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MLN Education Tool: Medicare Payment Systems

CMS alerted readers in the Thursday, March 3, 2022 edition of MLN Connects (link) that the MLN education tool Medicare Payment Systems has been updated to include 2022 regulation changes to payment, quality, and policy across several settings (i.e., acute care hospital, skilled nursing facility, and home health).

MLN Booklet: SBIRT Services Updated

Screening, Brief Intervention, and Referral to Treatment (SBIRT) is an evidence-based, early intervention approach for people with non-dependent substance use before they need more extensive or specialized treatment. CMS SBIRT Booklet MLN904084 (link) was recently updated to inform providers that beginning January 1, 2022, CMS covers Naloxone HCPCS Code G1028.

COVID-19 Updates

February 28, 2022: CMS COVID-19 FAQs on Medicare Fee-for-Service Billing Documented Updated

This CMS document (link) includes FAQs for providers and suppliers that bill Medicare (i.e., labs, hospitals, ambulance services, physician services) and was last updated on February 28, 2022. Specifically, on February 16th, CMS updated the answer to the following question:

• Question: The FDA has expanded the approved indication for the antiviral drug Veklury (remdesivir), and it is now authorized for the treatment of COVID-19 in certain adults and pediatric patients who are not hospitalized in addition to those that are hospitalized. How will CMS pay for remdesivir if it is administered in the outpatient setting?

March 3, 2022: Preliminary Medicare COVID-19 Data Snapshot

Medicare most recently updated their Preliminary Medicare COVID-19 Data Snapshot webpage (link) on March 3rd. The data snapshot reports COVID-19 cases and hospitalization data for Medicare beneficiaries diagnosed with COVID-19. Following are highlights from this data release:

• There have been 1,636,501 total Medicare COVID-19 hospitalizations,
• Of those hospitalized, most beneficiaries (38%) were discharged home. The other top three discharge dispositions include home health (17%), skilled nursing facility (17%), and expired (17%),
• The top five chronic conditions among hospitalized beneficiaries includes hypertension (81%), hyperlipidemia (65%), chronic kidney disease (58%), ischemic heart disease (49%) and diabetes (48%),
• Total Medicare Fee-for-Service payment to date for COVID-19 hospitalizations is $23.4B, and
• The average payment per beneficiary hospitalization with COVID-19 is $24,304.

March 10, 2022: MLN Matters Notice Revised Emergency Use Authorization (EUA) for EVUSHELD

CMS published the following information about a revised EUA for the COVID-19 monoclonal antibody cilgavimab (EVUSHELD) in the March 10, 2022, edition of MLN Matters (link):

“On February 24, the FDA revised the emergency use authorization for tixagevimab co-packaged with cilgavimab (EVUSHELD™) to change the initial dose for the authorized use as pre-exposure prophylaxis of COVID-19 in certain adults and pediatric patients. For more information about dosage and administration, including information about dosing for patients who got the original lower dose, review the fact sheet (ZIP) (link).

• Long Descriptor: Injection, tixagevimab and cilgavimab, for the pre-exposure prophylaxis only, for certain adults and pediatric individuals (12 years of age and older weighing at least 40kg) with no known sars-cov-2 exposure, who either have moderate to severely compromised immune systems or for whom vaccination with any available covid-19 vaccine is not recommended due to a history of severe adverse reaction to a covid-19 vaccine(s) and/or covid-19 vaccine component(s), 600 mg
• Short Descriptor: Tixagev and cilgav, 600mg

Visit the COVID-19 Monoclonal Antibodies webpage for more information (link). Note: you may need to refresh your browser if you recently visited this webpage.”

March 22, 2022: 2019-Novel Coronavirus (COVID-19) Medicare Provider Enrollment Relief Frequently Asked Questions (FAQs)

On March 23rd, CMS updated their COVID-19 Current Emergencies webpage (link) by adding a COVID-19 Medicare Provider Enrollment Relief FAQs document (link). The first question in this document answers the question of how CMS is using its 1135 blanket waiver authority to offer flexibilities with Medicare provider enrollment to support the COVID-19 national emergency.

