Healthcare News & Insights

More hospitals to receive Medicare pay cuts

The feds have started to ramp up the penalties for poor patient outcomes. This year, the Centers for Medicare & Medicaid Services (CMS) included some new conditions in its Hospital-Acquired Condition Reduction program – and more hospitals will feel the pain in their wallets than ever before. 

In total, 769 hospitals will receive Medicare payment cuts under the program, according to an article from Kaiser Health News.

Last year, 758 hospitals were penalized for issues with patient safety, while 721 hospitals experienced pay cuts in 2014. In addition, 40% of hospitals that are receiving penalties this year didn’t receive any cuts during the first two years of the program.

The reason for the climb was likely due to CMS’ inclusion of rates for two different antibiotic-resistant infections: MRSA and C. diff. Both these infections have been difficult for hospitals to get under control.

Other conditions CMS considers when distributing pay reductions include blood clots, bedsores and patient falls, along with infections such as central-line bloodstream infections and catheter-associated urinary tract infections.

Preventable harm in hospitals is generally on the decline. A recent report from the Department of Health and Human Services (HHS) and the Agency for Healthcare Research and Quality (AHRQ) showed that rates of hospital-acquired conditions decreased by 21% from 2010 to 2015.

However, millions of people still experience preventable problems in hospitals. Numbers from AHRQ show that there were 3.8 million hospital injuries in 2015 alone. And every year, close to 250,000 people are infected with drug-resistant bacteria like C. diff and MRSA in hospitals, according to data from the Centers for Disease Control and Prevention (CDC).

And as long as these numbers remain as high as they are, hospitals will continue to experience penalties.

Impact on hospitals

Due to the pay cuts, each hospital penalized will lose 1% of its Medicare reimbursement over the course of a year. Estimates cited in the Kaiser Health News piece suggest facilities will lose about $430 million in all, or 18% more than last year’s pay cuts. Large facilities could potentially lose over $1 million each.

This loss can add up over time. Currently, 241 hospitals have received pay cuts over the entire length of the Hospital-Acquired Condition Reduction Program, including UCLA Medical Center and Brigham & Women’s Hospital.

The only way to prevent these penalties is to improve your hospital’s performance – 347 hospitals that were penalized last year managed to avoid the same fate this year because they did better than other facilities at avoiding infections and preventable harm.

Boosting infection prevention efforts, and making hospital staff aware about evidence-based guidelines to avoid pressure ulcers and patient falls, can help ensure your hospital’s moving in the right direction for keeping pay cuts at bay next year.

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