WBB's Thought Leadership

$430 Million in Medicare Penalties Imposed on 769 Hospitals

January 9


Medicare penalties for avoidable complications rose 18 percent in 2016. Hospitals were penalized for the first time for spread of two antibiotic-resistant bacteria: methicillin-resistant Staphylococcus aureus (MRSA) and Clostridium difficile (C. diff).

Some in the hospital industry complain that the penalties are arbitrary because they are based on a quota of 25 percent of hospitals regardless of trends in performance. Another complaint is that hospitals are penalized if they are more vigilant in detecting infections.

Excerpt: “The federal government has cut payments to 769 hospitals with high rates of patient injuries, for the first time counting the spread of antibiotic-resistant germs in assessing penalties.

“The punishments come in the third year of Medicare penalties for hospitals with patients most frequently suffering from potentially avoidable complications, including various types of infections, blood clots, bed sores and falls. This year the government also examined the prevalence of two types of bacteria resistant to drugs."

“Based on rates of all these complications, the hospitals identified by federal officials this week will lose 1 percent of all Medicare payments for a year — with that time frame beginning this past October.”

“AHRQ estimates there were 3.8 million hospital injuries last year, which translates to 115 injuries during every 1,000 patient hospital stays during that period. While the government did not release the dollar amount of the penalties, they will exceed a million dollars for many larger hospitals.”

“Each year, at least 2 million people become infected with bacteria that are resistant to antibiotics, including nearly a quarter million cases in hospitals. The Centers for Disease Control and Prevention estimates 23,000 people die from them."

“Infection experts fear that soon patients may face new strains of germs that are resistant to all existing antibiotics. Between 20 and 50 percent of all antibiotics prescribed in hospitals are either not needed or inappropriate, studies have found. Their proliferation — inside the hospital, in doctor’s prescriptions and in farm animals sold for food — have hastened new strains of bacteria that are resistant to many drugs.”

“Lisa McGiffert, who directs Consumers Union’s Safe Patient Project, said that as a result of Medicare’s penalties and other efforts, ‘more hospitals are thinking more about appropriate use of antibiotics.’ However, she said, ‘I think most hospitals do not have effective antibiotic stewardship programs yet."

“See Kaiser's full list of 769 hospitals hit with penalties here.

Source: Healthcare IT News

WBB Take: Although hospital quality overall showed improvements in 2016, CMS policing of improper claims and quality breaches has become more aggressive, and the quality improvements were not universal across all facilities. As a result, many hospitals have experienced increased CMS scrutiny with regard to sentinel events and quality and safety lapses. To reduce further exposure, hospitals can use monitoring & evaluation tools, and adopt robust quality assurance and process improvement methodologies. Increased focus on quality improvement has been shown to reduce waste and risk, and has resulted in improved patient outcomes.

Jerry Stefanko

Jerry Stefanko



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