Other Updates

March 16, 2022: Annual Civil Monetary Penalties Inflation Adjustment Published

The Office of the Assistant Secretary for Financial Resources, Department of Health and Human Services (HHS) published the Annual Civil Monetary Penalties Inflation Adjustment Final Rule (link) on March 17, 2022. Examples of actions that can come under a civil monetary penalty includes:

• Penalty for knowing of an overpayment and failing to report and return.
• Penalty for failure to grant timely access to HHS OIG for audits, investigations, evaluations, and other statutory functions of HHS OIG.
• Penalty for a Medicare Advantage organization that substantially fails to provide medically necessary, required items and services.
• Penalty for improper billing by Hospitals, Critical Access Hospitals, or Skilled Nursing Facilities.

March is National Professional Social Work Month. This year’s the National Association of Social Workers (NASW) is celebrating with the theme “The time is right for social work.” The NASW notes that “The time is always right for social work. However more people are entering the field because the life-affirming services that social workers provide are needed more than ever. This is especially true as our nation continues to grapple with the COVID-19 pandemic, systemic racism, economic inequality, global warming, and other crises.”

A few of the resources available on NASW’s website for your 2022 Social Work Campaign (link) include:

• A Social Work Month 2022 video.
• A quiz to assess how much you know about social work; and
• A document highlighting the theme and rationale for this year’s Social Work Month.

I want to acknowledge and thank all the wonderful social workers that I have worked with or who have been an invaluable resource in my own life when family members have been hospitalized.

The transition of care from a hospital to a post-acute setting can be a very stressful time. As MMP has done in years past, we are providing an updated list of resources to assist with discharge planning.

Resources for You:

• Medicare Costs at Glance for 2022 (link)
• MLN Booklet: Medicare and Medicaid Basics (link)
• MLN Educational Tool: Medicare Payment Systems (link)
• CMS National Training Program Module: 2021/2022 Getting Started with Medicare (link)

Resources for your patients

• Taking Care of Myself: A Guide for When I Leave the Hospital (link)
• Discharge Planning Protects You (link)
• Your Discharge Planning Checklist: For patients and their caregivers preparing to leave a hospital, nursing home, or other care setting (link)
• Your Guide to Medicare’s Durable Medical Equipment, Prosthetics, Orthotics, & Supplies (DMEPOS) Competitive Bidding Program (link)
• Your Medicare Benefits (link)
• Medicare Hospice Benefits (link)
• Medicare Appeals (link)

From all of us at MMP, Happy Social Work Month!

Question

Do you know when the COVID-19 Public Health Emergency (PHE) will end?

Answer

The COVID-19 PHE declaration was last renewed on January 14, 2022 with an effective date of January 16th (link). When the Secretary of the Department of Health and Human Services (HHS) makes a PHE declaration, it lasts for the duration of the PHE or 90 days but may be extended by the Secretary for as long as the PHE continues to exist. The most recent declaration is set to end April 16, 2022.

Further, in January 2021, acting HHS Secretary Norris Cochran sent a letter to governors across the country to share details about the COVID-19 PHE and indicated in the letter that HHS “has determined that the PHE will likely remain in place for the entirety of 2021, and when a decision is made to terminate the declaration or let it expire, HHS will provide states with 60 days’ notice prior to termination.”

Did You Know?

It has been over eight years since new discharge status codes (81 through 95) were finalized in the 2014 IPPS Final Rule (link).

The new codes were added to the GROUPER logic for MS-DRGs 280, 281, and 282 to identify those patients diagnosed with an acute myocardial infarction (AMI) who were discharged/transferred to another facility with a planned acute care hospital inpatient readmission alive. Following are pertinent comments from the 2014 final rule regarding these codes:

“The new discharge status codes related to a planned acute care hospital inpatient readmission were developed and approved by the National Uniform Billing Committee (NUBC) in response to a request by the provider community. The purpose of the new codes is to allow providers to track these types of situations when they occur. According to meeting notes from the NUBC, there is not a designated timeframe (or limitation) in reporting these new codes.”

