Becker's Clinical Quality & Infection Control

13 Sign up for the Free Becker's Clinical Quality & Infection Control E-Weekly at www.beckersasc.com/clinicalquality. A Revenue Leak Soon Turns to Flood: How Payment Penalties for High Infection Rates Could Drain Hospital Finances By Adam A. Boris, CEO, ICNet Systems  A s a host of new government payment penalties and reporting requirements take effect, preventing healthcare-associated infections is becoming a matter of financial survival for hospitals. HAIs put millions of dollars in revenue at risk, threaten hospital reputations and tax already limited infection prevention resources. Fiscal  year 2015 Infection reporting to NHSN 2%        $1 million Accounting for all of the Medicare payment reforms related to HAIs, as well as the costs of extended stays to treat infections, a hospital with $50 million in annual Medicare inpatient revenue would have a potential of $4.82 million in reimbursement at risk this year; that risk will grow to approximately $6.6 million by the fall of 2014 (see chart). Those figures do not take into account Medicaid and private payer actions, which are growing in intensity. Nor do they reflect the significant costs of litigation arising from infections.   Readmissions 3%   $1.5 million Bottom quartile of infections:  1%   $500,000 Value-Based Purchasing 1.5%      $750,000 Nonpayment for HAIs* NA  $20,000 Program % payment $ at risk at risk Total payment at risk:  $3,770,000 Cost of extended stay due to HAI**  $2,800,000 With 39 percent of hospitals running at a financial loss in 2011, even a small change to reimbursement rates can lead to huge changes in staffing models at hospitals and ultimately the quality of patient care they are able to provide, the American Hospital Association says. Total direct costs and penalties $6,577,000                                   * Based on total withhold in fiscal year 2012 divided by number of U.S. hospitals subject to payment penalties   HAIs cause longer lengths of stay and more intensive care, accounting for $40 billion in excess costs in 2009, according to the Centers for Disease Control and Prevention. For example, treating a central line-associated bloodstream infection adds an average of $36,441 to a hospital bill. All of these costs are absorbed by the hospital's operating budget, as most postinfection care will not be reimbursed. ** Assumes 10,000 admissions, 4 percent HAI rate and seven days of extended stay per HAI; internal cost of additional patient day assumed to be $1,000 As a result of these pressures, many senior leaders are looking at new ways of preventing infections, including screening new patients and adopting surgical checklists, stronger isolation precautions and electronic surveillance of potential infections. HAIs and Payment Penalty Calculator For a 250-bed hospital, with 2013 Medicare inpatient PPS reimbursement of $50 million Fiscal  year 2013 Program % payment $ at risk at risk Infection reporting to NHSN 2%       $1 million Value-Based Purchasing 1% $500,000 Readmissions    1%  $500,000 Nonpayment for HAIs* NA $20,000  Total payment at risk:     $2,020,000 Cost of extended stay due to HAI**    $2,800,000 Total direct costs and penalties   $4,820,000        A continuing threat The contagion in America's hospitals is far from being under control. In fact, emerging threats from multidrug-resistant organisms and continuing problems in controlling surgical site and catheter-related infections have, if anything, made the problem more dire. There is evidence that public reporting and payment reforms have had a positive, but limited, effect. A report issued by the CDC in early 2012 found that in 2010 healthcare facilities complying with mandatory infection data reporting to the CDC's National Healthcare Safety Network had 32 percent fewer central line-related infections, 6 percent fewer catheterrelated infections and 8 percent fewer surgical site infections than expected based on the case mix of patients and locations monitored.   "The mandatory reporting and in some cases public reporting of HAIs has seemed to elevate the importance of infection prevention in hospitals and often resulted in increased attention by the C-suite on the roles, responsibilities and data collected by infection preventionists and hospital epidemiologists," says Patricia W. Stone, a professor of health policy and director of the Center for Health Policy
 at Columbia University School of Nursing, who has written extensively on HAIs and reimbursement. Although there has been a reduction in those infections that have been systematically measured and reported, many common infections persist and are increasing in prominence. The reported infections, such as methicillinresistant Staphylococcus aureus and central line-related bloodstream infections, are but a small fraction of all infections that occur in a hospital each year. Norovirus, a pathogen that often causes food poisoning and gastroenteritis, is the fastest-growing infection and was responsible for nearly one in five infection outbreaks and 65 percent of unit closures in U.S. hospitals during a two-year period, according to a study published in the February 2012 issue of the American Journal of Infection Control.

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