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  • Hospital-Acquired Conditions Payment Policies

    Preventable hospital-acquired conditions (HAC) persist as a major quality and cost of care problem more than a decade after the seminal Institute of Medicine Report, "To Err is Human" found that nearly 98,000 patients die each from medical errors. The Institute for Healthcare Improvement has been a recognized leader in efforts to reduce these errors through the 100,000 Lives or 5 Million Lives Campaigns. As well, the Partnership for Patients established a goal of reducing preventable hospital-acquired conditions by 40 percent.

    HAC-Present On Admission Payment Policy

    Medicare no longer pays hospitals for treating certain secondary diagnoses if they are not present on admission (POA). The following parameters are used by Medicare to identify HACs, including some infections, for non-payment:

    • Are high cost or high volume or both
    • Result in the assignment of a case to a Diagnosis-Related Group (DRG) that has a higher payment when present as a secondary diagnosis
    • Could reasonably have been prevented through the application of evidence-based guidelines.

    Please click here for an overview of the HAC rule as well as the Agency's plans to add to the list in the future.

    Hospital-Acquired Conditions Fact Sheet

    Present on Admission Indicator Reporting Fact Sheet

    HAC Payment Policies

    A provision was included in the Affordable Care Act (ACA) that requires Medicare to reduce payments by 1 percent to hospitals in the top 25th percentile for certain high-cost and common HACs quality performance metrics. The HAC payment adjustment is calculated and made after payment adjustments are made for the Hospital Value-Based Purchasing (VBP) Program and the Hospital Readmissions Reduction Program.

    The ACA also requires that Medicare submit a report to Congress on the appropriateness of establishing a HAC policy for other healthcare providers. The following healthcare provider will be included the report: nursing homes, inpatient rehabilitation facilities, long-term care hospitals, outpatient hospital departments, ambulatory surgical centers, and health clinics.

    For 2015, payment adjustments will be determined by hospital performance on the following quality measures: 

    1) AHRQ PSI-90 composite measure - includes eight component indicators

    2) CDC NHSN Catheter-Associated Urinary Tract Infection (CAUTI)

    3) CDC NHSN Central Line-Associated Blood Stream Infection (CLABSI)

    The addition of CDC NHSN Surgical Site Infection (SSI) measure, CDC NHSN Methicillin-Resistant Staphylococcus aureus (MRSA) measure, and CDC NHSN C. difficile measure will be implemented in 2016, 2017, and 2017, respectively.


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