Hospital Acquired Conditions

Hospital-Acquired Condition (HAC) Reduction Program

What's the Hospital-Acquired Condition (HAC) Reduction Program?

The HAC Reduction Program encourages hospitals to make patient safety better and reduce the number of hospital-acquired conditions, like pressure sores and hip fractures after surgery.

Why's the HAC Reduction Program important?

The HAC Reduction Program saves Medicare approximately $350 million every year. These savings come from reducing what we pay to hospitals that rank worst among other hospitals for how often their patients get hospital-acquired conditions.

What are applicable HAC Reduction Program hospitals?

As defined under the Social Security Act, all subsection (d) hospitals are subject to the HAC Reduction Program. We exempt certain hospitals and hospital units from the HAC Reduction Program. Exempted hospitals and units include:

  • Critical access hospitals (CAHs)
  • Rehabilitation hospitals and units
  • Long-term care hospitals (LTCHs)
  • Psychiatric hospitals and units
  • Children’s hospitals
  • Prospective Payment System (PPS)-exempt cancer hospitals
  • Veterans Affairs (VA) hospitals
  • Short-term acute care hospitals located in U.S. territories (Guam, Puerto Rico, the U.S. Virgin Islands, the Northern Mariana Islands, and American Samoa)
  • Religious nonmedical health care institutions (RNHCIs)

Find a full description of subsection (d) hospitals.

Note: Maryland hospitals are exempt from payment reductions under the HAC Reduction Program because they currently operate under a waiver agreement between CMS and the state of Maryland.

What measures are included in the HAC Reduction Program?

In the FY 2017 Inpatient Prospective Payment System/Long-Term Care Hospital Prospective Payment System (IPPS/LTCH PPS) Final Rule, we adopted these measures.

FY 2020 measures

CMS Patient Safety Indicator (PSI) 90 (CMS PSI 90)

We calculate the CMS PSI 90 using Medicare Fee-for-service claims for discharges from July 1, 2016 through June 30, 2018. The CMS PSI 90 measure includes:

  • PSI 03 — Pressure Ulcer Rate
  • PSI 06 — Iatrogenic Pneumothorax Rate
  • PSI 08 — In-Hospital Fall with Hip Fracture Rate
  • PSI 09 — Perioperative Hemorrhage or Hematoma Rate
  • PSI 10 — Postoperative Acute Kidney Injury Requiring Dialysis Rate
  • PSI 11 — Postoperative Respiratory Failure Rate
  • PSI 12 — Perioperative Pulmonary Embolism or Deep Vein Thrombosis Rate
  • PSI 13 — Postoperative Sepsis Rate
  • PSI 14 — Postoperative Wound Dehiscence Rate
  • PSI 15 — Unrecognized Abdominopelvic Accidental Puncture/Laceration Rate

Centers for Disease Control and Prevention (CDC) National Healthcare Safety Network (NHSN) Healthcare-Associated Infection (HAI) measures

We calculate the following CDC NHSN HAI measures using chart-abstracted surveillance data reported to NHSN for infections from January 1, 2017 through December 31, 2018:

  • Central Line-Associated Bloodstream Infection (CLABSI)
  • Catheter-Associated Urinary Tract Infection (CAUTI)
  • Surgical Site Infection (SSI) (colon and hysterectomy)
  • Methicillin-resistant Staphylococcus aureus (MRSA) bacteremia
  • Clostridium difficile Infection (CDI)

How do we adjust payments under the HAC Reduction Program?

We’ll reduce the payments of subsection (d) hospitals with a Total HAC Score greater than the 75th percentile of all Total HAC Scores (i.e., the worst-performing quartile) by 1%.

We first apply payment adjustments for the Hospital Value-Based Purchasing (VBP) Program, Hospital Readmissions Reduction Program (HRRP), disproportionate share hospital (DSH) and indirect medical education (IME) based on the base-operating DRG amount. Then, we apply the HAC Reduction Program payment reduction based on the Overall Medicare payment amount.

For example, if a hospital:

  • Is subject to a 2% payment reduction for both the HRRP and Hospital VBP Programs,
  • Doesn’t have DSH adjustments or IME adjustments, and
  • Is subject to the HAC Reduction Program payment adjustment, then

the Final Medicare payment for a discharge with a $10,000 base-operating DRG payment would have a:

  1. Base-operating DRG amount: $10,000
  2. HRRP payment adjustment = $10,000 * -0.02 = -$200
  3. Hospital VBP Program payment adjustment = $10,000 * -0.02 = -$200
  4. DSH and IME payment adjustment = $0
  5. Overall Medicare payment amount = $10,000 - $200 - $200 = $9,600
  6. HAC Reduction Program payment adjustment = $9,600 * -0.01 = -$96 

Final Medicare payment = $9,600 - $96 = $9,504

Get more details about the IPPS methodology in our Acute Payment System Fact Sheet (PDF).

When do we adjust payments under the HAC Reduction Program?

We adjust payments when we pay hospital claims. The payment reduction is for all Medicare fee-for-service discharges between October 1, 2019 and September 30, 2020 (i.e., fiscal year (FY) 2020).

In FY 2020, we let hospitals know whether their payment will be reduced in the HAC Reduction Program Hospital-Specific Report (HSR). We delivered HSRs to hospitals through the QualityNet Secure Portal in July 2019.

What is the Scoring Calculations Review & Corrections period for the HAC Reduction Program?

The FY 2014 IPPS/LTCH PPS Final Rule requires use to give hospitals confidential HSRs. We give hospitals 30 days to review their HAC Reduction Program data, submit questions about the calculation of their results, and request corrections prior to public reporting.

Under the Hospital Inpatient Quality Reporting (IQR) Program, hospitals can submit, review, and correct the CDC NHSN HAI data for the full 4.5 months after the end of the reporting quarter. The Scoring Calculations Review and Corrections period doesn’t let hospitals correct:

  • Reported number of HAIs
  • SIRs
  • Reported central-line days, urinary catheter days, surgical procedures performed, or patient days.

The Scoring Calculation Review and Corrections period also doesn’t let hospitals:

  • Submit more corrections to the underlying CMS PSI 90 claims data.
  • Add new claims to the data extract we use to calculate the results.

How will I know if there are changes to the HAC Reduction Program?

Changes to the program happen through rulemaking and are published every year after a public comment period. They’ll be proposed in the IPPS/LTCH PPS Proposed Rule and finalized in the IPPS/LTCH PPS Final Rule.

Where can I get more information about the HAC Reduction Program?

Learn more about the HAC Reduction Program.

Page Last Modified:
01/06/2020 08:45 AM