The federal government penalized 774 hospitals for having the highest rates of patient infections or other potentially preventable medical complications. These hospitals, which include some of the country’s top medical centers, will lose 1% of their Medicare payments in 12 months.
The penalties, based on patients who stayed in hospitals between mid-2017 and 2019, before the pandemic, are unrelated to covid-19. They were charged under a program created by the Affordable Care Act that uses the threat of losing Medicare money to motivate hospitals to protect patients from harm.
On any given day, one in 31 patients in the hospital has an infection that was contracted during their stay, according to the Centers for Disease Control and Prevention. Infections and other complications can prolong hospital stay, complicate treatments and, in the worst cases, kill patients.
“Although significant progress has been made in preventing some types of infections associated with healthcare, there is much more work to be done,” says the CDC.
In its seventh year, the Hospital Acquired Conditions Reduction Program was met with disapproval and resignation from hospitals, who argue that penalties are applied arbitrarily. According to the law, Medicare each year must punish a quarter of general care hospitals with the highest rates of patient safety problems. The government assesses rates of infections, blood clots, cases of sepsis, bed sores, hip fractures and other complications that occur in hospitals and may have been prevented. The total amount of the penalty is based on how much Medicare pays each hospital during the federal fiscal year – from last October to September.
Hospitals can be punished even if they have improved in recent years – and some have improved. Sometimes the difference in infection and complication rates between punished hospitals and those who escape punishment is negligible, but the requirement to penalize a quarter of hospitals is inflexible under the law. Akin Demehin, policy director for the American Hospital Association, said the penalties were “a game of chance” based on “extremely wrong” measures.
Some hospitals insist that they received penalties because they were more meticulous than others in finding and reporting infections and other complications to the Federal Centers for Medicare and Medicaid Services and the CDC.
“The all-or-nothing penalty is unlike any other in Medicare programs,” said Dr. Karl Bilimoria, vice president of quality at Northwestern Medicine, whose flagship at Northwestern Memorial Hospital in Chicago was penalized this year. He said Northwestern takes the penalty seriously because of the amount of money at stake, “but at the same time, we know that we will have some problems with some of the measures because we do a very good job of identifying” complications.
Other renowned hospitals penalized this year include Ronald Reagan UCLA Medical Center and Cedars-Sinai Medical Center in Los Angeles; UCSF Medical Center in San Francisco; Beth Israel Deaconess Medical Center and Tufts Medical Center in Boston; New York Presbyterian Hospital in New York; UPMC Presbyterian Shadyside in Pittsburgh; and Vanderbilt University Medical Center in Nashville, Tennessee.
There were 2,430 hospitals not penalized because their rates of patient complications were not among the first in the quarter. Another 2,057 hospitals were automatically excluded from the program, either because they serve only children, veterans or psychiatric patients, or because they have a special status as a “critical access hospital” due to the lack of close alternatives for people who need hospitalization.
Penalties were not evenly distributed across states, according to a KHN analysis of Medicare data that included all categories of hospitals. Half of Rhode Island’s hospitals were penalized, as well as 30% of those in Nevada.
All Delaware hospitals have escaped punishment. Medicare excludes all Maryland hospitals from the program because it pays for them under a different agreement than in other states.
Throughout the program, 1,978 hospitals were penalized at least once, KHN’s analysis concluded. Of these, 1,360 hospitals have been punished several times and 77 hospitals have been penalized in all seven years, including UPMC Presbyterian Shadyside.
The Medicare Advisory Payments Commission, which reports to Congress, said in a 2019 report that “it is important to drive quality improvement by linking infection rates to payment.” But the commission criticized the program’s use of a “tournament” model that compares hospitals to each other. Instead, he recommended fixed targets that let hospitals know what is expected of them and that do not artificially limit how many hospitals can succeed.
Although federal authorities have changed other penalty programs created by the ACA in response to complaints from hospitals and independent critics – such as one focused on patient readmissions – they have not made substantial changes to this program because the key elements are incorporated into the bylaws and would require changes by Congress.
Beth Israel Deaconess of Boston said in a statement that “we employ a wide range of quality patient care efforts and use reports, such as those from the Medicare and Medicaid Service Centers, to identify and address opportunities for improvement.”
UCSF Health said its hospital has made “significant improvements” since the period Medicare measured to assess the penalty.
“UCSF Health believes that many of the measures listed in the report are significant for patients and are also valid standards for health systems to improve,” the hospital health system said in a statement to KHN. “Some of the categories, however, are not risk-adjusted, which results in misleading and inaccurate comparisons.”
Cedars-Sinai said the penalty program disproportionately punishes academic medical centers for their patients’ “high acuity and complexity”, details that are not captured in Medicare billing data.
“This claim data was not designed for this purpose and is usually not specific enough to reflect the nuances of complex clinical treatment,” said the hospital. “Cedars-Sinai continuously tracks and monitors rates of complications and infections and updates processes to improve the care we provide to our patients.”