“The planned readmission discharge status codes can also be reported for other MS-DRGs.”

“These new discharge status codes are not related in any way to the Hospital Readmission Reduction Program and will not be taken into account in the readmission measures for that program.”

You will find the discussion about the new codes on pages 50533 and 50534 of the 2014 IPPS Final Rule.

With these codes having been in place since October 1, 2013, I wanted to know if hospitals are using them? To find the answer, I turned to our sister company, RealTime Medicare Data (RTMD). Here is what the data revealed:

• In FY 2021, in the RTMD database, there were 7,898,214 Medicare Fee-for-Service acute inpatient hospital paid claims.
• Of those claims, 12,146 included one of the discharge status codes that includes a planned readmission.
• The top five discharge status codes with a planned readmission by volume were:
• 2,307 claims included discharge status code 81 (Discharged to home or self-care with a planned acute care hospital inpatient readmission),
• 2,185 claims included discharge status code 83 (Discharged/transferred to a skilled nursing facility (SNF) with Medicare certification with a planned acute care hospital inpatient readmission,
• 1,873 claims included discharge status code 90 (Discharged/transferred to an inpatient rehabilitation facility (IRF) including rehabilitation distinct part units of a hospital with a planned acute care hospital inpatient readmission,
• 1,602 claims included discharge status code 86 (Discharged/transferred to home under care of organized home health service organization with a planned acute care hospital inpatient readmission), and
• 1,437 claims included discharge status code 82 (Discharged/transferred to a short-term general hospital with a planned acute care hospital inpatient readmission.
• Top five states using discharge status codes with a planned readmission:
• Florida – 1,281 claims
• Texas – 1,140 claims
• Pennsylvania – 918 claims
• New York - 884 claims
• California – 760 claims
• Bottom five states using discharge status codes with a planned readmission:
• Arkansas – 13 claims
• Ohio – 7 claims
• Vermont – 5 claims
• Hawaii – 3 claims
• Hawaii – 3 claims

Why It Matters?

Assigning the correct discharge status code is important and can be costly if not correct.

The Comprehensive Error Rate Testing (CERT) A/B Medicare Administrative Contractor (MAC) Outreach & Education Task Force has published an education resource titled Patient Discharge Status Codes Matter (link). In this document, the CERT contractor notes they have issued errors related to the incorrect use of Discharge Status Codes that may result in an overpayment or underpayment of Medicare claims.

Incorrect discharge status codes can also cause an admitting facility to not be able to be paid due to the incorrect billing of the acute inpatient hospital.

What Can You Do?

A patient’s discharge disposition can change after the patient has already discharged from your hospital. The CERT contractor encourages hospitals “to follow-up with the patient after discharge and prior to submitting the claim to Medicare to ensure the patient went to the planned facility that was recorded in the medical record. This will prevent incorrect billing of the Discharge Status Code and avoid unnecessary adjustments to claims when the incorrect code is used.”

I encourage you to read the CERT Task Force document as well as the listed resources on this document to help prevent improper payments due to incorrect billing of discharge status codes.

Additional Resource:

MLN SE21001 Review of Hospital Compliance with Medicare’s Transfer Policy with the Resumption of Home Health Services & Other Information on Patient Discharge Status Codes (link)

MMP’s Protection Assessment Report (P.A.R.) combines current Medicare Fee-for-Service review targets (i.e., MAC, RAC, OIG) with hospital specific paid claims data made possible through a collaboration with RealTime Medicare Data (RTMD). Monthly, our newsletter spotlights current review activities. This month’s focus is on bariatric surgery.

Did You Know?

There has been a National Coverage Determination (NCD) for bariatric surgery (100.1) since 1979. Originally titled Gastric Bypass Surgery for Obesity, the NCD is now titled Bariatric Surgery for Treatment of Co-morbid Conditions Related to Morbid Obesity (link). This name change reflects the fact that treatment for obesity alone remains a non-covered indication for bariatric surgery.

