The Association of Hospital Magnet® Status and Pay-for-Performance Penalties

Abstract

The Centers for Medicare and Medicaid Services’ Pay-for-Performance (P4P) programs aim to improve hospital care through financial incentives for care quality and patient outcomes. Magnet® recognition—a potential pathway for improving nurse work environments—is associated with better patient outcomes and P4P program scores, but whether these indicators of higher quality are substantial enough to avoid penalties and thereby impact hospital reimbursements is unknown. This cross-sectional study used a national sample of 2,860 hospitals to examine the relationship between hospital Magnet® status and P4P penalties under P4P programs: Hospital Readmission Reduction Program, Hospital-Acquired Conditions (HAC) Reduction Program, Hospital Value-Based Purchasing (VBP) Program. Magnet® hospitals were matched 1:1 with non-Magnet hospitals accounting for 13 organizational characteristics including hospital size and location. Post-match logistic regression models were used to compute a hospital's odds of penalties. In a national sample of hospitals, 77% of hospitals experienced P4P penalties. Magnet® hospitals were less likely to be penalized in the VBP program compared to their matched non-Magnet counterparts (40% vs. 48%). Magnet® status was associated with 30% lower odds of VBP penalties relative to non-Magnet hospitals. Lower P4P program penalties is one benefit associated with achieving Magnet® status or otherwise maintaining high-quality nurse work environments.