How do Hospital-Acquired conditions affect Medicare payments?
Abstract Research objective: Hospital-acquired conditions, or HACs, often result in additional Medicare payments, generated during the initial hospitalization and in subsequent health care encounters.
What impact does a hospital acquired condition have on a DRG?
What impact does a hospital acquired condition have on a hospital's Medicare reimbursement? If a hospital acquired condition causes a case to be grouped to a higher paying DRG, Medicare will only reimburse for the lower paying DRG.
How do Hospital reimbursement and HAI rates affect complications?
Complications from both bacteria can be severe and include secondary infections, sepsis, and even death. And while these concerns are of paramount importance, there’s another aspect of HAIs that many often overlook. Specifically, the relationship between hospital and provider reimbursement and HAI rates.
What types of hospital payments are first adjusted for adjustments?
We first adjust payments for the Hospital Value-Based Purchasing Program, Hospital Readmissions Reduction Program, disproportionate share hospital payments, and indirect medical education payments based on the base-operating diagnosis-related group amount.
How does HAC affect reimbursement?
Hospitals with a Total HAC Score greater than the 75th percentile of all Total HAC Scores will receive a 1-percent payment reduction. This payment adjustment applies to all Medicare discharges for the applicable fiscal program year when CMS pays hospital claims.
How does Medicare reimbursement affect hospitals?
Under this system, hospitals receive a fixed payment for each patient that is determined by the patient's diagnosis-related group (DRG) at the time of admission; thus, reimbursement is unaffected by the hospital's actual expenditures on the patient.
Are hospital acquired conditions reimbursed by Medicare?
So for instance, if you are on Medicare and you pick up a hospital acquired infection while you are being treated for something that is covered by Medicare, the extra cost of treating the hospital acquired infection will no longer be paid for by Medicare.
Does CMS pay for hospital-acquired infections?
Medicare Non-Payment of Hospital-Acquired Infections: Infection Rates Three Years Post Implementation. Background: Medicare ceased payment for some hospital-acquired infections beginning October 1, 2008, following provisions in the Medicare Modernization Act of 2003 and the Deficit Reduction Act of 2005.
What affects Medicare reimbursement?
Average reimbursements per beneficiary enrolled in the program depend upon the percentage of enrolled persons who exceed the deductible and receive reimbursements, the average allowed charge per service, and the number of services used.
What affects hospital reimbursement?
Payers assess quality based on patient outcomes as well as a provider's ability to contain costs. Providers earn more healthcare reimbursement when they're able to provide high-quality, low-cost care as compared with peers and their own benchmark data.
Are hospitals penalized for hospital-acquired conditions?
Since its implementation in 2014, the HAC program has penalized 1,978 hospitals at least once as of 2021. Just over 1,300 of those hospitals have been penalized at least twice, while 77 hospitals have received Medicare payment cuts every year.
What is hospital-acquired condition reduction program?
The Hospital-Acquired Condition (HAC) Reduction Program is a Medicare value-based purchasing program that reduces payments to hospital based on how they perform on measures of hospital-acquired conditions.
Is reimbursement impacted by HACs Why or why not?
The American Hospital Association (AHA) argues that Medicare's attempt to reduce HACs through value-based penalties may not be the most effective method for motivating hospitals. The HACRP reduces Medicare reimbursement for one-fourth of the participating hospitals regardless of performance improvement.
How are hospitals penalized for hospital acquired infections?
THE CENTERS FOR MEDICARE AND MEDICAID SERVICES (CMS) has announced that it will penalize 800 hospitals for their hospital-acquired condition (HAC) rates by withholding 1% of their total Medicare payments for patients discharged this fiscal year.
What hospitals are subject to reimbursement penalties for hospital acquired conditions HACs?
Hospital-Acquired Condition Reduction ProgramCritical access hospitals.Rehabilitation hospitals and units.Long-term care hospitals.Psychiatric hospitals and units.Children's hospitals.Prospective Payment System-exempt cancer hospitals.Veterans Affairs medical centers and hospitals.More items...•
Does Medicare pay for hospital-acquired pressure ulcers?
