CMS Penalizes More Than 700 Hospitals for High Rates of Hospital-Acquired Conditions

In FY 2015, CMS began reducing Medicare payments for hospitals that rank in the worst-performing quartile for hospital-acquired conditions (HACs). For FY 2016, the second year it exercised this authority under the Affordable Care Act (ACA), CMS identified 758 hospitals that will see their Medicare payments reduced by one percent for ranking in the bottom quartile nationally. The FY 2016 penalties are estimated at $364 million. Overall, CMS reported that about half of hospitals that ranked poorly in the second year also ranked poorly in the first. A total of 407 hospitals were penalized in both years of the program. The CMS website contains a list of penalized hospitals.

Hospital-Acquired Conditions (HAC) Reduction Program Penalties

CMS determines penalties by calculating a Total HAC Score based on the hospital’s performance on 4 quality measures: (1) the Agency for Healthcare Research Quality (AHRQ) Patient Safety Indicator (PSI) 90 Composite; (2) the Centers for Disease Control and Prevention (CDC) National Healthcare Safety Network (NHSN) Central-line Associated Bloodstream Infection (CLABSI); (3) Catheter Associated Urinary Tract Infection (CAUTI); and (4) Surgical Site Infection (SSI) (colon and hysterectomy) measures. The hospitals in the worst HAC score quartile may be subject to medicare payment reduction. In the FY 2016 HAC Reduction Program, hospitals with a Total HAC Score greater than 6.75 will be subject to a reduction. The universe of hospitals included in the CMS calculus and at risk for penalties does not include Department of Veterans Affairs hospitals, children’s hospitals, and critical access hospitals. The hospitals to be penalized for poor results in 2016 include several nationally-known facilities.

More on the Hospital-Acquired Conditions (HAC) Reduction Program

HAC has been a serious problem for many years. The ACA’s HAC payment reduction mandate aims to promote patient safety and create an incentive for hospitals to improve conditions. It also intends to reduce HAC, particularly as a result of patient infections caused by insertions into veins, urinary catheters, and incisions from colon surgeries and hysterectomies. Such infection rates comprise 75 percent of CMS’ evaluation. The remainder involves eight other complications, including surgical tears, collapsed lungs, broken hips, and reopened wounds. Infections from colon operations and hysterectomies were also added to this year’s calculations.

However, this ACA provision has not been without detractors. Some believe the penalties are not severe enough to properly incentivize hospitals to improve performance in this area. On the other hand, many in the hospital-sector believe that obtaining money from hospitals attempting to take the necessary and costly steps to improve efforts to reduce HACs is illogical.