Medicare’s Hospital Readmissions Reduction Program raises concerns about the effect of payment penalties on safety-net hospitals, which treat a disproportionate share of patients with low socioeconomic status. We examined how the program’s current risk-adjustment methods and patient and hospital factors explained differences in readmission rates between safety-net and other hospitals. Patient socioeconomic status explains some of the differences, but unmeasured factors, such as hospital performance, may also play a role. We must evaluate policies that incorporate socioeconomic status to determine whether it would affect penalties while remaining consistent with objectives for delivery system transformation.
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