Hospitals can be punished even if they have improved over past years—and some have. At times, the difference in infection and complication rates between the hospitals that get punished and those that escape punishment is negligible, but the requirement to penalize one-quarter of hospitals is unbending under the law. Akin Demehin, director of policy at the American Hospital Association, said the penalties were “a game of chance” based on “badly flawed” measures.
Some hospitals insist they received penalties because they were more thorough than others in finding and reporting infections and other complications to the federal Centers for Medicare & Medicaid Services and the CDC.
“The all-or-none penalty is unlike any other in Medicare’s programs,” said Dr. Karl Bilimoria, vice president for quality at Northwestern Medicine, whose flagship Northwestern Memorial Hospital in Chicago was penalized this year. He said Northwestern takes the penalty seriously because of the amount of money at stake, “but, at the same time, we know that we will have some trouble with some of the measures because we do a really good job identifying” complications.
Other renowned hospitals penalized this year include Ronald Reagan UCLA Medical Center and Cedars-Sinai Medical Center in Los Angeles; UCSF Medical Center in San Francisco; Beth Israel Deaconess Medical Center and Tufts Medical Center in Boston; NewYork-Presbyterian Hospital in New York; UPMC Presbyterian Shadyside in Pittsburgh; and Vanderbilt University Medical Center in Nashville, Tennessee.
There were 2,430 hospitals not penalized because their patient complication rates were not among the top quarter. An additional 2,057 hospitals were automatically excluded from the program, either because they solely served children, veterans or psychiatric patients, or because they have special status as a “critical access hospital” for lack of nearby alternatives for people needing inpatient care.
The penalties were not distributed evenly across states, according to a KHN analysis of Medicare data that included all categories of hospitals. Half of Rhode Island’s hospitals were penalized, as were 30 percent of Nevada’s.
All of Delaware’s hospitals escaped punishment. Medicare excludes all Maryland hospitals from the program because it pays them through a different arrangement than in other states.
Over the course of the program, 1,978 hospitals have been penalized at least once, KHN’s analysis found. Of those, 1,360 hospitals have been punished multiple times and 77 hospitals have been penalized in all seven years, including UPMC Presbyterian Shadyside.
The Medicare Payment Advisory Commission, which reports to Congress, said in a 2019 report that “it is important to drive quality improvement by tying infection rates to payment.” But the commission criticized the program’s use of a “tournament” model comparing hospitals to one another. Instead, it recommended fixed targets that let hospitals know what is expected of them and that don’t artificially limit how many hospitals can succeed.
Although federal officials have altered other ACA-created penalty programs in response to hospital complaints and independent critiques—such as one focused on patient readmissions—they have not made substantial changes to this program because the key elements are embedded in the statute and would require a change by Congress.
Boston’s Beth Israel Deaconess said in a statement that “we employ a broad range of patient care quality efforts and use reports such as those from the Centers for Medicare & Medicaid Services to identify and address opportunities for improvement.”
UCSF Health said its hospital has made “significant improvements” since the period Medicare measured in assessing the penalty.
“UCSF Health believes that many of the measures listed in the report are meaningful to patients, and are also valid standards for health systems to improve upon,” the hospital-health system said in a statement to KHN. “Some of the categories, however, are not risk-adjusted, which results in misleading and inaccurate comparisons.”
Cedars-Sinai said the penalty program disproportionally punishes academic medical centers due to the “high acuity and complexity” of their patients, details that aren’t captured in the Medicare billing data.
“These claims data were not designed for this purpose and are typically not specific enough to reflect the nuances of complex clinical care,” the hospital said. “Cedars-Sinai continually tracks and monitors rates of complications and infections, and updates processes to improve the care we deliver to our patients.”