The US Medicare policy of not reimbursing hospital-acquired conditions: what impact would such a policy have in Victorian hospitals?

OBJECTIVE:

To model the effect of excluding payment for eight hospital-acquired conditions (HACs) on hospital payments in Victoria, Australia.

DESIGN, SETTING AND PARTICIPANTS:

Retrospective ecological study using the Victorian Admitted Episodes Dataset. The analysis involved all acute inpatient admissions to Victorian public and private hospitals between 1 July 2007 and 30 June 2008.

INTERVENTIONS:

Each admission record includes up to 40 diagnosis and procedure codes from which payments are calculated. The model deleted diagnosis codes for eight HACs from all records, then recalculated payments to estimate the impact of a policy of non-payment for HACs.

MAIN OUTCOME MEASURE:

The effect on hospital payments of excluding diagnosis codes for eight HACs.

RESULTS:

2,047,133 cases with total estimated payments of $4902 million were identified; 994 cases (0.05%) had one or more diagnoses meeting the code definition for a definable HAC, representing total payments of $24.1 million. In-hospital falls and pressure ulcers were the most commonly coded HACs. Applying a model that excluded HAC diagnosis codes changed the diagnosis-related group for 134 cases (13.5%), thereby generating a $448,630 reduction in payments.

CONCLUSIONS:

Introducing a non-payment for HACs policy similar to that introduced by Medicare in the United States would have little direct financial impact in the Australian context, although additional savings would accrue if HAC rates were reduced. Such a policy could add further incentive to current initiatives aimed at reducing HACs.