“Value-based purchasing” is a quality improvement strategy explicitly linking payment with healthcare outcomes by paying more for better healthcare, and less for inferior care. Value-based purchasing could improve the quality of hospital care while also lowering health care costs. In many ways, the current hospital payment system is the antithesis of value-based purchasing because hospitals can receive additional payments when patients develop complications during their stay, including hospital-acquired infection. One approach is to hold hospitals financially accountable for not preventing complications. This strategy underlies the hospital payment rule change, implemented by CMS as the “Hospital-Acquired Conditions Initiative,” in which CMS will no longer pay hospitals extra when patients develop specific complications after admission (see ) (4
Table 2 Hospital-acquired conditions not eligible for additional payment (4, 25, 29-31)
The Deficit Reduction Act of 2005 (Section 5001c) mandated CMS to choose at least 2 hospital-acquired complications that meet 3 criteria:
- high cost or high volume or both;
- result in the assignment of the case to a diagnosis-related group that has a higher payment when present as a secondary diagnosis; and
- could reasonably have been prevented through the application of evidence-based guidelines.
For discharges occurring on or after October 1, 2008, hospitals paid by the Inpatient Prospective Payment System will not receive additional payment for the following conditions when acquired during hospitalization: catheter-associated urinary tract infection, decubitus ulcer, vascular-catheter associated infection, serious preventable events (such as blood incompatibility), injury due fall or trauma, serious glycemic control states, and specific post-operative infections and venous thromboembolic conditions (detailed in ).
This initiative has two main components: 1) mandated use of a code called a “present-on-admission indicator” that indicates whether each diagnosis occurred prior to or after hospital admission, and 2) a payment change, mandating that specific hospital-acquired conditions no longer warrant increased hospital payment (). The expected consequence of this policy is simple: with no potential for extra payment to compensate for care of hospital-acquired complications, hospitals will vigorously pursue strategies to prevent such complications. However, the details required for policy implementation are complex, and there is potential for the policy's impact on hospital payment to be negligible if the data used to identify complications are inaccurate. With this in mind, we review the details necessary to understand the CMS policy implementation with regard to catheter-associated urinary tract infection.
The present-on-admission indicator reporting requirement necessitates that for all diagnoses documented for payment generation (via the established diagnosis-related group-based Prospective Payment System) (32
), hospitals must indicate whether the diagnosis was present-on-admission, or if it occurred after admission by using the new code called the present-on-admission indicator. The present-on-admission indicator can be coded as Y (condition was present-at-admission), N (hospital-acquired), W (provider has determined by data and clinical judgment that it is not possible to document when the onset of the condition occurred), or U (insufficient documentation to determine if condition was present-on-admission); CMS will be monitoring and analyzing whether these codes are being used appropriately. Present-on-admission is defined as “present at the time the order for inpatient admission occurs.” As such, “conditions that develop during an outpatient encounter, including emergency department, observation, or outpatient surgery,” are considered present-on-admission. The present-on-admission status of a diagnosis is assigned by hospital coders, who have been given general instructions in the Appendix of the ICD-9-CM Official Guidelines for Coding and reporting (33
). Coders are instructed to assign a condition as “present-on-admission” if it is (a) explicitly documented by the provider as present-on-admission, (b) a chronic condition diagnosed prior to admission (such as asthma), or (c) a condition “clearly present-on-admission” but not diagnosed until after admission occurred, such as a diagnosis suspected at admission due to symptoms but confirmed sometime later.
Although instructions provided to hospital coders include a few general examples for how to apply the present-on-admission indicator, specific instructions or examples have not been provided regarding catheter-associated urinary tract infection. Coders are dependent upon accurate and complete documentation from physicians and physician extenders (e.g., physician assistants) regarding whether a urinary tract infection was catheter-associated or not. Coders are instructed only to use physician and physician extender documentation to determine diagnoses for requesting payment for care provided. If physician documentation is unclear whether a condition was present-on-admission, the coder is advised to query the physician for clarification, and the physician is expected to update the medical record. This is likely to be burdensome for both the coder and the clinician.
The new CMS policy contains very detailed criteria for how specific hospital-acquired complications are to be identified by ICD-9-CM codes. Some conditions (including catheter-associated urinary tract infection) will require coders to choose multiple codes to identify a complication for which additional payment should not be provided. As detailed in , requesting payment for a urinary tract infection will occur unless three pieces of information are correctly listed to identify the diagnosis:
- a urinary tract infection code (any one of 10 codes, outlined in );
- a present-on-admission indicator coded as “N” indicating the infection was not present-on-admission or “U” (hospital coder could not determine status at admission due to insufficient documentation), and
- the catheter-association code (996.64).
If any one of these three codes is omitted or coded inaccurately, the hospital could receive additional payment for the urinary tract infection as a co-morbidity by default.
Coding for a hospital-acquired catheter-associated urinary tract infection, resulting in outcomes of no extra payment (if corrected correctly) or potential extra payment by default (if coded incorrectly).*
Recent analyses suggest that not providing additional payment for hospital-acquired conditions could impact a significant portion of Medicare payments to hospitals ($800 million nationwide) (34
). The additional payment at stake can be substantial, as it is a proportion of the base payment the hospital would receive for an otherwise uncomplicated admission. Payment to a hospital is determined by multiplying the hospital base payment by the diagnosis's “relative weight,” which increases if the patient has complications or comorbidities. For example, a patient admitted to the University of Michigan with pneumonia will yield a payment of $6072 if uncomplicated, $8346 if complicated by a minor condition such as a simple catheter-associated urinary tract infection, and $11,891 if complicated by a major complication such as a renal abscess associated with a urinary catheter. Under the new rules, however, the hospital will receive payment of $6072 for the pneumonia admission without additional payment for treatment of hospital-acquired catheter-associated urinary tract infection. Thus, the amount of payment potentially lost per admission can be substantial.
Non-payment for hospital-acquired conditions in Medicare patients could decrease or increase healthcare costs. Ideally, healthcare costs overall should decrease if hospitals are able to reduce the number of hospital-acquired complications, decreasing costs incurred by hospitals and payers. Yet, healthcare costs could also increase. First, “defensive testing” in order to document bacteriuria as “present-on-admission” could lead to increased laboratory testing costs. Then, increased documentation of bacteriuria (even if asymptomatic) could result in more antibiotic use and antibiotic-related complications such as infection due to Clostridium difficile (which may also prolong the hospital stay and qualify for outlier payments). Second, there is potential for cost-shifting, if hospitals shift the uncompensated cost of Medicare patient care to other hospital chargers or non-Medicare payers.