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Journal Article


Enhancing Medicare's Hospital-Acquired Conditions Policy to Encompass Readmissions

The Issue

To avoid paying hospitals for their treatment of preventable complications of care, Medicare does not allow reimbursement for 10 hospital-acquired conditions (HACs) that arise from and are identified within a single patient admission. The policy, however, does not restrict payments for HACs that become apparent after discharge and result in hospital readmissions. To determine the financial impact of restricting payment for readmissions, Commonwealth Fund–supported researchers assessed the frequency of readmissions to California hospitals that could be tied to avoidable complications.

What the Study Found

More than 90 percent of the cost of HAC-related readmissions stemmed from complications of coronary artery bypass grafts, infections following orthopedic surgery, and fall-related injuries. Expanding Medicare's policy to include nonpayment for these HAC-related readmissions and others would save the program $103 million per year, more than twice the amount it now saves by limiting nonpayment for the treatment of HACs identified in the index admission.  


Current Medicare policy underestimates the financial impact of HACs by not taking into account those that become apparent after hospital discharge and result in a readmission. Expanding Medicare's nonpayment policy to the most frequent HAC-related readmissions—orthopedic infections, complications of coronary artery bypass grafts, and fall-related injuries—or to all HAC-related readmissions, would create additional incentive for hospitals to prevent HACs.

Publication Details



P. D. McNair and H. S. Luft, "Enhancing Medicare's Hospital-Acquired Conditions Policy to Encompass Readmissions," Medicare & Medicaid Research Review, 2012 2(2):E1–E15.