When the Affordable Care Act came into effect in 2010, it introduced the Pay-for-Performance (P4P) Program, which consists of three main categories—the Hospital Readmission Reduction Program, Hospital Value-Based Purchasing Program, and the Hospital-Acquired Condition (HAC) Reduction Program—to evaluate hospitals and incentivize them to provide more affordable, more efficient, and safer patient care.
In this post, we focus on the HAC Reduction Program, which incentivizes hospitals to lower rates of hospital-acquired conditions, such as catheter-related bloodstream infections (CRBSIs) and other infections and conditions. CRBSIs affect tens of thousands of patients every year, cost between $30,919 – $65,245 each to treat,1 have a mortality rate of 12 – 25%,2 and increase the length of a patient’s hospital stay by an average of 8 days.3 To address this problem, the Affordable Care Act created the HAC Reduction Program, which requires the Centers for Medicare & Medicaid Services (CMS) to lower inpatient reimbursement by 1% for hospitals with HAC scores that place them among the lowest-performing 25% of hospitals with regard to HACs.
Given the complexities of the HAC Reduction Program, it can be difficult to understand how HAC scores are compiled and what a 1% reduction in CMS reimbursement might mean for a given hospital. The following guide provides an overview of how the program works.
How is a hospital’s HAC score calculated?
CMS determines a hospital’s overall HAC score by collecting data from a given hospital on patient safety indicators (PSI) and on rates of HACs, including CRBSIs and other conditions.4
CMS organizes this data into two groups, which it refers to as “Domains.” Domain 1 consists of the PSI data, and Domain 2 consists of the CRBSI and other infection data. Together, this data is used to determine a hospital’s overall HAC score, with more “weight” given to Domain 2 data (85%) than to Domain 1 data (15%).
How does a 1% reduction in Medicare reimbursement affect the average hospital?
Imagine, for example, that a typical mid-sized hospital has annual revenue of approximately $325,000,000.5 The HAC Reduction Program concerns revenue derived only from inpatient care, which comes to approximately $162,500,000 (roughly half of total hospital revenue). Of inpatient revenue, around $65,000,000 (40%) comes from Medicare reimbursement. If the hospital’s HAC score places it in the lowest-performing 25%, triggering a 1% reduction in Medicare reimbursement, then that’s a loss of $650,000 for the year. Practically speaking, that means the hospital has $650,000 less, at minimum,6 to spend on upgrading equipment, expanding services, and hiring and keeping the best-qualified staff.
Why HAC scores matter.
Beyond the financial penalty, performing poorly in comparison to other hospitals with regard to HACs hurts a hospital’s reputation and, most importantly, hurts patients.
Cook Spectrum® Technology
When sterile processes alone are not enough to prevent CRBSIs, Cook Spectrum catheters, which are impregnated with the antibiotics minocycline and rifampin, can help. We invite you to learn how Cook Spectrum products, which meet the CDC 1A recommendation for the prevention of intravascular catheter-related infections, can help protect your patients against the CRBSIs impacting your HAC score.7
Learn more about Cook Spectrum technology: spectrum.cookmedical.com
Learn more about how bloodstream infections hurt.
1. Zimlichman, E, Henderson D, Tamir O, et al. Health care-associated infections: a meta-analysis of costs and financial impact on the US health care system. JAMA Intern Med. 2013;173(22):2039-2046.
2. Srinivasan A, Wise M, Bell M, et al. Vital Signs: Central line-associated bloodstream infections—United States, 2001, 2008, and 2009. MMWR Morb Mortal Wkly Rep. 2011;60(8):243-248.
3. Warren DK, Quadir WW, Hollenbeak CS, et al. Attributable cost of catheter-associated bloodstream infections among intensive care patients in a nonteaching hospital. Crit Care Med. 2006;34(8):2084-2089.
4. Other conditions include catheter-associated urinary tract infections (CAUTIs), surgical site infections (SSIs), methicillin-resistant Staphylococcus aureus (MRSA) infections, and clostridium difficile infection (CDI).
5. This number, provided by The Advisory Board Company (ABC), represents annual revenue for an average U.S. mid-sized hospital. ABC is an independent healthcare research organization and does not endorse or sponsor any medical claims made herein.
6. Hospitals may also be penalized financially under the Hospital Readmission Reduction Program and the Hospital Value-Based Purchasing Program, resulting in further revenue loss.
7. O’Grady NP, Alexander M, Burns LA, et al. Guidelines for the prevention of intravascular catheter-related infections, 2011. Centers for Disease Control and Prevention website. www.cdc.gov/infectioncontrol/pdf/guidelines/bsi-guidelines.pdf. Updated February 15, 2017. Accessed July 6, 2017. The 1A recommendation from the Centers for Disease Control and Prevention (CDC) is to “Use a chlorhexidine/silver sulfadiazine or minocycline/rifampin -impregnated CVC in patients whose catheter is expected to remain in place >5 days if, after successful implementation of a comprehensive strategy to reduce rates of CLABSI, the CLABSI rate is not decreasing.”