Why Does This Matter?

Bariatric surgery has come under scrutiny by more than one review contractor, for example:

Supplemental Medical Review Contractor (SMRC): Strategic Health Solutions, the first SMRC contractor, completed a review of claims for bariatric service codes for dates of service from January 1, 2014, through December 31, 2014. In their review results, they cited a 35% error rate. The main reason for denials was due to insufficient documentation, for example: documentation did not include information supporting prior unsuccessful medical attempts at weight loss prior to surgical intervention.

Recovery Auditors (RACs): Complex medical reviews of inpatient and outpatient bariatric procedures has been an approved RAC Issue (link) since February 1, 2017.

Office of Inspector General (OIG): More recently, the Office of Inspector General published the report Hospitals Did Now Always Meet Differing Contractor Specifications for Bariatric Surgery (link). The OIG undertook this audit due to findings from a prior review of claims in 2015 and 2016 where they found claims did not fully meet a MAC’s eligibility specifications as well as the variance in eligibility specifications by different MACs. The audit included hospital inpatient claims for bariatric surgery performed from January 2017 through July 2018.

The OIG found thirty-two claims that met the NCD requirements, however the claims did not meet the MACs local specifications in their Local Coverage Determination (LCD) or Local Billing and Coding Article (LCA). Noridian had the most restrictive eligibility specifications in their LCA. The top specification not met was a lack of documentation indicating the beneficiary had participated in a weight management program. Novitas and First Coast had the least restrictive LCDs. The OIG estimated that “Medicare could have saved $47.8 million during our audit period if Medicare contractors had disallowed claims that did not meet Medicare national requirements or Medicare contractor specifications for bariatric surgery.”

OIG Audit Recommendations

Based on the audit findings, the OIG recommended that CMS:

• Determine if any of the MACs eligibility specifications in their LCDs or LCAs should be added to the NCD and if so, take steps to update the NCD,
• Work with the MACs to determine if any of the LCD or LCA eligibility specifications should be requirements rather than guidance, and
• If the NCD is updated, provide education to hospitals on the NCD requirements for bariatric surgery.

CMS Response

CMS did not agree with the OIGs recommendations. Two CMS responses were highlighted in the Report Brief:

• CMS will continue to monitor scientific evidence related to bariatric surgery and evaluate if an update to the NCD is needed, and
• “The Social Security Act does not mandate that LCDs be uniform across all jurisdictions and there are valid reasons that variations at the local Medicare contractor level is appropriate.”

What Can You Do?

If your hospital provides bariatric surgery services, I encourage you to read this OIG Report and perform a record review to ensure documentation supports the NCD requirements and when applicable your MAC LCDs and/or LCAs.

Collaboration is a process of working together to complete a task or achieve a goal.

For the Clinical Documentation Integrity Specialist, the goal of ensuring a patient’s story can be accurately reflected in codes (ICD-10-CM/PCS, HCPCS, CPT), requires collaborating with a team that can include physicians, nursing, dietitians, physical therapists, case managers, social workers, and coding professionals.

For the Case Manager, to ensure a patient’s story supports medical necessity of the services being provided and the patient has an appropriate discharge plan in place, this process, in addition to the above professions, requires open communication with the patient and his or her “people.”

Physicians must also collaborate with a team. In fact, CMS recently updated their MLN Fact Sheet: Collaborative Patient Care is a Provider Partnership (link). This Fact Sheet opens with the following guidance:

“As a physician, supplier, or other health care provider, you may need to collaborate with other providers when providing care to your Medicare patients. For example, you may:

• Write orders
• Make referrals
• Request health care services or items for your patient

It’s important to understand Medicare coverage criteria and documentation requirements that apply for those services or items. This helps to ensure:

• Quality care for your patient
• Accurate and timely processing and payment of:
• Your claims, and
• The claims of other providers or suppliers who provide services or items for your patient

Note: This fact sheet is limited to information and documentation you need to support medical necessity when you partner with other providers. Other coverage and payment rules may also apply.”

