Hospitals are improving their readmission rates, and it's likely not because hospitals are abusing the label of patient observation to avoid financial penalties under the Affordable Care Act, according to a new report from HHS.
Late last year, an analysis of Medicare claims by The Wall Street Journal suggested hospitals were manipulating readmissions data by classifying patients as under observation to disguise patient readmission rates.
HHS' study, published Wednesday in the New England Journal of Medicine, found no significant correlation between changes in observation status use and changes in readmission rates following implementation of the ACA.
Rather, HHS found total returns to the hospital within 30 days — including both readmissions and observation stays — have experienced a downward trend since the passage of the ACA.
Nationally, readmission rates declined from 21.5 percent in 2007 to 17.8 percent in 2015. HHS researchers found rates fell more sharply for conditions specifically targeted by the Hospital Readmissions Reduction Program under the ACA, such as heart attack, heart failure and pneumonia.
While HHS researchers saw a slight increase in observation stays from 2007 to 2015, they deemed the trend too minor to account for the drop in readmission rates after the ACA.
Moreover, observation stays began trending upward in 2008, before the ACA was implemented in May 2010.
Researchers suggest an increase in observation stays may have less to do with the HRRP, and instead may reflect general provider confusion over whether inpatient stays would be found inappropriate by Medicare auditors.