Cost and Quality

Medicare Cuts Payment to 774 Hospitals Over Patient Complications

The federal government has penalized 774 hospitals for having the highest rates of patient infections or other potentially avoidable medical complications. Those hospitals, which include some of the nation’s marquee medical centers, will lose 1% of their Medicare payments over 12 months.

The penalties, based on patients who stayed in the hospitals anytime between mid-2017 and 2019, before the pandemic, are not related to covid-19. They were levied 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 every 31 hospital patients 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 stays, complicate treatments and, in the worst instances, kill patients.

“Although significant progress has been made in preventing some healthcare-associated infection types, there is much more work to be done,” the CDC says.

Now in its seventh year, the Hospital-Acquired Condition Reduction Program has been greeted with disapproval and resignation by hospitals, which argue that penalties are meted out arbitrarily. Under the law, Medicare each year must punish the quarter of general care hospitals with the highest rates of patient safety issues. The government assesses the rates of infections, blood clots, sepsis cases, bedsores, hip fractures and other complications that occur in hospitals and might have been prevented. The total penalty amount is based on how much Medicare pays each hospital during the federal fiscal year — from last October through September.

Hospitals can be punished even if they have improved over past years — and some have. At times, the difference in infection and complication rates between the hospitals that get punished and those that escape punishment is negligible, but the requirement to penalize one-quarter of hospitals is unbending under the law. Akin Demehin, director of policy at the American Hospital Association, said the penalties were “a game of chance” based on “badly flawed” measures.

Some hospitals insist they received penalties because they were more thorough than others in finding and reporting infections and other complications to the federal Centers for Medicare & Medicaid Services and the CDC.

“The all-or-none penalty is unlike any other in Medicare’s programs,” said Dr. Karl Bilimoria, vice president for quality at Northwestern Medicine, whose flagship 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 trouble with some of the measures because we do a really good job 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; NewYork-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 patient complication rates were not among the top quarter. An additional 2,057 hospitals were automatically excluded from the program, either because they solely served children, veterans or psychiatric patients, or because they have special status as a “critical access hospital” for lack of nearby alternatives for people needing inpatient care.

The penalties were not distributed evenly 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 were 30% of Nevada’s.

All of Delaware’s hospitals escaped punishment. Medicare excludes all Maryland hospitals from the program because it pays them through a different arrangement than in other states.

Over the course of the program, 1,978 hospitals have been penalized at least once, KHN’s analysis found. Of those, 1,360 hospitals have been punished multiple times and 77 hospitals have been penalized in all seven years, including UPMC Presbyterian Shadyside.

The Medicare Payment Advisory Commission, which reports to Congress, said in a 2019 report that “it is important to drive quality improvement by tying infection rates to payment.” But the commission criticized the program’s use of a “tournament” model comparing hospitals to one another. Instead, it recommended fixed targets that let hospitals know what is expected of them and that don’t artificially limit how many hospitals can succeed.

Although federal officials have altered other ACA-created penalty programs in response to hospital complaints and independent critiques — such as one focused on patient readmissions — they have not made substantial changes to this program because the key elements are embedded in the statute and would require a change by Congress.

Boston’s Beth Israel Deaconess said in a statement that “we employ a broad range of patient care quality efforts and use reports such as those from the Centers for Medicare & Medicaid Services to identify and address opportunities for improvement.”

UCSF Health said its hospital has made “significant improvements” since the period Medicare measured in assessing the penalty.

“UCSF Health believes that many of the measures listed in the report are meaningful to patients, and are also valid standards for health systems to improve upon,” 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 disproportionally punishes academic medical centers due to the “high acuity and complexity” of their patients, details that aren’t captured in the Medicare billing data.

“These claims data were not designed for this purpose and are typically not specific enough to reflect the nuances of complex clinical care,” the hospital said. “Cedars-Sinai continually tracks and monitors rates of complications and infections, and updates processes to improve the care we deliver to our patients.”

Source

Look Up Your Hospital: Is It Being Penalized By Medicare?

Under programs set up by the Affordable Care Act, the federal government cuts payments to hospitals that have high rates of readmissions and those with the highest numbers of infections and patient injuries. For the readmission penalties, Medicare cuts as much as 3 percent for each patient, although the average is generally much lower. The patient safety penalties cost hospitals 1 percent of Medicare payments over the federal fiscal year, which runs from October through September. Maryland hospitals are exempted from penalties because that state has a separate payment arrangement with Medicare.

Below are look-up tools for each type of penalty. You can search by hospital name or location, look at all hospitals in a particular state and sort penalties by year.

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4 Vital Health Issues — Not Tied to Covid — That Congress Addressed in Massive Spending Bill

Late last month, before President Joe Biden took office and proposed his pandemic relief plan, Congress passed a nearly 5,600-page legislative package that provided some pandemic relief along with its more general allocations to fund the government in 2021.

While the $900 billion that lawmakers included for urgent pandemic relief got most of the attention, some even bigger changes for health care were buried in the other parts of that huge legislative package.

The bundle included a ban on surprise medical bills, for example — a problem that key lawmakers had been wrestling with for two years. Starting in 2022, because of the new law, patients generally will not pay more for out-of-network care in emergencies and at otherwise in-network facilities.

