Medicare to penalize hospitals with highest rate of HACs

More than 700 hospitals are set to lose 1 percent of their Medicare payments in fiscal year 2015 due to failure to reduce hospital-acquired condition (HAC) rates and meet patient safety benchmarks put in place by the Affordable Care Act (ACA), according to a statement from the Centers for Medicare & Medicaid Services (CMS).

The Hospital-Acquired Condition Reduction Program is an expansion upon a program first established under the Deficit Reduction Act of 2005, the statement notes, and has since saved the Medicare program more than $30 million a year--primarily due to decreased readmission rates. The current version of the program uses public reporting and financial incentives to encourage hospitals to reduce their HAC rates, building upon the healthcare overhaul's goals of improving care quality and lowering costs, according to CMS.

Medicare-accepting hospitals were ranked on a scale of 1 to 10--with 10 indicating the worst HAC rates--and those hospitals in the highest percentile were targeted for the financial penalty. The ranking system uses the ACA-authorized Hospital Value-Based Purchasing program, which measures hospitals' performance based on: clinical process of care, patient experience of care, outcome and efficiency.

Those hospitals set to be penalized include one out of every seven hospitals in the nation, as well as roughly half of the country's academic medical centers, according to Kaiser Health News. In total, the penalties are estimated to cost hospitals $373 million.

The penalties come on the heels of a report that infused some optimism into the healthcare industry's efforts to reduce adverse events. The Department of Health and Human Services announced earlier in the month that the number of reported HACs declined 17 percent between 2011 and 2013, resulting in 1.3 million fewer cases, 50,000 fewer patient deaths and cost savings of $12 billion, FierceHealthcare reported.

Nevertheless, few believe that HAC rates are at an acceptable level, with one nonprofit seeking to eliminate preventable healthcare deaths by the year 2020 and a patient safety advocate recently calling for an autonomous National Patient Safety Board to increase accountability in the industry.

To learn more:
- check out the CMS statement
- read the Kaiser Health News article

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