study finds a sharp decline in readmissions beginning with the passage of the Affordable Care Act, declining from a 21 percent readmission rate to a 18 percent readmission rate, before flattening again at that new level.
The study also found that there is no evidence that hospitals are gaming the system by classifying patients under short-term “observation stays” so as to avoid the penalties.
“The Hospital Readmissions Reduction Program is just one part of the Administration’s broader strategy to promote better care, smarter spending and healthier people by paying providers for what works, unlocking health care data, and finding new ways to coordinate and integrate care to improve quality,” Rachael Zuckerman, an HHS economist, wrote in a blog post.