Ethan Rhodes
Hospital-acquired conditions (HACs) are a significant concern for patients and healthcare providers alike, and they attract additional Medicare payments, which can be costly. In 2008, Medicare introduced the Hospital-Acquired Conditions (HACs) Initiative, a policy that denies incremental payment for specific complications arising from hospital care. The HAC Reduction Program is a Medicare value-based purchasing program that reduces payments to hospitals based on their performance regarding HACs. This program encourages hospitals to prioritize patient safety and implement best practices to reduce healthcare-associated infections. The program calculates hospitals' performance using the Total HAC Score, and those in the worst-performing quartile receive a 1% payment reduction. This initiative aims to incentivize hospitals to improve their practices and reduce preventable patient harm, which benefits both patients and Medicare financially.
| Characteristics | Values |
|---|---|
| Hospitals with a Total HAC Score greater than the 75th percentile of all Total HAC Scores | Receive a 1% payment reduction |
| Hospitals that are exempt from the HAC Reduction Program | Children's hospitals, veteran's hospitals, and "critical access" hospitals (hospitals which are the sole medical providers in one geographic area) |
| Hospitals that are exempt from payment reductions | Maryland hospitals |
| Hospitals that receive payment reductions | Subsection (d) hospitals |
| Hospitals that receive confidential Hospital-Specific Reports (HSRs) | All hospitals |
| Hospitals that receive higher reimbursements | Hospitals that emphasize the number and complexity of procedures |
| Hospitals that receive incremental Medicare payments | Hospitals where patients develop hospital-acquired conditions |
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What You'll Learn
The Hospital Readmissions Reduction Program
The HRRP has been controversial since its inception, with critics arguing that it unfairly penalizes hospitals for issues beyond their control and incentivizes readmission over patient survival. There are also concerns that hospitals may be reducing readmissions by keeping returning patients in observation units rather than formally readmitting them. However, proponents argue that it has successfully reduced national readmission rates and raised awareness and investment in mechanisms to better assist patients during discharge and transitions.
The overall Medicare reimbursement model has also faced scrutiny, with some experts suggesting that it encourages hospitals to emphasize the number and complexity of procedures to garner higher reimbursements. Additionally, medication errors, which are the leading cause of preventable patient injury, are not tracked in the program. Despite these controversies, hospitals must navigate the reimbursement penalties as they measure their performance and design improvement strategies.
To address concerns, the Twenty-first Century Cures Act, which came into effect in fiscal year 2019, aims to remedy the differences in patient and hospital experiences by dividing hospitals into five peer groups. Hospitals are compared to other hospitals with a similar proportion of patients eligible for Medicare and Medicaid, rather than a national average. This adjustment aims to improve the program's effectiveness for vulnerable populations and enhance equality and fairness.
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The Hospital-Acquired Condition (HAC) Reduction Program
Under the HAC Reduction Program, the Centers for Medicare and Medicaid Services (CMS) reduce overall Medicare payments for hospitals that rank in the worst-performing quartile of all hospitals on measures of hospital-acquired conditions. CMS evaluates overall hospital performance by calculating Total HAC Scores as the equally weighted average of scores on measures included in the program. Hospitals with a Total HAC Score greater than the 75th percentile of all Total HAC Scores will receive a 1% payment reduction. This payment adjustment applies to all Medicare fee-for-service discharges for the applicable fiscal program year when CMS pays hospital claims.
The HAC Reduction Program includes measures such as the CMS Patient Safety and Adverse Events Composite (CMS PSI 90) and the Centers for Disease Control and Prevention's National Healthcare Safety Network healthcare-associated infection (HAI) measures. The CMS PSI 90 measure includes data on infections taken from charts, reports, and other sources reported to the National Healthcare Safety Network, such as Central Line-Associated Bloodstream Infection (CLABSI), Catheter-Associated Urinary Tract Infection (CAUTI), and Colon and Abdominal Hysterectomy Surgical Site Infection (SSI).
Hospitals receive confidential Hospital-Specific Reports (HSRs) from CMS annually, containing detailed program information and calculations for review. Hospitals have 30 days to review their data, submit questions about the calculation of their results, and request corrections to their scoring before public reporting.
While the HAC Reduction Program aims to improve patient safety and reduce infections, there have been criticisms and controversies associated with the program. Some believe that the scores do not accurately represent a hospital's performance or improvement, and that medication errors, which are the leading cause of preventable patient injury, are not tracked in the program. Additionally, there have been concerns about the disproportionate impact of penalties on certain hospitals, particularly teaching hospitals and those caring for more disadvantaged patients. Despite these challenges, the HAC Reduction Program is an important initiative to improve patient safety and reduce the financial burden associated with preventable patient harm.
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HAC Reduction Program exemptions
The Hospital-Acquired Condition (HAC) Reduction Program is a Medicare value-based purchasing program that reduces payments to hospitals based on their performance on measures of hospital-acquired conditions. The HAC Reduction Program encourages hospitals to improve patient safety and implement best practices to reduce their rates of infections associated with healthcare. The program applies to all subsection (d) hospitals, which are general acute care hospitals.
Some hospitals and hospital units are exempt from the HAC Reduction Program. These include short-term acute care hospitals located in US territories, including Guam, Puerto Rico, the US Virgin Islands, the Northern Mariana Islands, and American Samoa. Additionally, Maryland hospitals are exempt from payment reductions under the HAC Reduction Program due to an agreement with the Centers for Medicare & Medicaid Services (CMS) and the state of Maryland.
