Written By: Ashley Brady
The federal government has announced penalization for 764 poor-performing hospitals across the United States in February 2022 (1). This punishment by Medicare is implemented on the bottom 25% of performing hospitals in a given year, often for reporting the highest quantity of avoidable complications or infections. Paradoxically, 38 hospitals receiving these penalties have also been given perfect 5-star ratings by Medicare for quality of care (1). This contradiction by Medicare leaves many Americans questioning the quality of their local hospitals, especially those with perfect ratings.
Almost 800 hospitals are facing increased pressure and decreased Medicare funding due to underperforming in quality of care (2).
Medicare Quality of Care Rating System
The Quality of Care Rating System by Medicare is meant to demonstrate a hospital’s quality, through a variety of circumstances and quantifiable measurements. A rating that ranges from one to five stars is given to each hospital (3). As stated by Medicare, the quality of care rating is determined through five divisions; mortality, safety of care, readmission, patient experience, and timely and effective care.
Hospital ratings have existed for almost two decades in America, beginning with the establishment of the Hospital Quality Inpatient Reporting Program in 2003 (4). The Center of Medicaid and Medicare Services added the Quality of Care Star rating system in 2016 to further measure treatment qualities of hospitals (4). The rating system has not changed since it was established but is now facing scrutiny for the contradictory penalization of five-star hospitals.
The Penalization of 5-Star Hospitals
Penalties are inflicted as a result of reduced payments to hospitals by Medicare, through the Hospital-Acquired Condition (HAC) Reduction Program (5). The punishment given to the 764 hospitals identified by Medicare as poor-performing, 38 of which received five-star ratings, resulted from a 1% reduction in Medicare payments over the year (1).
While 2,046 hospitals have been penalized at least once in the past eight years since the HAC was established, five-star hospitals were penalized at the highest rates (1). In addition, approximately one-third of hospitals penalized in 2022 had not been penalized previously (1). The increase in hospital penalties, particularly five-star rated hospitals, raises questions about the validity of the Medicare rating system.
Critiques of the Hospital Rating System
Medicare’s Quality of Care star ratings has been criticized by many public health officials, including University of Michigan professor Ryan Smith, who called the system “a failure” (1). The system has been criticized for its lack of adjustment for hospitals in areas with high social risks, the act of punishing hospitals even if their quality has improved, and the pressure it puts on hospitals.
Research published in the Medical Care journal reveals that there is a reduction in hospital ratings for every 10% of residents located near a hospital that were eligible for both Medicare and Medicaid, unemployed, or lacked a high school diploma (6). In addition, the penalties given adds immense stress to hospitals that are already struggling with surges in COVID-19 patients, PPE costs, and staff shortages (1). The looming threat of penalties may even lead to hospitals unethically withholding accurate data of infections, readmissions, and patient injuries in order to avoid decreased funding (1).
How Can This System be Corrected?
The Medicare Quality of Care System is arguably due for improvement. One revision discussed by researchers is the use of risk assessment variables measured in neighborhoods surrounding hospitals (6). If hospitals are willing to care for patients in areas with high levels of violence and poor health, physicians argue that they should not be penalized for having higher-risk patients (6).
Another method to correct the Medicare rating system discussed by healthcare workers is implementing incentives for hospitals to improve their quality. Currently, hospitals are still penalized for being in the lower 25%, even if their quality has increased (1). Researchers argue that hospitals should receive a smaller deduction of Medicare funding, or no penalty at all if they have improved their quality of care in the last year (1).
References:
Rau, J. Health Care Paradox: Medicare penalizes dozens of hospitals it also gives five stars. Kaiser Health News. https://khn.org/news/article/health-care-paradox-medicare-penalizes-dozens-of-hospitals- it-also-gives-five-stars/amp/. Published February 8, 2022. Accessed February 25, 2022.
Blake, M. California Hospitals Buckle under Patient Surge, Sick Staff. Cal Matters. https://calmatters.org/newsletters/whatmatters/2022/01/california-hospitals-omicron/. Published January 12, 2021. Accessed February 26, 2022.
Overall Star Rating for Hospitals. Medicare. https://www.medicare.gov/care-compare/resources/hospital/overall-star-rating/. Accessed February 25, 2022.
Hospital-Acquired Condition Reduction Program Overview. Quality Net. https://qualitynet.cms.gov/inpatient/hac. Accessed February 24, 2022.
Lawton, E.J., Sheetz, K.H., Ryan, A.M. Improving the Hospital-Acquired Condition Reduction Program through Rulemaking. JAMA Health Forum. https://jamanetwork.com/journals/jama-health-forum/fullarticle/2766583. Published May 22, 2020. Accessed February 26, 2022.
Fahrenbach, J. Neighborhood Disadvantage and Hospital Quality Ratings in the Medicare Hospital Compare Program. Ovid. https://oce.ovid.com/article/00005650-202004000-00012/HTML. Published April 2020. Accessed February 26, 2022.
Hospital Compare. The Centers for Medicare & Medicaid Services. https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/HospitalCompare. Published December 1, 2021. Accessed March 2, 2022.
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