HAC Reduction Program Penalizes Safety-Net Hospitals At Higher Rates

Despite recent methodology changes, teaching and safety-net hospitals continue to be more frequently penalized in the Hospital-Acquired Condition Reduction Program (HACRP), a study published in JAMA Network Open found.

All acute care hospitals participating in the CMS inpatient prospective payment systems, except those in Maryland, must participate in the HACRP. Hospitals receive a performance score reflecting the average of their patient safety indicator (PSI) composite score and five healthcare-associated infection (HAI) scores.

Hospitals with performance scores in the worst quartile are subject to a 1 percent reduction in overall Medicare fee-for-service discharge payments. Prior to 2018, studies found that the program seemed to over-penalize large teaching and safety-net hospitals and hospitals offering more complex services compared to small private hospitals.

CMS implemented changes to the HACRP methodology in an effort to address these issues, including using winsorized scores to report individual and total performance scores, adopting a recalibrated version of the PSI composite score, and substituting a weighted scoring system for an equal average of all available scores reported by a hospital.

Researchers used fiscal year 2020 and 2021 HACRP data to evaluate whether these methodology changes minimized penalties for teaching and safety-net hospitals.

There were 3,117 hospitals participating in HACRP during FY 2020; 779 (25 percent) were safety-net hospitals and 1,090 (35 percent) were teaching facilities. The teaching hospitals included those with very minor teaching intensity levels (28 percent), minor teaching intensity levels (42.8 percent), major teaching intensity levels (21.3 percent), and very major teaching intensity levels (7.9 percent).

Almost a quarter of the hospitals (771) were penalized by the HACRP in FY 2020. Penalized hospitals were likelier to be safety-net hospitals, be larger, have more admissions, offer transplant services, and be level I trauma centers. Additionally, these hospitals were more likely to be accredited by the Commission on Cancer, have a higher nurse-to-bed ratio, be in the New England region, and be a non-federal government facility.

Hospitals with higher teaching intensity were more likely to be penalized than non-teaching hospitals, the study found. For example, 55.8 percent of very major and 36.6 percent of major teaching hospitals were penalized compared to 21.7 percent of non-teaching hospitals.

Around 3,100 hospitals had HACRP performance scores available. FY 2020 scores ranged from -1.744 to 2.357, with higher scores representing worse hospital performance. The median score was 0.634 for penalized hospitals and -0.202 for non-penalized hospitals.

Major teaching intensity, safety-net status, and large and medium hospital bed size were associated with higher HACRP scores. In the worst-performing quantile, very major teaching intensity, safety-net status, and non-federal government hospitals were associated with higher scores. In the best-performing quantile, a larger number of admissions and non-federal government hospitals were associated with worse scores.

There were 3,074 hospitals whose penalty status was available for FY 2020 and 2021, including 761 of the 771 hospitals penalized in FY 2020. Around 35 percent of those penalized hospitals (268) reverted their penalization status in FY 2021.

Compared to hospitals that remained penalized, hospitals that reverted their penalization were less likely to be safety-net facilities, be larger, have more admissions, and be non-federal government hospitals. Hospitals with higher teaching intensity were also less likely to revert their penalization status.

The results indicate that the methodology changes in the HACRP did not address the over-penalization of teaching and safety-net hospitals.

“Rather than leading to future improvement, penalization of safety-net and teaching hospitals seems destined to perpetuate disparities,” researchers wrote. “Financial penalties levied by the HACRP may cause further financial constraints on teaching and safety-net institutions, impairing the quality of care they offer to vulnerable underserved populations.”