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Hospitals with greater reductions in readmissions rates are no more likely to increase their observation-service use than other hospitals, according to a  reported today in the New England Journal of Medicine. The study examines readmission and observation-service rates before, during and after implementation of the Affordable Care Act and its Hospital Readmissions Reduction Program. “Within hospitals, there was no significant association between changes in observation-service use and changes in readmission rates after implementation of the ACA,” the authors write. The study also found that readmission rates were falling before ACA implementation, declined more quickly after implementation and then at a slower rate after HRRP penalties were initiated. “This study from Department of Health and Human Services researchers shows America’s hospitals have reduced avoidable readmissions and continue to improve,” said AHA President and CEO Rick Pollack. “It also disproves the notion that the reduction in readmissions has led to an increase in observation stays, instead attributing that increase to the overzealous Recovery Audit Contractors who second-guess physician judgment.”