Two Triangle hospitals face Medicare penalties

jmurawski@newsobserver.comJuly 14, 2014 

  • How they scored

    As part of the Affordable Care Act, hospitals will be scored and penalized on patient infections and other complications. Preliminary scores issued by Medicare show 16 North Carolina hospitals could face potential penalties. The final list of penalized hospitals will be issued later this year. Scores 7 and below were above the 25th percentile and are not on the preliminary list of hospitals to be penalized. Here is how Triangle hospitals fared:

    WakeMed, Raleigh: 8.025

    UNC Hospitals: 7.375

    Duke University Hospital: 7

    WakeMed; Cary: 6.95

    Duke Regional Hospital: 4.6

    N.C. Specialty Hospital: 4

    Duke Health Raleigh Hospital: 3.275

    Rex Hospital: 2.975

    Johnston Memorial Hospital: 2

Two of the Triangle’s biggest hospitals, WakeMed in Raleigh and UNC Hospitals in Chapel Hill, face several million dollars in Affordable Care Act penalties because they have allowed too many infections and serious health complications in Medicare patients.

They are among 16 hospitals in North Carolina and 761 nationwide that Medicare authorities have tentatively flagged as the “worst performing hospitals” with regard to infections and complications. These hospitals nationwide could face a combined $330 million in penalties, unless they are able to reduce the problems this year.

The penalties represent the federal government’s toughest attempt to date to push down health care costs and improve medical care at U.S. facilities.

Rather than setting a minimum passing score, the penalty system will cut Medicare reimbursements by 1 percent to all hospitals with performance scores that fall in the bottom 25 percent, which means it will be impossible for hundreds of hospitals to avoid penalties.

“Because of the way the methodology is designed, there will always be a group that will lose financially and be penalized,” said Thomas Owens, chief medical officer of the Duke University Health System.

Like other provisions of the 2010 health care law, the penalties are controversial and have been the subject of complaints from the hospital industry. Many of the hospitals likely to see their Medicare reimbursements docked treat the sickest patients who are at greatest risk of infections, bed sores, blood clots, hip fractures, wounds, tears and other complications.

The hospitals most likely to face the 1 percent Medicare cut are academic teaching hospitals, large hospitals with more than 400 beds, and hospitals that disproportionately treat low-income patients, according to an analysis of the data by Kaiser Health News, a national health policy news service.

According to data issued by the N.C. Department of Health and Human Services, the two Triangle hospitals facing potential federal penalties have higher infection rates than the statewide average in intensive care units, largely because they treat sicker patients.

The federal rankings, issued in April and analyzed by Kaiser Health News last month, are preliminary and based on partial information so hospital administrators can get a sense of how their facilities are performing. The final penalties will go into effect in the 2015 fiscal year, and the list of penalized hospitals is likely to change.

The hospitals were scored on a 10-point system, with higher scores indicating higher rates of infections and complications, and have not yet received reports detailing how their scores were derived; the reports are expected to be provided to hospitals this month.

“We believe the metrics are not a valid measure of quality or safety,” said Brian Goldstein, executive vice president and chief operating officer of UNC Hospitals and a professor of medicine. “There is no evidence that this scoring system tells you anything about the quality of care in the hospital.”

The penalties for hospital-acquired conditions are the third and final punishment-and-reward mechanism in the Affordable Care Act to influence hospital performance. The other two fine hospitals for excessive patient readmission rates, and award bonuses and penalties for two dozen quality measures.

When all three penalty systems are in effect this fall, under-performing hospitals will be at risk of losing up to 5.4 percent of their Medicare payments, Kaiser Health News said.

WakeMed’s Raleigh campus received a provisional score of 8.095 on the hospital-acquired condition reduction program, while UNC Hospital got 7.375.

Scores 7 and below were above the 25th percentile and are not on the preliminary list of hospitals to be penalized.

WakeMed, with 575 beds at the Raleigh campus, is expected to receive $145 million in Medicare reimbursements in 2015, and faces a potential penalty of $1.45 million. UNC Hospitals in Chapel Hill, with 801 beds, faces a potential penalty of $1.57 million.

Duke University Hospital’s penalty would be $2.33 million if it faced penalties. But the 957-bed facility received 7 points in the preliminary ranking, squeezing just under the minimum penalty score and escaping penalties. But Owens, Duke’s chief medical officer, said the hospital received a score of 5.4, well below the penalty threshold. Medicare officials could not reconcile the discrepancy.

West Paul, WakeMed’s vice president of quality and patient safety, said WakeMed was dinged for central-line bloodstream infections in chronically ill patients who have compromised immune systems. Central lines are tubes inserted into large veins, usually in the neck or chest, to pump in nutritional fluids, chemotherapy, antibiotics or dialysis.

“They’ve been the biggest bugaboo to get down,” Paul said. “The best antibiotic in the world is no better than the worst immune system in the world.”

WakeMed is trying to bring down the infection rate by removing catheters as early as possible and by switching to more costly antiseptic-coated catheters, he said.

In addition to removing catheters as soon as possible, Rex Hospital in Raleigh uses an ultraviolet light system that disinfects all rooms with patients who are infected with germs that are resistant to multiple drugs and antibiotics. Rex also uses the disinfecting lights in operating rooms, intensive care units and other high-risk areas, said spokesman Alan Wolf.

Murawski: 919-829-8932

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