Last year, the Centers for Medicare and Medicaid Services announced that it will cease reimbursement for hospital care of eight reasonably preventable conditions – including pressure ulcers, bed sore aka decubitus ulcers – in October 2008.
What is the Hospital-Acquired Condition (HAC) Reduction Program?
The HAC Reduction Program encourages hospitals to improve patients’ safety and reduce the number of conditions people experience from their time in a hospital, such as pressure sores and hip fractures after surgery.
Why is the HAC Reduction Program important?
The HAC Reduction Program encourages hospitals to improve patients’ safety and implement best practices to reduce their rates of infections associated with health care.
Which hospitals do the HAC Reduction Program apply to?
As set forth under Section 1886 (p) of the Social Security Act, the HAC Reduction Program applies to all subsection (d) hospitals (that is, general acute care hospitals).
What measures are included in the HAC Reduction Program?
The following measures are included in the HAC Reduction Program, grouped here by category:
How do payments change under the HAC Reduction Program?
We reduce the payments of subsection (d) hospitals with a Total HAC Score greater than the 75th percentile of all Total HAC Scores (that is, the worst-performing quartile) by 1 percent.
When do we adjust payments under the HAC Reduction Program?
We adjust payments when we pay hospital claims. The payment reduction is for all Medicare fee-for-service discharges in the corresponding fiscal year.
What is the Scoring Calculations Review and Correction period for the HAC Reduction Program?
The FY 2014 Inpatient Prospective Payment System/Long-Term Care Hospital Prospective Payment System (IPPS/LTCH PPS) Final Rule requires CMS to give hospitals confidential Hospital-Specific Reports.
Which states have negotiated agreements with their larger hospitals and the state hospital association to refrain from billing?
Other states including Minnesota, Vermont, and Washington have negotiated agreements with their larger hospital systems and the state hospital association to refrain from billing when these "never events" occur affecting any individual in the state regardless of their health coverage.
Which states are working on a directive for hospital reimbursement?
Delaware, Georgia, and Oregon are currently working with their hospital associations to develop directives for processing claims related to these events. Before states institute changes in their reimbursement strategies, several variables must be considered.
How much money did CMS save in 2008?
CMS estimates the federal government will realize savings of $50 million per year for the first three years beginning October 1, 2008. Beginning in FY 2012, they estimate savings of $60 million per year. Providers may appeal decisions through the standard CMS appeals process. Affected Hospitals.
Why are the first eight conditions selected last year?
The first eight conditions, which were selected last year because they greatly complicate the treatment of the illness or injury that caused the hospitalization, resulting in higher payments to the hospital for the patient's care by both Medicare and the patient were: Object inadvertently left in after surgery.
What is HHS in healthcare?
The law required the Secretary of Health and Human Services (HHS) to identify at least two hospital-acquired conditions which could have reasonably been avoided through the application of evidence based guidelines and would be subject to the adjustment in payment. Background. The rate of growth in health care costs has made it necessary ...
Is withholding payment for adverse events reasonable?
The Joint Commission on Accreditation of Healthcare Organizations [6] contends that a policy of withholding payment for adverse events is reasonable if certain conditions exist: Evidence that the bulk of the adverse events in question can be prevented by widespread adoption of achievable practices.
The hospital-acquired condition (HAC) reduction program
In an effort to curb MRSA and C. diff infection rates nationwide, the Centers for Medicare & Medicaid Services (CMS) implemented the HAC Reduction Program. Beginning in 2015, payments to hospitals would be directly affected their HAC scores, garnered, in part, by HAI rates.
The impact on hospitals
The CMS’s non-payment policy for HACs, including MRSA and C. diff infections, has already saved Medicare almost $350 million each year. Total Medicare payments to facilities with HAC Reduction Program scores greater than the 75 th percentile (i.e. the worst scoring facilities) are reduced by 1%.
