Change in MS-DRG Assignment and Hospital Reimbursement as a Result of Centers for Medicare & Medicaid Changes in Payment for Hospital-Acquired Conditions

Abstract

Removing HACs from MS-DRG assignment may result in significant cost savings for the Centers for Medicare & Medicaid Services through reduced payment to hospitals. As more conditions are added, the negative impact on hospital reimbursement may become greater. However, it is possible that variation in coding practice may affect cost savings and not reflect true differences in quality of care.

Impact of Medicare's Payment Policy on Mediastinitis Following Coronary Artery Bypass Graft Surgery in US Hospitals

“…This work also adds to growing evidence suggesting that the HAC policy has not yet improved trends in the healthcareassociated infections being targeted. 4 ' 5 This outcome was previously predicted by McNutt et al 36 in a discussion about the likely cost savings for CMS from the HAC policy. In its original form, the 2008 CMS HAC policy was intended to remove the perverse incentive of paying an additional amount for preventable complications occurring during hospitalization.…”

Effect of Nonpayment for Preventable Infections in U.S. Hospitals

“…Previous studies have estimated the potential financial effect of the CMS policy. [18][19][20][21][22] However, changes in infection rates, as measured according to billing data, may simply reflect changes in coding practices rather than changes in true infection rates. We are unaware of any data on whether the policy has led to better patient outcomes, as measured on the basis of clinical or laboratory data.…”

Impact of the Centers for Medicare and Medicaid Services Hospital-Acquired Conditions Policy on Billing Rates for 2 Targeted Healthcare-Associated Infections

“…1 Although the intent of the HAC policy may have been to improve delivery of care by incentivizing hospitals to prevent these conditions, the use of billing data as the metric for motivating behavior change has been fraught with controversy owing to the potential for changes in coding and documentation practices without concurrent improvements in patient outcomes. [3][4][5][6][7] Billing data is necessary for reimbursement purposes, yet experience using administrative and claims data to measure quality of care has been mixed. Some billing metrics have provided an efficient means of assessing and comparing quality across large populations, particularly for surgical site infections, [8][9][10] whereas other metrics using claims data have been found to be imprecise and lacking validity when compared with clinical data.…”