New data from CMS' hospital-acquired condition program have analysts questioning value

The latest results from the CMS' Hospital-Acquired Condition Reduction Program has industry stakeholders and analysts calling for the agency to rethink how it evaluates hospitals under the program.

Medicare will penalize 751 hospitals in fiscal 2018 for their lagging performance on measures designed to prevent hospital-acquired conditions, according to new data from the CMS. The number of hospitals to be hit with a 1% payment reduction in the upcoming fiscal year has been consistent since the program began in 2014, largely by the nature of the program. Roughly 700 hospitals—the hospitals that perform in the bottom 25% on certain quality measures compared to their peers—are penalized every year under the HAC Reduction Program. Medicare evaluated a total of 3,306 hospitals this year. And that has people concerned about the methodology of the program, which isn't motivating hospitals to improve. That's also an issue that has been brought up regarding other CMS pay-for-performance programs like the Hospital Value-based Purchasing Program and the Hospital Readmissions Reduction Program. Francois de Brantes, vice president and director of the Center for Payment Innovation at the Altarum Institute, said it's time for the CMS to re-evaluate these programs to see what works and doesn't. "My fundamental problem is the static nature of these things. ... Overall the formulas are there and those are the ones we stick with and we shouldn't do that," he said. The HAC Reduction Program was mandated under the Affordable Care Act to encourage hospitals to reduce the number of patients who suffer from preventable infections during an inpatient stay. The program ranks performance of hospitals on measures for central-line-associated blood stream infections; catheter-associated urinary tract infections; surgical-site infections; Methicillin-resistant Staphylococcus aureus infections and Clostridium difficile infections. A composite score on 10 quality measures such as pressure ulcers and in-hospital falls are evaluated as well. Under the methodology, hospitals that perform in the bottom 25% on these measures compared with their peers are hit with a penalty. The American Hospital Association has consistently argued that the program's methodology doesn't recognize improvement. "The Congressional mandate that a quarter of hospitals should be penalized every year creates this odd situation in which more than half of the hospitals being penalized have the same or relatively the same performance as many of the hospitals who escaped penalty," said Nancy Foster, vice president for quality and patient safety policy at the AHA. "They ought to recognize improvement." In addition, nearly half of the hospitals Medicare will penalize in 2018—374 hospitals—are repeat offenders and were hit with a penalty in 2017 as well, according to a Modern Healthcare analysis. Health policy experts have also taken issue with the program because it lacks risk adjustment for social risk factors, which can disproportionately affect hospitals that serve poorer and sicker patient populations. The CMS addressed those concerns in the final rule issued earlier this year for the inpatient prospective payment system. The agency said it's concerned about adding risk adjustment for social-risk factors because the HAC Reduction Program generally represents "never events" that are preventable. "We are concerned about holding providers to different standards for the outcomes of their patients with social risk factors because we do not want to mask potential disparities or minimize incentives to improve the outcomes for disadvantaged populations," the CMS stated. To promote fairness in the program for fiscal 2018, the CMS did add the Patient Safety and Adverse Events Composite for the first time. It's intended to better reflect the importance and harm associated with patient safety events, according to the agency. Despite its apprehension to adding social-risk factor risk adjustment to the program, the CMS said it will "continue to seek public comment" on the issue.