The Hospital-Acquired Condition—Present on Admission (HAC-POA) program of 2008 was one of the first federal initiatives to reduce hospital payments on the basis of adverse events. It prevents hospitals from being reimbursed by Medicare for the treatment of certain hospital-acquired conditions (HACs). Subsequently, a number of other programs were developed using a similar approach of attempting to improve quality through restructuring fiscal incentives, although with marked differences in execution. Past national studies on the effectiveness of the HAC-POA program have found conflicting results, so this study uses a differences-in-differences analysis to see whether increases in a hospital’s Medicare utilization ratio (MUR) lead to a greater decline in HACs.
The study found some evidence of a dose-response effect, such as a 43% decrease in relative odds of a hospital in the second MUR quartile having any HACs compared to the first quartile hospitals, but the pattern was not consistent. However, there was a significant decline in certain HACs in selected patient cohorts. These modest results may be a reflection of the limited nature of the HAC-POA program compared to later programs such as the Hospital-Acquired Condition Reduction Program (HACRP). In contrast to HAC-POA, programs like HACRP inflict their financial punishment through adjusting the base payments a hospital receives, potentially leading to much greater loss of reimbursement than nonpayment for HACs. Thus, it may be that the financial incentives involved in HAC-POA are not sufficiently large. That is not to say that HAC-POA has no role to play, though, as the more recent programs are largely based on performance relative to other hospitals. This feature may blunt the response of hospitals that are already high performing, since they are not in danger of being penalized under programs like HACRP, while HAC-POA should continue to promote improvement as it penalizes each and every HAC.
A key area for policymakers looking to build on the limited success of the HAC-POA program would be to expand its reach beyond Medicare. Encouraging the development of analogous programs within Medicaid and private insurance would strengthen the fiscal incentives of hospitals to eliminate HACs.
This Policy Prescriptions® review is written by Matthew Stampfl, a medical student at Baylor College of Medicine, as part of our Health Policy Journal Club Series.
Background: Medicare’s Nonpayment Program of 2008 (hereafter called Program) withholds hospital reimbursement for costs related to hospital-acquired conditions (HACs). Little is known whether a hospital’s Medicare patient load [quantified by the hospital’s Medicare utilization ratio (MUR), which is the proportion of in-patient days financed by Medicare] influences its response to the Program.
Objective: To determine whether the Program was associated with changes in HAC incidence, and whether this association varies across hospitals with differential Medicare patient load.
Research Design: Quasi-experimental study using difference-in-differences estimation. Incidence of HACs before and after Program implementation was compared across hospital MUR quartiles.
Subjects: A total of 867,584 elderly Medicare stays for acute myocardial infarction, congestive heart failure, pneumonia, and stroke that were discharged from 159 New York State hospitals from 2005 to 2012.
Measures: For descriptive analysis, hospital-level mean HAC rates by month, MUR quartile, and Program phase are reported. For multivariate analysis, primary outcome is incidence of the any-or- none indicator for occurrence of at least 1 of 6 HACs. Secondary outcomes are the incidence of each HAC.
Results: The Program was associated with decline in incidence of (i) any-or-none indicator among MUR quartile 2 hospitals (conditional odds ratio = 0.57; 95% confidence interval, 0.38–0.87), and (ii) catheter-associated urinary tract infections among MUR quartile 3 hospitals (conditional odds ratio = 0.30; 95% confidence interval, 0.12–0.75) as compared with MUR quartile 1 hospitals. Significant declines in certain HACs were noted in the stratified analysis.
Conclusions: The Program was associated with decline in incidence of selected HACs, and this decline was variably greater among hospitals with higher MUR. PMID: 27922910 Thirukumaran, CP, et al. Med Care. 2016 Dec 5; [Epub ahead of print]