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How hospital-acquired infections affect the bottom line


Substandard care can lead to reduced payments for hospitals with excess readmissions.

finances, hospital-acquired infections, bottom line, readmissions, VBP, Medicare

igorkol tel / Adobe Stock

Section 1886(o) of the Social Security Act establishes the Hospital Value-Based Purchasing (VBP) Program, which affects more than 3,000 hospitals’ payments for inpatient stays. The program’s primary objective is to reward acute-care hospitals for the quality of care provided to Medicare beneficiaries.

The Centers for Medicare & Medicaid Services (CMS) recently estimated that the total amount available to acute-care hospitals for VBP incentive payments in fiscal year 2019 is approximately $1.9 billion. VBP performance scores are based upon four factors, which are equally weighted:

  • Clinical care

  • Safety

  • Person and community engagement

  • Efficiency and cost reduction

The Hospital Readmissions Reduction Program (HRRP), which reduces payments to hospitals with excess readmissions, was established as part of the VBP Program and Section 3025 of the Affordable Care Act. Beginning in fiscal year 2019, the 21st Century Cures Act requires CMS to assess penalties based on a hospital’s performance relative to other hospitals with a similar patient mix (i.e., patients who are dually eligible for Medicare and full-benefit Medicaid). Although the payment reduction is capped at 3 percent, this could still have a significant impact on physicians and other healthcare providers.

In order to avert a payment reduction or penalty, it is imperative for physicians and hospitals to work collaboratively, especially in relation to the excess readmission rate for these six conditions/procedures:

  • Acute myocardial infarction

  • Chronic obstructive pulmonary disease (COPD)

  • Pneumonia

  • Heart failure

  • Coronary artery bypass graft (CABG) surgery

  • Elective primary total hip arthroplasty and/or total knee arthroplasty

In order to maximize the incentive payments available and avoid a payment reduction, a team-based approach is needed. Here are four suggestions for improving outcomes and, in turn, reimbursement.

  • As pedestrian as this may sound, staff should be reminded to wash their hands and utilize universal precautions.

  • Communication between members of the care team cannot be emphasized enough.

  • Make sure that patient call bells are plugged into the wall and are working. If not, this can result in a much slower staff response time and greater complications.

  • The hospital’s executive team should review the annual Hospital-Specific Report and implement an enterprise risk management program to improve deficiencies.

By taking these steps, patients will have better outcomes through a collaborative approach, and physicians and providers will see a more robust revenue stream.

Rachel V. Rose, JD, MBA, advises clients on compliance and transactions in healthcare, cybersecurity, corporate and securities law, while representing plaintiffs in False Claims Act and Dodd-Frank whistleblower cases. She also teaches bioethics at Baylor College of Medicine in Houston. Rachel can be reached through her website,

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