CMS Reduces Medicare Payments to 769 Hospitals

Added on Jan 19, 2017

CMS Reduces Medicare Payments to 769 Hospitals
Industry Edge January 2017

The Centers for Medicare & Medicaid Services (CMS) has announced that in the first year in which two new infection metrics have been included in its Hospital-Acquired Condition Reduction Program (HACRP), 769 hospitals have been penalized for poor performance.

This is the third year of HACRP, which was mandated by the federal health law to reduce patient injuries, and the first year in which CMS is considering in its calculations rates of infection from two types of antibiotic-resistant bacteria: methicillinresistant Staphylococcus aureus (MRSA) and Clostridium difficile (C. diff ).

Under HACRP, Medicare penalizes the 25% of hospitals that perform worst. According to CMS, this year it is reducing Medicare payments to 769 hospitals due to high rates of potentially avoidable infections and complications such as blood clots, bed sores, central line infections and falls. The hospitals affected by the penalty—about 40% of which had avoided payment cuts in the first two years of the program—will lose 1% of each Medicare payment during the 12 months that began in October 2016.

The penalty program has been criticized as being unfair and unhelpful because it relies on hospital skill and transparency in reporting and is not weighted for caseload severity or hospital size. For example, the findings of a study conducted by the Journal of the American Medical Association suggest that large hospitals are more likely to be identified as poor performers for measures that have a very low probability of complications. Additionally, prior studies have found there is a surveillance bias for more vigilant hospitals looking for complications.

To reduce the bias, industry experts have recommended that CMS include certain hospital characteristics, such as size, in the risk-adjustment models, and evaluate hospital performance using a broader “all-harm” measure.

More information on HACRP is available here.