Background: The Centers for Medicare and Medicaid Services (CMS) use public reporting and payment penalties as incentives for hospitals to reduce readmission rates. In contrast to the current condition-specific readmission measures, CMS recently developed an all-condition, 30-day all-cause hospital-wide readmission measure (HWR) to provide a more comprehensive view of hospital performance.

Objectives: We examined whether assessment of hospital performance and payment penalties depends on the readmission measure used.

Research design: We used inpatient data to examine readmissions for patients discharged from VA acute-care hospitals from Fiscal Years 2007-2010. We calculated risk-standardized 30-day readmission rates for 3 condition-specific measures (heart failure, acute myocardial infarction, and pneumonia) and the HWR measure, and examined agreement between the HWR measure and each of the condition-specific measures on hospital performance. We also assessed the effect of using different readmission measures on hospitals' payment penalties.

Results: We found poor agreement between the condition-specific measures and the HWR measure on those hospitals identified as low or high performers (eg, among those hospitals classified as poor performers by the heart failure readmission measure, only 28.6% were similarly classified by the HWR measure). We also found differences in whether a hospital would experience payment penalties. The HWR measure penalized only 60% of those hospitals that would have received penalties based on at least 1 of the condition-specific measures.

Conclusions: The condition-specific measures and the HWR measure provide a different picture of hospital performance. Future research is needed to determine which measure aligns best with CMS's overall goals to reduce hospital readmissions and improve quality.