Hospital Characteristics Associated With Penalties in the Centers for Medicare & Medicaid Services Hospital-Acquired Condition Reduction Program

IMPORTANCE: In fiscal year (FY) 2015, the Centers for Medicare & Medicaid Services (CMS) instituted the Hospital-Acquired Condition (HAC) Reduction Program, which reduces payments to the lowest-performing hospitals. However, it is uncertain whether this program accurately measures quality and fairly penalizes hospitals. OBJECTIVE: To examine the characteristics of hospitals penalized by the HAC Reduction Program and to evaluate the association of a summary score of hospital characteristics related to quality with penalization in the HAC program. DESIGN, SETTING, AND PARTICIPANTS: Data for hospitals participating in the FY2015 HAC Reduction Program were obtained from CMS’ Hospital Compare and merged with the 2014 American Hospital Association Annual Survey and FY2015 Medicare Impact File. Logistic regression models were developed to examine the association between hospital characteristics and HAC program penalization. An 8-point hospital quality summary score was created using hospital characteristics related to volume, accreditations, and offering of advanced care services. The relationship between the hospital quality summary score and HAC program penalization was examined. Publicly reported process-of-care and outcome measures were examined from 4 clinical areas (surgery, acute myocardial infarction, heart failure, pneumonia), and their association with the hospital quality summary score was evaluated. EXPOSURES: Penalization in the HAC Reduction Program. MAIN OUTCOMES AND MEASURES: Hospital characteristics associated with penalization. RESULTS: Of the 3284 hospitals participating in the HAC program, 721 (22.0%) were penalized. Hospitals were more likely to be penalized if they were accredited by the Joint Commission (24.0% accredited, 14.4% not accredited; odds ratio [OR], 1.33; 95% CI, 1.04-1.70); they were major teaching hospitals (42.3%; OR, 1.58; 95% CI, 1.09-2.29) or very major teaching hospitals (62.2%; OR, 2.61; 95% CI, 1.55-4.39; vs nonteaching hospitals, 17.0%); they cared for more complex patient populations based on case mix index (quartile 4 vs quartile 1: 32.8% vs 12.1%; OR, 1.98; 95% CI, 1.44-2.71); or they were safety-net hospitals vs non–safety-net hospitals (28.3% vs 19.9%; OR, 1.36; 95% CI, 1.11-1.68). Hospitals with higher hospital quality summary scores had significantly better performance on 9 of 10 publicly reported process and outcomes measures compared with hospitals that had lower quality scores (all P ≤ .01 for trend). However,