Hospitals respond with quality improvement efforts
As a result of the HAC Reduction Program and the monetary penalization for low-performing facilities, many hospitals have implemented quality improvement (QI) initiatives aimed at reducing infection rates and improving patient outcomes. In many instances, hospitals allocate more resources toward preventing both MRSA and C. diff infections.
New! Quality and safety navigator
To help organizations continue driving towards improved care quality and increased reimbursements, we’ve recently updated Lippincott® Advisor with a new program set called Quality and Safety Navigator.
What is covered condition?
In private or commercial healthcare insurance plans, covered conditions are patient conditions, diseases, or injuries for which the healthcare plan will pay and, correspondingly, covered services are services related to treating the covered conditions, diseases, or injuries. True.
Why did the physician mark his superbill?
The physician marked his superbill for a moderate level of care for every patient, based on the concept that historically, on average, his reimbursements for all patients have been at that level. Additionally, he considered that he would save time, both for himself and his biller, by not having to figure out the actual time spent and level ...
What is a guarantor in healthcare?
In the healthcare sector, when a patient's healthcare services are covered under a voluntary healthcare insurance plan, the person who pays the remainder of a healthcare bill, after the healthcare insurance company has paid, is called the guarantor. True. The physician marked his superbill for a moderate level of care for every patient, ...
When did CMS issue the final rule for Medicare?
Consequently, in July 2008, CMS issued its Final Rule that would apply to inpatient Medicare services for the 2009 fiscal year, starting October 1, 2008.5 Coders were then required to report with each diagnosis whether the condition was present on admission or acquired during the admission. A subset of complications was identified where, when acquired during the hospitalization, the rules would not map that complication to the higher-paying with-CC DRG. For example, if a patient is admitted for cardiothoracic surgery with an existing infection, that patient will be coded to a DRG that acknowledges the infection as pre-existing. However, if that patient develops a surgical wound infection following surgery, the hospital will be paid at the lower DRG, assuming other relevant co-existing comorbidities or complications that could qualify for the higher DRG are not present. The acquired conditions create the situation where the hospital is not paid EXTRA for the acquired condition, but is paid for services at the rate it should have been paid had the patient not acquired what is considered a preventable complication.
Why is it important for a hospital to work with their coders and their physicians?
It is important for hospital laboratories to work with their coders and their physicians to ensure that when complications surface from laboratory reports, those diagnoses are documented by the patient’s physician. Otherwise, in audits of patient medical records, Medicare may discover evidence in a laboratory report (which coders cannot use) of an acquired condition that would have resulted in a payment adjustment. To have not documented and accounted for this situation could be interpreted as an attempt to hide the acquired nature of a condition and potentially lead to allegations of fraud. With appropriately structured systems, laboratory professionals can be instrumental in keeping their hospital systems from encountering such allegations.
What is DRG assignment?
Rules for assigning DRGs are published annually and DRG assignment is based on a combination of diagnosis and procedure codes that are part of the International Classification of Disease, 9th Revision (ICD-9). Codes are generally assigned by trained and certified hospital coders in health information management departments. Coders are guided by fairly rigid rules that address which codes to use in a particular situation, and how to identify which diagnosis represents the principal diagnosis and which procedure is the principal procedure. Coders are also restricted in the information they can use to make these decisions. For example, coders are prohibited from using any information that may be in a laboratory report unless that information is used and documented in the physician notes by the patient’s physician. While the purpose of this is to prevent coders from using information that may not be clinically significant (e.g., sufficiently significant to warrant a physician comment in his or her note), important information may be lost which could significantly impact coding and reimbursement. For example, if the laboratory report clearly shows that the patient has diabetic ketoacidosis (DKA), but the physician never comments on the DKA, the coder cannot code DKA. Diabetic ketoacidosis would be, in many situations, a significant CC that, in the absence of any other CC, could change the DRG assignment from a DRG without a CC to the corresponding DRG with a CC. The with-CC DRGs pay more, sometimes considerably more, than those without CC. It is no surprise, therefore, that hospitals have been working with physicians to make sure that they clearly document patients’ clinical conditions that reside in laboratory, radiology, and other ancillary reports.