Medicare’s Policy Not To Pay For Treating Hospital-Acquired Conditions: The Impact

In 2008 Medicare stopped reimbursing hospitals for treating eight avoidable hospital-acquired conditions. Using 2006 California data, we modeled the financial impact of this policy on six such conditions. Hospital-acquired conditions were present in 0. 11 percent of acute inpatient Medicare discharges; only 3 percent of these were affected by the policy. Payment reductions were negligible (0. 001 percent, or 0. 1 million-equivalent to 1. 1 million nationwide) and are unlikely to encourage providers to improve quality. Options to strengthen the incentives include further payment modifications for hospital-acquired conditions or expanding the hospital-acquired condition policy to exclude payment for consequences, additional procedures, and readmissions.