Impact of Repeated Reimbursement Penalties on Hospital Total Quality Scores

The incidence of hospital-acquired conditions (HACs) is a serious public health issue with implications ranging from patient morbidity and mortality to negative financial impacts on patients and health care systems. Despite substantial efforts to address and reduce HACs, research into the effect of quality improvement programs is inconclusive. This study seeks to better understand the relationship between repeated reimbursement penalties and improvement in HAC quality scores.

A quantitative comparative analysis of U.S. health care data was conducted. Data on quality outcomes and hospital characteristics were sourced from the Hospital-Acquired Condition Reduction Program from fiscal years 2018 and 2019 and the Centers for Medicare & Medicaid Services Inpatient Prospective Payment System impact files, respectively.

In total, 3123 U.S. hospitals were analyzed to compare differences between total HAC scores of hospitals with and without penalties in consecutive years. Hospitals with repeated penalties had significantly greater improvement in scores ( t497.262 = -13.00, P < 0.001), and the impact was greatest in small hospitals (<100 beds). Repeated penalties had a smaller impact on disproportionate share hospitals (Cohen d = 0.73). Among all hospitals, the effect of repeated penalties was large (Cohen d = 0.75).

This study suggests that repeated penalties can improve quality scores in U.S. hospitals. However, the effect may be exaggerated for smaller hospitals and those that serve patient populations with a relatively higher socioeconomic status. The reason disproportionate share hospitals did not show as much improvement as nondisproportionate hospitals may be because hospitals serving vulnerable populations often have fewer resources.