Medicare’s Payment Policy for Hospital-Acquired Conditions

Abstract

In 2008, Medicare implemented a policy limiting reimbursement to hospitals for treating avoidable hospital-acquired conditions (HACs). Although the policy will expand nationally to Medicaid programs in 2011, little is known about the impact on safety net hospitals. The authors conducted interviews with 60 chief quality officers and 55 chief financial officers from safety net hospitals to explore the impact of Medicare’s HACs policy during its first year. Despite the predicted small financial impact, the authors found that the policy gained the attention of hospital leaders and many governing boards. Although the policy reportedly provided additional motivation to reduce HACs, few hospitals implemented new care practices and instead focused on documenting conditions that are present for patients on admission. The findings also illustrate the need for Centers for Medicare & Medicaid Services to provide more guidance to the industry when this type of policy is introduced.