Do the hospital-acquired conditions penalties levied on hospitals by the Medicare program need to be reformed to incorporate population-based risk adjustment, in order to become more fair? That is the conclusion of healthcare policy researchers who have done an analytical study of the federal Hospital-Acquired Condition Reduction Program (HACRP).
Writing in the JAMA Network Online on Dec. 21 in advance of publication in JAMA Internal Medicine, in an article entitled “Association of Stratification by Proportion of Patients Dually Enrolled in Medicare and Medicaid With Financial Penalties in the Hospital-Acquired Condition Reduction Program,” Skurth A. Shashikumar, AB, R.J. Waken, Ph.D., Alina A. Luke, M.P.H, David R. Nerenz, Ph.D., and Karen E. Joynt Maddox, M.D., M.P.H., examine the issue in detail.
The researchers note that “The Hospital-Acquired Condition Reduction Program (HACRP) is a value-based payment program focused on safety events. Prior studies have found that the program disproportionately penalizes safety-net hospitals, which may perform more poorly because of unmeasured severity of illness rather than lower quality. A similar program, the Hospital Readmissions Reduction Program, stratifies hospitals into five peer groups for evaluation based on the proportion of their patients dually enrolled in Medicare and Medicaid, but the effect of stratification on the HACRP is unknown.” The researchers studied 3,102 hospitals evaluated by the HACRP; they found that safety-net hospitals have received $111,333,384 in penalties before stratification compared with an estimated $79,087,744 after stratification, a difference of $32,245,640.
In their analysis, the researchers write that the HACRP, which deducts 1 percent of Medicare payments from the lowest quartile of hospitals in terms of performance with respect to six measures of in-hospital infection and other adverse events (central catheter–associated bloodstream infection; catheter-associated urinary tract infection; surgical site infection; methicillin-resistant Staphylococcus aureus bacteremia; Clostridium difficile infection; and the Patient Safety Indicator 90 (PSI-90), a claims-based composite of in-hospital safety events, such as blood clots and postoperative infections), “has been controversial, in part because hospitals serving a greater proportion of patients from minority, low-socioeconomic, and other disadvantaged backgrounds, as well as those serving more patients with medically complex conditions, are more likely to have worse performance scores than the national benchmark and to receive penalties.”
Meanwhile, they write, “The HACRP currently evaluates individual hospital performance compared with all hospitals’ performance nationally. Evaluating hospitals in the HACRP within peer groups based on the proportion dual may represent a practical solution to addressing potential biases, if any, in the assessment of hospital performance. However, the potential associations of such a change with CMS penalties are unknown. This study thus had 3 aims: to describe the characteristics of the hospitals penalized in the most recent year of the HACRP (fiscal year 2020); to simulate stratification by proportion dual and determine the association this might have with penalty rates for key hospital groups of interest, including safety-net and teaching hospitals; and to calculate the change in financial penalties among these groups after stratification. Patient-level data were used to calculate the proportion of, for example, Black or Hispanic patients at a hospital. Those data contain personal health information although no patient names. This study was approved by the Human Research Protection Office at Washington University. The requirement for informed consent was waived by the Human Research Protection Office.”
Based on their research, the article’s authors write that, “In multivariate analyses, safety-net status and treating patients with highly medically complex conditions were associated with higher odds of moving from penalized to nonpenalized status. This economic evaluation,” they conclude, “suggests that stratification of hospitals would be associated with a narrowing of disparities in penalties and a marked reduction in penalties for safety-net hospitals. Policy makers should consider adopting stratification for the HACRP.”