Children's hospitals, veteran's hospitals, and "critical access" hospitals, which are the sole medical providers in one geographic area, are also exempt from the HAC Reduction Program and the Hospital Readmissions Reduction Program.
CMS evaluates overall hospital performance by calculating Total HAC Scores as the equally weighted average of scores on measures included in the program. Hospitals with a Total HAC Score greater than the 75th percentile of all Total HAC Scores will receive a 1% payment reduction. This payment adjustment applies to all Medicare fee-for-service discharges for the applicable fiscal year when CMS pays hospital claims.
CMS sends hospitals confidential Hospital-Specific Reports (HSRs) annually, containing detailed program information and calculations for review. Hospitals have 30 days to review their data, submit questions, and request corrections to their scoring before it is publicly displayed on Data.cms.gov.
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Medicare's Nonpayment for Hospital-Acquired Conditions
In 2008, Medicare implemented the Hospital-Acquired Conditions (HACs) Initiative, a policy that denies incremental payment for complications arising from hospital care, also known as "never events". The HACs Initiative is a Medicare value-based purchasing program that reduces payments to hospitals based on their performance on measures of hospital-acquired conditions. The program encourages hospitals to improve patient safety and implement best practices to reduce their rates of healthcare-associated infections.
The HAC Reduction Program applies to all subsection (d) hospitals, which are general acute care hospitals. However, some hospitals and hospital units are exempt from the program, including children's hospitals, veteran's hospitals, and "critical access" hospitals, which are the sole medical providers in one geographic area. Maryland hospitals are also exempt from payment reductions due to an agreement with the Centers for Medicare & Medicaid Services (CMS) and the state of Maryland.
Under the HAC Reduction Program, CMS reduces overall Medicare payments for hospitals that rank in the worst-performing quartile of all hospitals on measures of hospital-acquired conditions. Hospitals with a Total HAC Score greater than the 75th percentile of all Total HAC Scores will receive a 1% payment reduction. This payment adjustment applies to all Medicare fee-for-service discharges for the applicable fiscal program year when CMS pays hospital claims.
The impact of the HACs Initiative has been modest financially, but it appears to have been effective in reducing specific never events. Penalties may have been most effective where evidence for prevention was clear or more conducive to standardized dissemination and implementation. While the program has been controversial, with some arguing that the scores do not accurately represent a hospital's performance, it has provided incentives for hospitals to improve their practices and reduce preventable patient harm.
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Incremental cost to Medicare
Hospital-acquired conditions (HACs) often result in additional Medicare payments, generated during the initial hospitalization and subsequent healthcare encounters. The Hospital-Acquired Condition (HAC) Reduction Program is a Medicare value-based purchasing program that reduces payments to hospitals based on their performance on measures of HACs. The HAC Reduction Program encourages hospitals to improve patient safety and implement best practices to reduce their rates of infections associated with healthcare. The program calculates the Total HAC Score as the equally weighted average of scores on measures included in the program. Hospitals with a Total HAC Score greater than the 75th percentile of all Total HAC Scores will receive a 1% payment reduction. This payment adjustment applies to all Medicare fee-for-service discharges for the applicable fiscal year when CMS pays hospital claims.
The HAC Reduction Program is a Medicare value-based purchasing program that aims to reduce payments to hospitals with high rates of HACs. The program is designed to encourage hospitals to improve patient safety and implement best practices to reduce infections and other adverse events associated with healthcare. The HAC Reduction Program is based on the idea that hospitals should be incentivized to provide safer and more effective care, and that reducing HACs can help improve patient outcomes and reduce costs for Medicare and patients.
The HAC Reduction Program uses a variety of measures to assess hospital performance, including infection rates, patient safety indicators, and adverse events. These measures are used to calculate a hospital's Total HAC Score, which is then used to determine the payment reduction. The program also includes a process for hospitals to review their data, ask questions, and request corrections to ensure accuracy and fairness.
The impact of the HAC Reduction Program has been mixed. Some studies have shown that the program has been effective in reducing specific never events, such as certain types of infections and medical errors. However, other studies have found no significant effect on the rates of hospital-acquired conditions. There are also concerns about the accuracy of the scoring system and the potential for gaming the system to improve reimbursement.
Overall, the HAC Reduction Program is designed to reduce the incremental cost to Medicare by incentivizing hospitals to improve patient safety and reduce the occurrence of hospital-acquired conditions. While there is some evidence of success, there are also challenges and controversies associated with the program's implementation and impact.
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Frequently asked questions
The HAC Reduction Program is a Medicare value-based purchasing program that reduces payments to hospitals based on their performance on measures of hospital-acquired conditions (HACs).
CMS evaluates overall hospital performance by calculating Total HAC Scores as the equally weighted average of scores on measures included in the program. Hospitals with a Total HAC Score greater than the 75th percentile of all Total HAC Scores will receive a 1% payment reduction.
Hospital-acquired conditions include preventable conditions that are related exclusively to being in a hospital, such as bed sores, medical errors, and infections.
By reducing payments to hospitals with high rates of hospital-acquired conditions, the program incentivizes hospitals to implement best practices to reduce infections and improve patient safety.
Yes, children's hospitals, veteran's hospitals, and "critical access" hospitals are exempt from the program. Additionally, short-term acute care hospitals located in U.S. territories such as Guam, Puerto Rico, and the U.S. Virgin Islands are also exempt.
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