Readmission Reduction Incentive Program (RRIP)

The Maryland Readmissions Reduction Incentive Program (RRIP) incentivizes hospitals to reduce avoidable readmissions. Readmissions occur when a patient is discharged from a hospital and is admitted to any hospital within 30 days of the discharge. Preventable hospital readmissions may result from complications from previous hospitalization and/or inadequate care coordination, and generate substandard care quality for patients and unnecessary costs. Under the Total Cost of Care Model, Maryland’s aggregate Medicare 30-day unadjusted all-cause, all-site readmission rate at regulated hospitals must stay at or below the National Readmission Rate for Medicare Fee-for-Service (FFS) beneficiaries.

The RRIP puts 2 percent of inpatient hospital revenue at risk (maximum penalty/reward) based on the better of performance in (1) improving readmissions rates, and (2) attaining relatively low readmission rates.

To calculate improvement, the RRIP compares all-payer readmission rates for all types of inpatient visits adjusted for the severity of illness (casemix) with the rates in a base year. To calculate attainment, the RRIP compares the all-payer readmission rates adjusted for the severity of illness and out-of-state ratios. This methodology strengthens incentives for low-performing hospitals to improve and avoids penalizing high-performing hospitals.

Most hospitals in the nation are part of the federal Medicare Hospital Readmissions Reduction Program (HRRP). Unlike HRRP, the RRIP has an all-payer focus and allows hospitals to keep the savings from such reductions. The Commission also passes some savings to payers via the Potentially Avoidable Utilization (PAU) Savings Program.

RRIP Disparity Component:

The Readmissions Reduction Incentive Program includes a within-hospital disparities readmissions measure, making it the only statewide program in the nation with an incentive for reducing disparities in all-payer readmission rates. Under the RRIP Disparity Component, Maryland hospitals are able to earn a reward of up to 0.5% of inpatient revenue reductions in year-over-year overall readmission rate disparities related to socioeconomic status, with the goal of a 50% reduction in disparities over 8 years. This initiative gauges patient-level socioeconomic status using the Patient Adversity Index (PAI).

Program details are contained in the RRIP policies for RY2022 and later years. A memo describing steps required to append PAI values to hospital EHR and claims data systems is provided here. A related data file containing PAI values for all unique combinations of race, Medicaid status and Area Deprivation Index is provided here.

Key program components of RRIP methodology:

30-Day Readmissions:

Measure readmissions across hospitals in Maryland using the CRISP (Chesapeake Regional Information System for our Patients) unique patient identification numbers
Adjust all-payer readmission rates for patient case-mix and severity of illness
Exclude planned admissions from the program using CMS logic with Maryland-specific adjustments (i.e., all deliveries are considered planned)

Key program components of RRIP scoring:

Measure hospital performance as the better of attainment) or improvement to determine payment adjustments.
Adjust attainment scores to account for readmissions occurring at non-Maryland hospitals.
Scale rewards and penalties for attainment based on relative performance to statewide attainment benchmark and for improvement based on relative performance to statewide minimum improvement target.