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Medicare to Fine Hospitals

Published on Jul 24, 2014 at 8:14 pm in Law and Information.

Coming this fall Medicare will, for the first time as part of the Affordable Care Act , reduce payments to hospitals that post excessive rates of infections. Payments will also be lowered for excessive incidence of other preventable injuries to patients such as blood clots, bedsores and falls.

The Centers for Medicare & Medicaid (CMS) describe the program as follows:

Section 3008 of the Affordable Care Act requires CMS to establish a program for IPPS hospitals to improve patient safety by imposing financial penalties on hospitals that perform poorly with regard to hospital-acquired conditions. HACs are conditions that patients did not have when they were admitted to the hospital, but which developed during the hospital stay.

The Medicare reduction plan, called the Hospital-Acquired Condition Reduction Program, has announced an intention to withhold $330 million in payments over a year. The plan will cut payments to the 25% of hospitals with the worst infection and injury rates. The payments will be reduced to each identified hospital by 1% for a year, to start in October 2014.

Rating System

Hospitals will be ranked on two domains. Domain 1 includes the following indicators:

  • Pressure ulcer rate
  • Central venous catheter-related blood stream infection rate
  • Postoperative hip fracture rate
  • Postoperative pulmonary embolism or deep vein thrombosis rate
  • Postoperative sepsis rate
  • Wound dehiscence rate
  • Accidental puncture and laceration rate

Domain 2 consists of two healthcare-associated infection measures developed by the Centers for Disease Control and Prevention’s National Health Safety Network:

  • Central Line-Associated Blood Stream Infection
  • Catheter-Associated Urinary Tract Infection

The scores for Domain 1 are weighted at 35% and the scores for Domain 2 are weighted at 65%. Those two scores are combined for an overall score from 1 to 10. All scored hospitals will be ranked, and the lowest scoring 25% will be face penalties – being paid only 99% of what otherwise would have been paid for Medicare-covered services.

According to preliminary data released in April, hospitals with a score of seven or higher will likely be in the lowest 25%, which could mean penalties for 761 hospitals. Kaiser Health News reports that the final scores may differ from the preliminary ones because Medicare will be adding up infections over a two-year period, instead of just one.

The CMS rating system does account for hospitals that serve a large portion of sicker patients. It adjusts for higher risk factors such as patient age, gender, and comorbidities, so that those factors won’t distort the overall safety profile of a facility.