Medicare Coverage Criteria and Documentation Requirements

Title XVIII of the Social Security Act, Section 1862 (a)(1)(A) states “No payment may be made under Part A or Part B for expenses incurred for items or services which…are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member…”

At the national level, CMS publishes National Coverage Determinations (NCDs) and at the local level, Medicare Administrative Contractors (MACs) publish Local Coverage Determinations (LCDs) and Local Billing and Coding Articles (LCAs). Coverage documents provide guidance for when a service is covered or not covered, and include indications for coverage, limitations of coverage, documentation requirements and billing and coding guidance.

It is important to become familiar with where to find these documents (Medicare Coverage Database (link) and identify any NCDs, LCDs, and/or LCAs that apply to services that you provide. For example, at the national level, there is a NCD for Implantable Automatic Defibrillators (20.4) (link). In addition to the NCD, several MACs have published a related Billing and Coding article.

Ensuring the Story is Correct

Understanding Medicare coverage criteria and documentation requirements is important. So much so, CMS utilizes Contractors (i.e., Recovery Auditors, Supplemental Medical Review Contractor, and MACs) to audit claims.

CMS notes in the MLN Fact Sheet, “Medicare audits frequently show that provider-submitted documentation doesn’t provide enough information to establish medical necessity. To ensure proper claims processing and payment, you must follow documentation requirements and meet Medicare coverage criteria.”

They also underscore the importance of documenting everything needed to meet Medicare payment requirements when collaborating with other Providers. For example, let us once again focus on implantable automatic defibrillators and the Shared Decision Making (SDM) encounter requirement. The SDM encounter is:

• A requirement for all patients receiving a defibrillator for primary prevention,
• Must occur between the patient and a Physician or Non-Physician Practitioner (i.e., Physician Assistant, Nurse Practitioner, or Clinical Nurse Specialist),
• An Evidenced-Based Decision Tool must be used to ensure topics like patient health goals and preferences are discussed,
• The encounter must occur prior to the initial implantation, and
• The encounter may occur at a separate visit.

Given the timing of when the SDM encounter should occur, it is likely that this would be done in the Physician’s office. Therefore, the physician would need to include in documentation provided to the hospital that an SDM encounter had occurred and what tool had been used.

CMS advises that a providers documentation needs to be thorough and accurate to support the medical necessity of services provided and should:

• Provide a thorough picture of what happened during the patient’s visit, and
• Tell why services or items you ordered or gave are medically necessary.

I opened this article by noting that collaboration is a process of working together to complete a task or achieve a goal. I end this article by noting that a successful collaboration requires the physician to tell each patient’s story in a way that supports the medical necessity of services provided and allows for coding professionals to translate the story into code for accurate billing and payment of the claim.

Did You Know?

45 is the new 50 for colorectal cancer screening.

Why It Matters?

The U.S. Preventive Services Task Force’s indicated in their May 18, 2021 Final Recommendation statement for colorectal cancer screening that (link):

• It is estimated that 10.5% of new colorectal cancer cases occur in persons younger than 50 years,
• Incidence of colorectal cancer (specifically adenocarcinoma) in adults aged 40 to 49 years has increased by almost 15% from 2000-2002 to 2014-2016,
• In 2016, 25.6% of eligible adults in the US had never been screened for colorectal cancer, and
• In 2018, 31.2% were not up to date with screening.

What Can You Do?

There are five types of tests used to screen for colorectal cancer:

• Fecal occult blood test,
• Sigmoidoscopy,
• Colonoscopy,
• Virtual colonoscopy, and
• DNA stool test.

As a healthcare provider, be aware of Medicare’s colorectal screening coverage. According to the MLN Educational Tool Medicare Preventive Services (link), Medicare covers:

• Colorectal cancer screening using MT-sDNA and blood-based biomarker tests for patients with Medicare Part B who meet these criteria:
  • Aged 50-85 years,
  • Asymptomatic, and
  • At average risk of colorectal cancer risk.
• Screening colonoscopies, fecal occult blood tests (FOBTs), flexible sigmoidoscopies, and barium enemas for patients with Medicare Part B who meet at least one criterion:
• Aged 50 or older at normal colorectal cancer risk (there’s no minimum age requirement for screening colonoscopies), or
• Are at high colorectal cancer risk.

