Luck of the Draw: Role of Chance in the Assignment of Medicare Readmission Penalties
*Names in bold indicate Presenter
We evaluated the role of chance in hospital penalty status for FY 2015. To measure the role of chance in assigning hospital penalties, we calculated simulated penalty status using 1,000 bootstrap samples for each hospital that was exposed to HRRP. The bootstrap sample varies patients admitted to a hospital by sampling from the same underlying patient population. Therefore, it captures how variation in patient admitted due to chance also influences excess readmissions or penalties. We find that penalty status under the original sample of patients did not match penalty status under the bootstrap sample for a significant number of simulations. In particular, for hospital that were penalized with the original sample of patients there was a 23.3% chance that they were not penalized in bootstrap simulations. Similarly, for hospitals that were not penalized with the original sample of patients there was a 23.4% chance that they would be penalized under bootstrap simulation. The average difference in penalty was 0.52 percent of Medicare payment. We are currently refining the simulation methods to account for the role of chance in not only determining which patients are admitted to a hospital but also accounting for the role of chance in determining readmission conditional on a given set of hospital admissions.