- In October, the Hospital-Acquired Condition Reduction Program will take effect, penalizing those hospitals with the worst patient injury and infection rates. In 2012, one out of every eight patients across the country suffered a complication considered avoidable during a hospital stay.
- About 750 hospitals will lose 1% of every Medicare payment for a year, for fines totaling $330 million a year.
- In April, the administration released a preliminary analysis of which hospitals would be assessed, although specific hospitals on the list are not set in stone; CMS will judge performance over a longer time period in the fall than that used to determine the draft penalties.
The program is the latest of three pay-for-performance programs created under the 2010 health law. The first two, the Hospital Readmissions Reduction Program and Hospital Value-Based Purchasing Program, are both in their second year. This fall, when all three are active, hospitals will be liable for losses of up to 5.4% in Medicare payments.
Some hospitals will likely be hit harder than others under the new program. According to a Kaiser Health-commissioned analysis of the draft penalties by Dr. Ashish Jha, a professor at the Harvard School of Public Health, teaching hospitals are the most likely to be impacted: A full 54% were cited for preliminary penalties. Other at-risk providers include publicly-owned hospitals and those with low-income populations, as well as large hospitals and hospitals in urban settings.
The disparity in types of hospitals being penalized has created controversy over the appropriateness of the metrics uses to assess hospitals. Improvement is not taken into consideration, and although the government does look at whether the hospital is associated with a medical school, Jha questions whether those metrics are correctly identifying poor performance.
CMS also looks at size and location of the hospital in question, but not socio-economic data. That trend may be changing, however: On Thursday, a bipartisan group of senators introduced legislation that would adjust readmission rates for patients' socio-economic status when calculating penalties. According to the bill, conditions such as poverty, low levels of literacy, limited English proficiency, minimal social support, poor living conditions and limited community resources likely have a direct impact on readmissions — and that not accounting for these factors unfairly penalizes hospitals whose populations are made up of a high proportion of patients that fit those descriptors.