Also, Medicare has published a National Coverage Determination (NCD 210.3) Colorectal Cancer Screening Tests (link). The most current iteration of this NCD became effective on January 19, 2021, to include blood-based biomarker testing as an appropriate colorectal cancer screening test based on specific criteria.

My first screening colonoscopy was performed when I was 45 years old. During the procedure a pre-cancerous polyp was removed. As a healthcare consumer, I encourage everyone to talk with your doctor to discuss your risk for colorectal cancer and the need for screening tests.

Question

Our gastroenterologists rarely state if a patient’s personal history of colon polyps is adenomatous in nature or hyperplastic, or both. Typically, the documentation only reflects that the patient has a “history of colon polyps”. If the physician specifies the patient’s previous colon polyps as being hyperplastic, what ICD-10-CM diagnosis code should be assigned?

Answer

For a personal history of hyperplastic colon polyps, assign ICD-10-CM diagnosis code Z87.19 (personal history of other diseases of the digestive system).

Did You Know?

The advice from Coding Clinic, First Quarter 2021, page 12 advises that medications prescribed on a “PRN” or “as needed” basis are not considered to be long term drug therapy. This means that Z79, Long Term Drug Therapy would not be assigned for these medications.

Why It Matters?

Coding long term medication use for a drug that is given only on an “as needed” basis would be contradictory to the Z79 code description as it implies continuous use of a drug for an extended period of time.

What Can I Do?

Review Coding Clinic, 1ST Quarter 2021, page 12. Read the medication list, determine the medications to be coded and then look to see how they are prescribed.

Coding Clinic, 1ST Quarter 2021, page 12.

The federal government has penalized 764 hospitals — including more than three dozen it simultaneously rates as among the best in the country — for having the highest numbers of patient infections and potentially avoidable complications.

The penalties — a 1% reduction in Medicare payments over 12 months — are based on the experiences of Medicare patients discharged from the hospital between July 2018 and the end of 2019, before the pandemic began in earnest. The punishments, which the Affordable Care Act requires be assessed on the worst-performing 25% of general hospitals each year, are intended to make hospitals focus on reducing bedsores, hip fractures, blood clots, and the cohort of infections that before covid-19 were the biggest scourges in hospitals. Those include surgical infections, urinary tract infections from catheters, and antibiotic-resistant germs like MRSA.

This year’s list of penalized hospitals includes Cedars-Sinai Medical Center in Los Angeles; Northwestern Memorial Hospital in Chicago; a Cleveland Clinic hospital in Avon, Ohio; a Mayo Clinic hospital in Red Wing, Minnesota; and a Mayo hospital in Phoenix. Paradoxically, all those hospitals have five stars, the best rating, on Medicare’s Care Compare website.

Eight years into the Hospital-Acquired Condition Reduction Program, 2,046 hospitals have been penalized at least once, a KHN analysis shows. But researchers have found little evidence that the penalties are getting hospitals to improve their efforts to avert bedsores, falls, infections, and other accidents.

“Unfortunately, pretty much in every regard, the program has been a failure,” said Andrew Ryan, a professor of health care management at the University of Michigan’s School of Public Health, who has published extensively on the program.

“It’s very hard to capture patient safety with the surveillance methods we currently have,” he said. One problem, he added, is “you’re kind of asking hospitals to call out events that are going to have them lose money, so the incentives are really messed up for hospitals to fully disclose” patient injuries. Academic medical centers say the reason nearly half of them are penalized each year is that they are more diligent in finding and reporting infections.

Another issue raised by researchers and the hospital industry is that under the law, the Centers for Medicare & Medicaid Services each year must punish the quarter of general care hospitals with the highest rates of patient safety issues even if they have improved and even if their infection and complication rates are only infinitesimally different from those of some non-penalized hospitals.

