CMS Future HAC Plans? HAI Cost Impact on Hospitals?

Rick SitesGeneral Counsel & Senior Health

Policy DirectorOctober 1, 2008

Section 1996(d)(4)(D) of the Deficit Reduction Act of 2005

DRA required Medicare to identify HACs that are:

• High cost, high volume or both

• Assigned to a higher paying DRG when present as a secondary diagnosis

• Could reasonably have been prevented through application of evidence based guidelines

Lower Reimbursement for IPPS Hospitals Only

• Beginning October 1, 2008, Medicare will pay a case with an HAC as though the HAC did not occur (i.e., a lower DRG amount)

• Critical access, long-term acute care, rehab, psychiatric, cancer, and children’s hospitals are exempt at this time

DRA Criteria for HACs

• Medicare data must support the selected conditions are high cost and/or high volume

• Selected conditions must have a diagnosis that identifies the condition and results in higher payment as a secondary diagnosis

• Selected HACs must be reasonably preventable through application of evidence-based guidelines

Key HAC QuestionsCMS Must Answer

• Is there high cost, high volume per HAC?

• Does ICD-9 code clearly identify the HAC?

• Are there evidence-based guidelines?

• Is the HAC reasonably preventable?

10 Selected HACs

Selected HAC Medicare Data (2007)

Foreign Object post op 750 cases @ $68,631 per hospital stay

Air Embolism 57 cases @ $71,636/stay

Blood Incompatibility 24 cases @ $50,455/stay

Pressure Ulcer Stages III & IV 257,412 cases @ $43,180/stay

Falls and Trauma 193,566 cases @ $33,894/stay

10 Selected HACs-Continued

Catheter-Associated UTI 12,185 cases @ $44,043

Vascular Catheter-associated Infection 29,536 @ $103,027/stay

Surgical Site Infection after CABG, Bariatric Surgery, Orthopedic Procedures

375 cases @ $184,398/stay*

Poor Glycemic Control 14,929 cases @ $41,495/ stay*

Deep Vein Thrombosis/Pulmonary Embolism

4,250 cases @ $58,625/stay

73 FR 48434 at pp. 48473, 48490 *average from combining DRGs

Rejected HACs

Rejected HAC Medicare Date (2007)

Ventilator-Associated Pneumonia

30,867 cases @ $135,795/stay

Staphylococcus Aureus Septicemia

27,737 cases @ $84,976/stay

Clostridium Difficile-associated Disease

96,336 cases @ $59,153/stay

Legionnaires’ Disease 351 cases @ $86,014/stay

Iatrogenic Pneumothorax 22,665 cases @ $75,089/stay

MRSA 88,374 cases @ $32,049/stay

CMS Estimated Medicare Savings From 10 HACs

Federal Fiscal Year Medicare Savings

2009 $21 million

2010 $21 million

2011 $21 million

2012 $22 million

2013 $22 million

Additional Potential Candidate HACs

Surgical site infection following device procedures

Failure to rescue

Death or disability associated with drugs, devices, biologicals

Events on the NQF’s list of Serious Reportable Adverse Events

Dehydration

Malnutrition

Water-borne pathogens

What Does the Future Hold for More HACs?

• There are 258 sets of DRGs with subgroups based on complication or

comorbidity

What Does the Future Hold?

• CMS’s reduced payment for HACs has just begun– Submit comments to www.regulations.gov

• Medicaid and private insurers are or will follow the CMS lead

• As to CMS and Medicaid, participating in the rulemaking process especially by submitting meaningful comments is critical