Health Care Paradox: Medicare Penalizes Dozens of Hospitals and Also Gives Them Five Stars


The federal government has penalized 764 hospitals — including more than three dozen that it simultaneously ranks among the best in the nation — for having the highest number of patient infections and potentially preventable complications.

The penalties — a 1% reduction in Medicare payments over 12 months — are based on the experiences of Medicare patients discharged from hospital between July 2018 and late 2019, before the pandemic began in earnest. The penalties, which the Affordable Care Act requires to be assessed on the bottom 25% of general hospitals each year, are aimed at getting hospitals to focus on reducing pressure sores, hip fractures, blood clots blood and the cohort of infections that before covid-19 were the greatest scourges in hospitals. These include surgical infections, urinary tract infections caused by catheters, and antibiotic-resistant germs like MRSA.

This year’s list of penalized hospitals includes Cedars-Sinai Medical Center in Los Angeles; Northwestern Memorial Hospital in Chicago; a Cleveland Clinic hospital in Avon, Ohio; a Mayo Clinic hospital in Red Wing, Minnesota; and a Mayo Hospital in Phoenix. Ironically, all of these hospitals have five stars, the highest rating, on Medicare’s Care Compare website.

Eight years after the nosocomial illness reduction program was launched, 2,046 hospitals have been penalized at least once, according to a KHN analysis. But the researchers found little evidence that penalties prompt hospitals to improve their efforts to prevent pressure sores, falls, infections and other mishaps.

“Unfortunately, in just about every way the program was a failure,” said Andrew Ryan, a professor of health care management at the University of Michigan School of Public Health, who has published extensively. on the program.

“It’s very difficult to capture patient safety with the surveillance methods we have now,” he said. One problem, he added, is “you’re kind of asking hospitals to call events that are going to cost them money, so the incentives are really messed up for hospitals to fully disclose” the patient injuries. Academic medical centers say the reason nearly half of them are penalized each year is because they are more diligent in finding and reporting infections.

Another issue raised by researchers and the hospital industry is that by law, the Centers for Medicare & Medicaid Services must annually sanction the quarter of general care hospitals with the highest rates of patient safety issues. patients, even if they have improved and even if their infection and complication rates differ only infinitely from those of some non-penalized hospitals.

In a statement, CMS noted that it had limited ability to modify the program. “CMS is committed to ensuring the safety and quality of care for hospitalized patients through a variety of initiatives,” CMS said. “Much of the structure of the HAC program, including the amount of penalties, is determined by law.”

In assigning the penalties, CMS assessed 3,124 acute general hospitals. About 2,000 hospitals are exempt from assessment. Many of them are critical access hospitals, which are the only hospitals serving a geographic area – often rural. The law also excuses hospitals that focus on rehabilitation, long-term care, children, psychiatry or veterans. And Maryland hospitals are excluded because the state has a different method of paying its hospitals for Medicare patients.

For penalized hospitals, Medicare payments are reduced by 1% for each bill from October 2021 through September 2022. The total penalty amount is determined by the amount each hospital bills Medicare.

A third of the hospitals sanctioned in the list published this year had not been sanctioned the previous year. Some, like UC Davis Medical Center in California, have been in and out of the penalty box over the eight years of the program. Davis was penalized for four years and unpunished for four years.

“UC Davis Medical Center is usually a few points away from [Hospital-Acquired Condition Reduction Program] threshold, so it is not unusual to enter and exit the program from year to year,” UC Davis Health said in an email. He said Davis ranked 38th out of 101 academic medical centers that use a private quality measurement system.

The Cleveland Clinic said its satellite hospital in Avon has received awards from private groups, such as an “A” grade for patient safety from nonprofit group Leapfrog. Both he and Cedars-Sinai touted their five-star ratings. Additionally, Cedars said the overall assessment comes in even though the hospital is treating a large number of very sick patients. “This rating is particularly meaningful given the complexity of care that many of our patients require,” Cedars said in a statement.

Other hospitals declined to comment or did not respond to emails.

KHN’s analysis found that the government penalized 38 out of 404 hospitals that were both included in the hospital-acquired condition assessment and received five stars for “overall quality,” which CMS calculates using dozens of settings. These include not only infection and complication rates, but also mortality rates, readmission frequencies, assessments that patients give to the hospital after discharge, and the consistency of hospitals in following protocols for timely basis, such as giving patients medication to break up blood clots within 30 minutes of showing symptoms of potential heart attacks.

Additionally, 138 of the 814 hospitals with the second-highest rating of four stars have been docked by the program, KHN found.

Lower-rated hospitals were penalized with higher frequency: although only 9% of five-star hospitals were penalized, 67% of one-star hospitals were.

KHN’s analysis revealed major discrepancies between the list of penalized hospitals and how Medicare’s Care Compare rated them for virtually the same infection rates and conditions for patient safety. On the Medicare site, two-thirds of penalized hospitals are rated as “no different than average” or “better than average” for public safety measures used by CMS to award stars. The main differences relate to the timing of these measures and the structure of the sanctions program. The Medicare website, for example, only assessed one year of infection rates, rather than the 18 months examined by the sanctions program. And public ratings are more lenient than penalties: Care Compare rates each hospital’s patient safety measure as average unless it’s significantly higher or lower than most hospitals’ scores, while the sanctions always punishes the lowest quartile.

Nancy Foster, vice president for quality and patient safety at the American Hospital Association, said the sanctions would cause more stress on hospitals that are already struggling to manage the influx of covid patients, staffing shortages and the additional costs of personal protective equipment. “It’s demoralizing for staff to see their hospital deemed unsafe or less safe than other hospitals,” she said.

Dr. Karen Joynt Maddox, co-director of the Center for Health Economics and Policy at Washington University in St. Louis, said it was time for Congress and CMS to reassess the sanctions program. “When this program started, it was thought that we would get to zero ‘preventable complications,’ she said, “and that didn’t turn out to be the case despite a very good effort from some of these hospitals. “.

She said the Hospital Acquired Conditions Penalty Program, along with other quality improvement programs created by the ACA, feels “very ready for a refresh.”

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