In a statement, CMS noted it had limited ability to alter the program. “CMS is committed to ensuring safety and quality of care for hospital patients through a variety of initiatives,” CMS said. “Much of how the Hospital-Acquired Condition (HAC) Reduction Program is structured, including penalty amounts, is determined by law.”

In allotting the penalties, CMS evaluated 3,124 general acute hospitals. Exempted from the evaluation are around 2,000 hospitals. Many of those are critical access hospitals, which are the only hospitals serving a geographic — often rural — area. The law also excuses hospitals that focus on rehabilitation, long-term care, children, psychiatry, or veterans. And Maryland hospitals are excluded because the state has a different method for paying its hospitals for Medicare patients.

For the penalized hospitals, Medicare payments are reduced by 1% for each bill from October 2021 through September 2022. The total amount of the penalties is determined by how much each hospital bills Medicare.

A third of the hospitals penalized in the list released this year had not been punished in the previous year. Some, like UC Davis Medical Center in California, have gone in and out of the penalty box over the program’s eight years. Davis has been penalized four years and not punished four years.

“UC Davis Medical Center is usually within a few points of the [Hospital-Acquired Condition Reduction Program] threshold, so it’s not unusual to move in and out of the program year to year,” UC Davis Health said in an email. It said Davis ranked 38th out of 101 academic medical centers that use a private quality measurement system.

The Cleveland Clinic said that its satellite hospital in Avon has received awards from private groups, such as an “A” grade for patient safety from the nonprofit Leapfrog Group. Both it and Cedars-Sinai touted their five-star ratings. In addition, Cedars said that overall assessment comes even though the hospital deals with large numbers of very sick patients. “This [star] rating is particularly meaningful because of the complexity of the care that many of our patients require,” Cedars said in a statement.

Other hospitals declined to comment or did not respond to emails.

The KHN analysis found that the government penalized 38 of the 404 hospitals that were both included in the hospital-acquired conditions evaluation and had received five stars for “overall quality,” which CMS calculates using dozens of metrics. Those include not just infection and complication rates but also death rates, readmission frequencies, ratings that patients give the hospital after discharge, and hospitals’ consistency in following basic protocols in a timely manner, such as giving patients medicine to break up blood clots in the 30 minutes after they display symptoms of potential heart attacks.

In addition, 138 of 814 hospitals with the next-highest rating of four stars were docked by the program, KHN found.

Lower-rated hospitals were penalized with a higher frequency: Although just 9% of five-star hospitals were punished, 67% of one-star hospitals were.

KHN’s analysis found major discrepancies between the list of penalized hospitals and how Medicare’s Care Compare rated them for virtually the same patient safety infection rates and conditions. On the Medicare site, two-thirds of the penalized hospitals are rated as “no different than average” or “better than average” for the public safety measures CMS uses in assigning star ratings. The major differences center on the time frames for those measures and the structure of the penalty program. The Medicare website, for instance, evaluated only one year of infection rates, rather than the 18 months’ worth that the penalty program examined. And the public ratings are more forgiving than the penalties: Care Compare rates each hospital’s patient safety metric as average unless it’s significantly higher or lower than the scores of most hospitals, while the penalty program always punishes the lowest quartile.

Nancy Foster, the vice president for quality and patient safety at the American Hospital Association, said the penalties would cause more stress to hospitals already struggling to handle the influx of covid patients, staffing shortages, and the extra costs of personal protective equipment. “It is demoralizing to the staff when they see their hospital is deemed unsafe or less safe than other hospitals,” she said.

Dr. Karen Joynt Maddox, co-director of the Center for Health Economics and Policy at Washington University in St. Louis, said it was time for Congress and CMS to reevaluate the penalty program. “When this program had started, the thought was that we would get to zero” avoidable complications, she said, “and that hasn’t proven to be the case despite a really good effort on the part of some of these hospitals.”

She said the hospital-acquired conditions penalty program, along with other quality-improvement programs created by the ACA, feels “very ready for a refresh.”

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