The region’s largest hospital system will pay a penalty over the next year for having high rates of infections or other patient-safety problems as part of a major effort by the federal government to reduce medical errors. Kaleida Health will see its Medicare payments reduced by about $1.7 million.
Wyoming County Community Health System in Warsaw, not owned by Kaleida, also is being penalized and will lose about $75,000.
The hospitals cited by the federal government say the penalties are based partly on outdated data and they have since made operational and quality-management changes to improve the care delivered to their patients.
“We are headed in the right direction,” Michael P. Hughes, a Kaleida Health spokesman, said in a statement Monday.
The two area institutions are among 724 nationwide, and 41 in New York State, penalized under the program. The penalties amount to 1 percent of a hospital’s Medicare revenue and take effect in the fiscal year that began in October and runs through September 2015.
They are meant to reduce preventable conditions that patients develop during a hospital stay, and advocates say they put needed pressure on hospitals to make that a priority – and to hold the institutions accountable if they don’t.
“It’s long overdue, and hopefully will result in the saving of lives,” said Mary Brennan-Taylor, a patient-safety advocate from Lockport whose mother died in 2009 from hospital-acquired infections.
The program to prevent infections in hospitals is a key provision of federal health care reform.
The 2010 Affordable Care Act required financial penalties, starting in the 2015 fiscal year, for hospitals that performed poorly in the assessment by the agency that oversees the Medicare program, the Centers for Medicare & Medicaid Services, or CMS.
The conditions reviewed by the Medicare agency cover two broad categories: first, blood infections caused by tubes inserted into patients to deliver fluids or medications and infections from catheters placed in bladders to remove urine; second, rates of eight complications such as bed sores, collapsed lungs, reopened surgical wounds and postoperative broken hips.
Using data that goes back to as far as 2011, Medicare assigned each hospital a score from 1 to 10. The government cut payments to any hospital with a score of higher than 7 – the 25 percent of all the hospitals that performed the worst.
The scores attempt to adjust for such risk factors as patient age, gender and severity of illness. In addition, many hospitals that provide specialized treatment are excluded from the calculation, including cancer centers and psychiatric facilities.
Still, hospital officials criticized aspects of the penalty program while stressing that patient safety is and should be a priority.
Among other things, they questioned how well the scoring adjusts for hospitals that take care of patients with more complex conditions, and whether those facilities that try hardest to identify and treat infections get penalized for their efforts.
“Every hospital wants to do well on these things and know how they are doing, but there is debate over the methodology,” said John Bartimole, president of the Western New York Healthcare Association, an advocacy organization.
The Medicare agency assessed 159 hospitals in New York and found 41, or 26 percent of the hospitals in the state, scored high enough to merit a penalty, according to a Buffalo News analysis of the Medicare data released last week. The average hospital-acquired condition, or HAC, score in New York was 5.8.
Medicare reviewed 18 hospitals and hospital systems in Western New York, with condition scores ranging from Kaleida Health, the highest at 8.7, to United Memorial Medical Center in Batavia, the lowest at 2.7.
United Memorial attributed its performance to a focused program that features the use of ultraviolet light to disinfect rooms, intensive staff training and a patient-centered, hand hygiene initiative. “At United Memorial we believe that infection prevention is the responsibility of all team members,” President Daniel Ireland said in an email.
Kaleida Health’s score was tied for ninth-highest among the 159 New York hospitals in the CMS database. The system reports clinical and financial information to the federal government as a whole and does not break out the data among its individual hospitals, which include Buffalo General Medical Center and Millard Fillmore Suburban Hospital.
Kaleida Health, in its most recent financial filing with the IRS, reported earning $174 million in total Medicare revenue in 2013; a 1 percent reduction would cost the system $1.74 million. Hughes, the spokesman, declined Monday to provide an updated financial impact.
In response to the Medicare condition score, Kaleida Health said it took several steps this year to improve conditions for patients. They include approving a new quality-improvement and patient-safety plan and hiring a systemwide chief medical officer, new chief medical officers for all of its hospitals and a new vice president for quality improvement.
“As an organization, we believe the move to transparency and growing availability of public data like this will contribute to improving quality of care for the patients that we serve, and assist the transformation of the health care delivery system that is already underway,” Hughes said.
The other area hospital with a score that earned a penalty for 2014-15 was the Wyoming County hospital, with a score of 8.
Hospital administrators say the score was based on a limited set of data from a three-year period ending in 2013, and the hospital was lauded by another organization, the New York State Partnership for Patients, for its efforts to reduce hospital-acquired conditions.
“We are continuously working to improve the quality of our patient services,” Donald Eichenauer, Wyoming County’s CEO, said in a statement. Eichenauer told The News the Medicare penalty is likely to cost the hospital $75,000.
Kaiser Health News estimated the penalties will total $373 million and disproportionately hit academic medical centers – hospitals where doctors learn a specialty – with half of them experiencing a cut in Medicare payments.
Some experts contend the methods for figuring the scores may be imperfect but are good enough and will improve over time.
“The way the system used to work is that if hospitals made mistakes, they made more money. They were reimbursed for the initial care and then for fixing the error. Now, the government is saying that it won’t reward bad care,” said Bruce Boissonnault, president of the Niagara Health Quality Coalition, which publishes an annual hospital report card.
Announcement of the penalties comes just a few weeks after the U.S. Department of Health and Human Services released a report showing an estimated 50,000 fewer patients died in hospitals, and about $12 billion in health care costs were saved, as a result of a reduction in hospital-acquired conditions from 2010 to 2013.
The agency attributed the progress, in part, to financial incentives in the health reform law to improve quality and patient safety.
Hospital patients experienced 1.3 million fewer hospital-acquired conditions from 2010 to 2013, a 17 percent decline over the three-year period, according to the report.
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