In early 2021, the Centers for Medicare and Medicaid Services (CMS) penalized 774 hospitals for having high rates of patient infections and/or other potentially avoidable medical complications. Through the Hospital-Acquired Condition Reduction Program, these hospitals will now lose 1% of their Medicare payments over the course of twelve months.
The penalties are not related to COVID-19, but are instead based on patients who were admitted to the hospitals between mid-2017 and 2019 (all prior to the pandemic).
The Hospital-Acquired Condition Reduction Program was created by the Affordable Care Act and requires that CMS annually reduce funding for the top 25% of general care hospitals with the highest rates of patient safety issues. Specifically, CMS looks at the rates of infections, blood clots, sepsis, bedsores, hip fractures, and other complications that occur in hospitals and can be prevented.
Where hospitals get frustrated is that they can continue to be punished, even if they are improving. Further frustrating the matter is because the top 25% is a strict threshold, the difference in infection/complication rates between hospitals that get hit with the penalty and the ones that just skate by (just under the top 25%) can be negligible. Some hospitals also believe that they are being penalized just because they were more thorough than others in finding and reporting infections and other complications to CMS and the United States Centers for Disease Control (CDC).
While 774 hospitals were penalized, 2,430 were not as they were not in the top quarter and an additional 2,057 hospitals were excluded from the program based on their patient population (hospitals that solely serve children, veterans, or psychiatric patients are not included). Hospitals that are considered “critical access status” are also not included in the program.
The program has been in existence for seven years and over that time, 1,978 hospitals have been penalized at least once. Of those hospitals, 1,360 have been penalized more than once and 77 hospitals have been penalized each year.
“The all-or-none penalty is unlike any other in Medicare’s programs,” said Dr. Karl Bilimoria, vice president for quality at Northwestern Medicine. Northwestern Memorial Hospital in Chicago was penalized this year despite, as Dr. Bilimoria noted, the hospital taking the penalty seriously because of the amount of money at stake, “but, at the same time, we know that we will have some trouble with some of the measures because we do a really good job identifying” complications.
Other well-known hospitals penalized this year include Ronald Reagan UCLA Medical Center and Cedars-Sinai Medical Center in Los Angeles; UCSF Medical Center in San Francisco; Beth Israel Deaconess Medical Center and Tufts Medical Center in Boston; NewYork-Presbyterian Hospital in New York; UPMC Presbyterian Shadyside in Pittsburgh; and Vanderbilt University Medical Center in Nashville, Tennessee.
Cedars-Sinai also spoke out against the program, saying that it disproportionally punishes academic medical centers due to the “high acuity and complexity” of their patients, details that aren’t captured in the Medicare billing data. “These claims data were not designed for this purpose and are typically not specific enough to reflect the nuances of complex clinical care,” the hospital said. “Cedars-Sinai continually tracks and monitors rates of complications and infections, and updates processes to improve the care we deliver to our patients.”