But surprise bills weren’t the only health care issue Congress addressed as it ended a tumultuous year. Lawmakers also answered pleas from strained health facilities in rural areas, agreed to cover the cost of training more new doctors, sought to strengthen efforts to equalize mental health coverage with that of physical medicine and instructed the federal government to collect data that could be used to rein in high medical bills.

Here are some details about those big changes Congress made in December.

Rural Hospitals Get a Boost

Throwing a lifeline to struggling rural health systems — and, it appears, a bone to an outgoing congressional committee chairman — lawmakers gave rural hospitals a way to get paid by Medicare for their services regardless of whether they have patients in beds.

The law creates a new category of provider, known as a “rural emergency hospital.” Starting in 2023, some hospitals will qualify for this designation by maintaining full-time emergency departments, among other criteria, without being required to provide in-patient care. The Department of Health and Human Services will determine how the program is implemented and which services are eligible.

Medicare, the federal insurance program that covers more than 61 million Americans 65 and older or with certain disabilities, currently does not reimburse hospitals for emergency or hospital outpatient services unless the hospital also offers in-patient care.

That requirement has exacerbated financial problems for rural hospitals, many of which balance serving communities with fewer patients and less need for full in-patient services with the need for emergency and outpatient services. One study last year found 120 rural hospital facilities had closed in the past 10 years, with more at risk.

Hospital groups have praised the change, which was introduced by Sen. Chuck Grassley (R-Iowa), who has championed rural health issues and ended his term as chairman of the Senate Finance Committee this month. “I worked to ensure rural America would not go overlooked,” he said in a statement.

Medicare Invests in More Doctors

Hoping to address a national shortage of doctors that has reached critical levels during the pandemic, Congress created an additional 1,000 residency positions over the next five years.

Medicare will fund the positions, which involve supervised training to medical school graduates going into specialties like emergency medicine and are distributed among hospitals most in need of personnel, including rural hospitals.

Critics like The Wall Street Journal’s editorial board have noted this is Congress’ attempt to fix a problem it created in the late 1990s, when lawmakers capped the number of Medicare-funded residency positions in the United States, fearing too many doctors would inflate the cost of Medicare.

While Medicare is not the only source of educational funding and hospitals may add their own residency slots as needed, Medicare generally will reimburse hospitals for the number of residents they had at the end of 1996. Among other consequences of that 1996 cap, most Medicare-funded residencies are clumped at Northeastern hospitals, a 2014 study showed.

In contrast to the 1,000 positions created as part of the stimulus package, one bipartisan proposal in 2019 that was never enacted would have added up to 15,000 positions over five years.

Strengthening Mental Health Parity

The legislative package strengthens protections for mental health coverage, requiring federal officials to study the limitations insurance companies place on coverage for mental health and substance use disorder treatments.

In 1996 Congress passed the first law barring health insurers from passing along more of the cost for mental health care to patients than they would for medical or surgical care. The Affordable Care Act, building on earlier laws, made mental health and substance use disorder treatments an “essential health benefit” — in other words, it required most health insurance plans to cover mental health care.

But enforcing that standard has been a challenge, in part because violations can be hard to spot and the system has often relied on patients to notice — and report — them.

In December, lawmakers approved a measure requiring insurers to analyze their coverage and provide their findings to state and federal officials upon request.

They also instructed federal officials to request the findings from at least 20 plans per year that may have violated mental health parity laws and tell insurers how to correct any problems they find — under penalty of having insurer violations reported to their customers if they do not comply.

The law requires federal officials to publish an annual report summarizing the analyses they collect.

More Transparency in Cost and Quality

Americans often do not know how much they will be expected to pay when they enter a doctor’s office, an ambulance or an emergency room.

Taking another modest step toward transparency, Congress banned so-called gag clauses in contracts between health insurers and providers.

Among other things, these sorts of “gag” restrictions previously have prevented insurers and group health plans from sharing with patients and others — such as employers — information about a provider’s prices or quality. The December legislation also prohibited insurers from agreeing to contracts that prevent them from getting access electronically to claims and other information from providers on behalf of the insurer’s enrollees.

In 2018, Congress banned gag clauses in contracts between pharmacies and insurers or pharmacy benefit managers. Those gag clauses had prevented pharmacists from sharing cost information with patients, like whether they could pay a lower price for a prescription by paying out-of-pocket rather than using their insurance coverage.

The proposal approved in December’s legislation came from a big, bipartisan package of health care cost fixes passed in 2019 by the Senate Health, Education, Labor and Pensions Committee, but not by the rest of Congress. The committee’s Republican chairman, Sen. Lamar Alexander of Tennessee, retired from Congress this month. His Democratic partner on that package, Sen. Patty Murray of Washington, will take over the chairmanship as Democrats assume control of the Senate and has vowed to focus on health care affordability.

Consumers First, a health consumer-focused alliance of health professionals, labor unions and others, led by Families USA, praised the ban. The change is “a significant step forward” to stop “the abusive practices from hospitals and health systems and other segments of the health care sector that are driving up health care costs and making health care unaffordable for our nation’s families, workers, and employers,” it said in a statement.

KHN senior correspondent Sarah Jane Tribble contributed to this report.