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Study: CMS Penalties for Hospital-Acquired Conditions Have Little Impact


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A study published in Infection Control & Hospital Epidemiology found that hospitals may have dodged financial penalties by billing hospital-acquired conditions (HAC) as present at the time of the patient’s admission. The findings showed that a CMS policy to penalize hospitals for preventable complications had minimal impact on the reduction of hospital-associated infections.

The targeted billing codes were rarely used by hospitals, and the study found that when hospitals billed for HACs during a patient’s stay, it infrequently affected the diagnosis-related group assignment, impacting hospital reimbursement.

“With this policy, CMS was hoping to see more attention paid to improving quality care, but it appears that the original HAC policy mostly led to changes in coding practices,” said study lead author Michael S. Calderwood, MD, MPH, regional hospital epidemiologist at Dartmouth-Hitchcock Medical Center, in a release. “It’s worth further investigation to determine whether Medicare reimbursement codes are being incorrectly used, or if there is now a greater effort to document conditions at the time of the patient’s admission.”

Ten years ago, CMS’ Hospital Inpatient Prospective Payment System stopped reimbursing hospitals for HACs not present on admission (POA), with the hopes of encouraging hospitals to improve their infection prevention practices.

The researchers analyzed more than 65 million Medicare fee-for-service hospitalizations from 2007 to 2011 in acute care facilities, specifically examining documentation for central line-associated bloodstream infections (CLABSI) and catheter-associated urinary tract infections (CAUTI) and whether the codes for those HACs were submitted as POA (which aren’t counted as preventable complications).

The study found that CLABSI and CAUTI affected 0.23% and 0.06% of hospitalizations, respectively, and in the three years immediately after the 2008 CMS policy took effect, 82% of CLABSI codes and 91% of CAUTI codes were marked as POA. This was a significant increase compared with before the HAC policy was implemented.

Diagnosis coding for CAUTI and CLABSI that was not POA from 2007 to 2011 dropped dramatically. In 2007, hospitals discharged 6,172 patients with a CAUTI diagnosis code, 99.8% of whom were marked not POA; comparatively, in 2011 when 6,448 patients were coded as having a CAUTI, just 10.7% of them had the no POA designation.