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751 Orgs Get Medicare Penalties for Hospital Acquired Conditions

Higher rates of hospital acquired conditions have led to Medicare reimbursement penalties for 751 organizations this year.

Hospital acquired conditions and patient safety

Source: Thinkstock

By Jennifer Bresnick

- Medicare has penalized 751 of the nation’s hospitals and health systems for high rates of hospital acquired conditions (HACs) such as preventable falls, infections, and pressure ulcers.

Organizations included on the list will see a 1 percent reduction in their Medicare reimbursement rates. 

The payment reductions continue a quality improvement program that has been somewhat controversial due to the fact that a certain number of hospitals at the bottom of the list will be penalized every year regardless of whether or not scores rise for everyone.

Hospitals have significantly reduced their overall HAC rates since 2010, said the Agency for Healthcare Research and Quality (AHRQ) in 2015. 

Since the beginning of the decade, hospitals have seen a 17 percent decline in adverse drug events, surgical site and catheter infections, ventilator-associated pneumonia, and falls.  This equates to approximately 2.1 million fewer patient safety events between 2010 and 2015.

But the design of the Hospital-Acquired Condition Reduction Program (HACRP) means that the bottom quartile of hospitals will always receive a reimbursement cut, even if their performance is similar to those just above the cut or if the hospitals in question have improved year over year.

The program may also fail to take into account the fact that hospitals with better HAC identification and reporting structures, as well as those who tend to treat sicker and more complex patients, will show more illnesses and injuries than other organizations.

The American Hospital Association (AHA) has argued that the program relies on flawed methodologies and questionable data that do not take patient population variances into account. 

“The HACRP is poorly designed and imposes arbitrary, excessive penalties that disproportionately impact hospitals tending to care for the sickest patients,” the AHA said in a 2016 statement to the House Ways and Means Committee.

“Data show that hospitals treating complex patients are disproportionally penalized, in part because the HACRP uses claims-based patient safety indicators (PSIs) that are unreliable and do not reflect important details of a patient’s risk factors and course of care.”

Small hospitals may simply lack sufficient patient volume to provide accurate data for certain categories included in the program, which could skew their reporting.

“Finally, the HAC measures overlap with the measures in the VBP Program, yet each program uses different performance periods,” the AHA pointed out. “This can lead to excessive payment penalties and confusion about the true state of hospital performance.”

In December of 2016, the AHA and KNG Health Consulting published a study that reinforced the notion that large hospitals, including academic medical centers that treat extremely complex patients, are disproportionately affected by the program.

Simulated quality results showed that large hospitals with very low expected complication rates scored in the lowest quartile nearly half the time due simply to the volume of patients moving through the facility.  As a hospital’s bed size increased, so did its likelihood that it would rank in the bottom quartile of HAC performance.

Separate research from Houston Methodist Hospital, published in the same year, adds that large hospitals are likely to see more sepsis-related deaths, due largely to the fact that patients in need of highly specialized care, such as organ transplants, are also more likely to succumb to sepsis.

This year’s penalty calculations were complicated by the fact that CMS identified a programming error that altered the score required to escape the bottom 25 percent of performers.  The error was corrected and the data recalculated, but only after hospitals received their initial performance reports.

The AHA has repeatedly urged rule makers to reevaluate the criteria for the program and ensure that the initiative is fair, accurate, and able to foster meaningful quality improvements. 

“America’s hospitals are deeply committed to reducing preventable patient harm,” the organization said to the Ways and Means Committee. “The AHA will work with CMS, Congress and others to improve existing policy and promote alternatives to the HAC program that more effectively promote patient safety.”


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