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Financial Penalties for Preventable Infections: An Incentive for Performance Improvement?

Posted on 01/14/15


The long-awaited release of the Centers for Medicare and Medicaid Services (CMS) Hospital-Acquired Condition (HAC) Reduction Program report identified 724 U.S. hospitals ranking in the worst performing quartile based on the hospital’s performance on three quality measures: a composite patient safety measure developed by the Agency for Healthcare Research and Quality, central- line associated bloodstream infections (CLABSI), and catheter-associated urinary tract infections (CAUTI). The healthcare-associated infection measures were drawn from data reported to the CDC’s National Healthcare Safety Network (NHSN) and constituted two-thirds of the weighted score. Unlike the base operating DRG penalties incurred through the value-based purchasing and readmissions programs, the HAC’s 1% penalty will apply to total payments to the hospital, including the payments received by teaching hospitals for treating large number of indigent patients, for all hospital discharges occurring after October 1, 2014.

Many healthcare quality and infection prevention professionals wonder if nonpayment for potentially preventable infections will lead to improvements in the delivery of care and a subsequent reduction in these adverse patient outcomes. Isn’t that the ultimate goal of pay-for-performance reform? 

Recent papers examined this question with differing results. Lee et al1 reviewed Medicare and Medicaid data from 398 hospitals participating in the NHSN and did not find a significant change in the rates of CLABSI or CAUTI after CMS reimbursement rates were altered in 2008. Waters and colleagues2, using data from 1,381 hospitals reporting data to the National Database of Nursing Quality Indicators, found an 11% reduction in CLABSI and a 10% reduction in CAUTI with no change associated with targeted non-infectious hospital-acquired conditions (pressure ulcers and patient injurious falls) after initiation of the CMS policy. This paper suggests that adoption of evidence-based prevention practices - which were well established and publicized for reducing the incidence of CLABSI and CAUTI in 2008 - when aligned with a financial incentive, can positively impact patient safety. I would point out that good science does not always lead to consistent and sustained translation of evidence-based practices to the bedside. Hospitals on the Medicare list may need some re-engineering of their organizational culture to ensure that a structure exists for team-led performance improvement interventions among key stakeholders.    

The transparency of infection data in the public domain and the potential impact on the reputation and revenue stream of hospitals may serve as catalysts for the development of care systems that are prevention-oriented. One caveat: It is possible that publicly reported data without proper risk adjustment could result in hospitals being penalized simply because they care for sicker patients. It is also possible that variability in surveillance methodology and billing coding practices in hospitals would result in biased outcome data. Therefore, it is critical for the science of risk adjustment for healthcare-associated infections to advance to ensure meaningful interpretation of publicly reported data.

Author: Joan N. Hebden, RN, MS, CIC

1Lee GM, Kleinman K, Soumerai SB, et al. Effect of Nonpayment for Preventable Infections in U.S. Hospitals. N Eng J Med 2012;367(15):1428-37.

2Waters TM, Daniels MJ, Bazzoli GJ, Perencevich E, et al. Effect of Medicare’s Nonpayment for Hospital-Acquired Conditions – Lessons for Future Policy. JAMA Intern Med Published online January 05, 2015, Accessed January 12, 2015.

Topics: Infection Prevention

About the Author

Joan N. Hebden, RN, MS, CIC served as the Director of Infection Prevention and Control for 28 years at the University of Maryland Medical Center, Baltimore, MD. Her clinical background includes general medicine, oncology, and cardiothoracic intensive care. She has presented at national epidemiology conferences, participated in research regarding the transmission of multi-drug resistant bacteria, contributed chapters on infection control to nursing resource textbooks, and published in medical and infection control journals. Joan received her Bachelor of Science degree in nursing and a Master of Science degree in nursing education and trauma/critical care from the University of Maryland School of Nursing. She is certified in Infection Control & Epidemiology (CIC). Joan is an active member of SHEA and APIC and is currently on the Editorial Board of the American Journal of Infection Control (AJIC).