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What to know about the new penalties for hospital-acquired conditions

October 1, 2014

    Juliette Mullin, Senior Editor

    The ACA's third and final penalty program launches on Oct. 1, 2014. It is expected to penalize about 760 hospitals for hospital-acquired conditions, such as bloodstream infections and issues related to patient safety.  

    A brief overview of the HAC penalty program

    For the Hospital-Acquired Condition (HAC) Reduction Program, CMS has assessed rates of 10 patient injuries at hospitals, including blood stream infections, patient falls, bed sores, urinary tract infections, collapsed lungs, cuts that occur during or after surgery, and blood clots.

    CMS calculates each facility's HAC score on a scale from one to 10, with 10 being the greatest rate of patient harm. Hospitals that scored a seven or higher are likely to be penalized a full 1% of their inpatient revenues starting on Oct. 1, 2014, in the beginning of fiscal year (FY) 2015.

    Are you in the penalty zone for CMS's HAC program?

    What hospitals should know going into FY 2015

    To get an idea of what to expect from the readmission penalty program in FY 2015 and beyond, I spoke with Eric Fontana, practice manager of the Advisory Board's Data and Analytics Group.

    Question: If a hospital is not penalized in the program's first year, does it need to worry about penalties the program's second year?

    Eric: I don't like to use the term "worry," but all hospitals should try to evaluate how they are tracking in future years as a first step to identify gaps in performance.

    Use our tool to ID gaps at your hospital

    Even though the HAC penalty is not going to impact as many hospitals as the readmissions program, for those that receive a HAC penalty it's significant. 

    Let me expand on this. Our analysis of the proposed and proxy data that CMS released indicates no hospital that receives a HAC penalty will "breakeven" on pay for performance. Meaning that after we consider the combined impact of HAC, readmissions, and VBP, there is an estimated net negative reduction in payments expected for any hospital that gets a HAC penalty. 

    Q: What can hospitals do now to avoid penalties in year two of the HAC penalty program?

    For all the P4P programs, there's a "focus on the future" theme. The same philosophy applies here.

    For the patient safety quality measure (PSI-90), you can't do anything to impact FY 2016 payments because that data collection period is over. 

    However for the infection measures, the data collection timeframe is open until the end of this year, so a limited amount of time remains to impact FY 2016 payments.  Our new pay-for-performance webinar has a good breakdown of the likely future timeframes (which haven't been proposed yet).

    How will your hospital fare?


    See where your organization stands in the HAC program using our Hospital-Acquired Conditions Impact Assessment tool, which replicates CMS's scoring methodology and factors in the impact of new measures and modifications to scoring.

    Then, check out our customized assessment portal to access all your organization-specific analyses in one location.


    How to avoid hospital-acquired conditions at your facility

    Our popular "Journey to Zero" study can help you organization prevent HACs. After reading this publication, members will be able to reduce and possibly eliminate the incidence of HAIs by:

    • Assessing and elevating hygiene standards;
    • Adhering to safe and sterile medical techniques;
    • Minimizing pathogen opportunity; and
    • Automating and integrating hospital IT systems.

    Get the study now.

    Why nurses are key to preventing never events


    Across the country, one in ten patients get a hospital-acquired condition during their hospital stay. Katherine Virkstis explains why no one is better equipped to prevent never events than nurses.


    Have a Question?


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