• Study
  • Published July 2018

Adverse effects of the Medicare PSI-90 hospital penalty system on revenue-neutral hospital-acquired conditions.

The Centers for Medicare and Medicaid Services (CMS) first implemented a policy of nonpayment for specific hospital-acquired conditions (HACs) in 2008. In 2014, they implemented a value-based purchasing program (the Hospital-Acquired Condition Reduction Program) that reduces reimbursement to hospitals with elevated rates of a range of HACs. The program measures HAC rates by a composite Patient Safety Indicator (PSI90), which includes 10 specific PSIs. This study examined HAC rates after implementation of the reimbursement penalty program at a cohort of academic medical centers. Overall, HAC rates declined over the 2 years following implementation of the program, with only rates of pressure ulcers increasing. Another recent study also found declines in HAC rates associated with CMS nonpayment initiatives, and data from AHRQ has also demonstrated significant reductions in HACs over the past 5 years. Nevertheless, concerns persist about the validity of using PSI for patient safety measurement over time, and other studies have found no effect of reimbursement policies on other HACs that are not included in PSI90 (such as specific health care–associated infections). A past PSNet perspective discussed the effect of pay-for-performance and other financial incentives for patient safety.

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