Hospital-Acquired Condition (HAC) Reduction Program

Section 1886(p) of the Social Security Act established the Hospital-Acquired Condition (HAC) Reduction Program to encourage hospitals to reduce HACs. Beginning with Federal Fiscal Year (FY) 2015 discharges (i.e., beginning on October 1, 2014), the HAC Reduction Program requires the Secretary of Health and Human Services (HHS) to adjust payments to hospitals that rank in the worst-performing 25 percent of all subsection (d) hospitals with respect to HAC quality measures. As set forth in the Affordable Care Act, the Centers for Medicare & Medicaid Services (CMS) may reduce these hospitals’ payments by one percent.

CMS finalized measures and scoring methodology for this program in the FY 2014 Inpatient Prospective Payment System/Long-Term Care Hospital Prospective Payment System (IPPS/LTCH PPS) Final Rule (vol 78 FR 50496, 50709 (August 18, 2013)). CMS uses the Total HAC Score to determine the worst-performing quartile of all subsection (d) hospitals. CMS finalized the new Equal Weights Measure approach for the FY 2020 HAC Reduction Program in the FY 2019 IPPS/LTCH PPS Final Rule. CMS finalized and adopted the Winsorized z-score methodology for the FY 2018 HAC Reduction Program in the FY 2017 IPPS/LTCH PPS Final Rule. For FY 2020, the Total HAC Score is based on data for six quality measures:

  • CMS Patient Safety Indicator (PSI) 90 (CMS PSI 90)
  • Centers for Disease Control and Prevention (CDC) National Healthcare Safety Network (NHSN) Healthcare-Associated Infection (HAI) measures:
    • 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)

For more information on HAC quality measures and scoring methodology, refer to the HAC Reduction Program Measures page and the Scoring Methodology page.

The Patient Protection and Affordable Care Act requires CMS to publicly report hospitals’ performance information. CMS sends confidential Hospital-Specific Reports (HSRs) to hospitals. CMS gives hospitals 30 days to review their HAC Reduction Program data, submit questions about the calculation of their results, and request corrections. Refer to the Scoring Calculations Review and Corrections page for additional information.

Following the Scoring Calculations Review and Corrections period, CMS will publicly report hospitals’ measure scores, and HAC Reduction Program data in January 2020 on Hospital Compare. The HAC Reduction Program data will not be a part of the consumer-oriented “Compare Hospitals” pages on Hospital Compare.

Important Note: The HAC Reduction Program is distinct from the Deficit Reduction Act: Hospital-Acquired Conditions (Present on Admission Indicator) program. The Deficit Reduction Act (DRA) of 2005, which the President signed on February 8, 2006, mandated the Deficit Reduction Act: Hospital-Acquired Conditions (Present on Admission Indicator) program. Section 5001(c) of DRA requires the Secretary to identify conditions that: (a) are high cost and/or high volume, (b) result in the assignment of a case to a diagnostic-related group (DRG) with a higher payment when present as a secondary diagnosis, and (c) could reasonably have been prevented through the application of evidence-based guidelines. Section 5001(c) provides that CMS can revise the list of conditions from time to time, if it contains at least two conditions. For more information on the Deficit Reduction Act: Hospital-Acquired Conditions (Present on Admission Indicator) program, refer to the Hospital-Acquired Conditions (Present on Admission Indicator) page on the CMS website.

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