Owensboro Health Muhlenberg Community Hospital is one of 800 hospitals nationwide this fiscal year that will receive lower Medicare reimbursements as part of a federal pay-for-performance program that ties avoidable inpatient complications, such as post-operative blood clots, falls and infections, to federal payments.

The Centers for Medicare & Medicaid Services penalizes hospitals that rank in the bottom 25% for certain quality measures. Those facilities are docked 1% on inpatient payments as an incentive to improve.

See Medicare/Page A6

In 2014, CMS launched the Hospital-Acquired Condition Reduction Program as part of the Affordable Care Act. A slew of hospitals are exempted, such as critical care facilities, long-term care hospitals and children's hospitals.

The first reductions were announced in 2015. Since then, OHMCH made the HAC Reduction Program list four out of five times. The only year it was not penalized was 2017.

At OHMCH, the 1% reduction in Medicare reimbursements comes to about $50,000 a year, OH officials said. Since 2015, OHMCH has lost out on a total of about $200,000 in revenue because of the CMS program.

"Since our affiliation with Owensboro Health began over five years ago, Owensboro Health Muhlenberg Community Hospital has been working to establish a culture of quality and patient safety as the foundation for everything that we do," said Ed Heath, OHMCH chief operating officer. "From Day 1, our goal has been to provide the safest, most reliable health care possible to the people we serve, and I am very proud of the achievements we have made as a team."

The hospital excels at many quality benchmarks that CMS measures, such as central line-associated infections, Heath said. The Muhlenberg County hospital has not had a case since 2012.

"We have implemented a robust program called Target Zero, started at Owensboro Health in 2011 and added at OHMCH in 2016, which gives our team members the tools they need to improve the process of delivering health care," Heath added. "We have used this process to make important changes -- from patient identity verification to the way we clean the rooms."

Those programs are paying off, he said. Earlier this year, OHMCH earned a four-star designation from CMS.

According to Kaiser Health News, 19 hospitals in Kentucky will see reduced Medicare reimbursements this year, including University of Kentucky Hospital, Lexington; Jewish Hospital, Louisville; Norton Hospital, Louisville; and University of Louisville Hospital, Louisville. All of them have been penalized multiple times since the HAC Reduction Program started.

Owensboro Health Regional Hospital has never been penalized under the federal program.

OH's management agreement with Muhlenberg Community Hospital started in April 2014. A year later, the two entered into a lease that added the hospital to OH's system. Because of the lag between CMS findings and the notice of a reduction in Medicare payments, OH was managing the Muhlenberg hospital only two out of the four times it has been subject to penalties.

"For instance, (CMS) fiscal year 2018 calculations were based on metrics from two periods -- July 1, 2014 to Sept. 30, 2015, and Jan. 1, 2015, to Dec. 31, 2016," Heath said. "Therefore, much of (the) fiscal year 2018 data happened within the (OH) system's inaugural year as a management affiliate."

OHMCH is not the only hospital in the region that has dealt with the HAC Reduction Program. In 2017 and 2018, Deaconess Hospital in Evansville saw reduced Medicare payments. This year, The Heart Hospital at Deaconess Gateway in Newburgh was one of the 800 listed. It was the Heart Hospital's first time on the list.

St. Vincent in Evansville appeared on the list in 2016 and 2018.

"Deaconess receives national recognition as a provider of high-quality, safe, patient-centered care, and many of our strategic goals are tied to quality and outcomes," said Becca Scott, marketing and internal communication specialist. "We are pleased that in 2019 we did not receive the HAC reduction. There are numerous publicly reported programs related to health care quality, and we monitor these reports carefully to watch for trends and opportunities for continuous improvement."

In October 2017, an American Hospital Association statement said the association supports pay-for-performance programs, but it alleged the HAC Reduction Program was flawed.

The AHA said the federal program's quality measures are inaccurate, it fails to take into account improvements hospitals have made in the past, and it unfairly targets some facilities, such as teaching hospitals and very large and small facilities.

"The HAC Reduction Program needs reform to more effectively promote improvement," an AHA statement said. "The program also needs better measures that accurately reflect performance on important issues."

Kathy Myer, OHMCH vice president of patient care services and chief nursing officer, shared one of the flaws small hospitals face.

"For instance, it only takes a handful of cases for a small hospital to fall below the penalty threshold -- as few as three in a year, in some cases," Myer said. "(Clostridium difficile) is a bacterium that occurs in the natural environment and can be carried by people without them knowing it. If identified while in the hospital, it is assumed to be a hospital-acquired condition and we are penalized."

The hospital has increased its gastrointestinal screening and testing procedures for admitted patients in an effort to identify the bacteria earlier, and OHMCH administers probiotics more often to promote healthy bacteria in its patients, Myer said.

The last clostridium difficile case was recorded at the Muhlenberg County hospital in July 2018. The CMS tracking period is for two years; therefore, it takes time to eliminate a penalty.

OHMCH officials are optimistic the next report, which is expected in July, will result in no penalties. "But there are no guarantees, given the complexity of the calculations and the challenges rural hospitals face," Heath said.

Even one infection can merit a penalty for hospitals with lower admissions, he said.

The Advisory Board, a worldwide consulting firm for health care organizations, sides with the AHA. For example, the Advisory Board wrote in a March 4 press release that the federal program uses an arbitrary cutoff for its metrics.

"The American Hospital Association published an analysis last year that only 41% of the 768 hospitals penalized in 2017 had HAC rates significantly higher than the hospitals which were not penalized," the Advisory Board release said. "The industry has also argued the methodology punishes hospitals that thoroughly test for infections and other patient safety hazards as they may uncover more problems and appear statistically worse than others with lower testing standards."

Greg Strahan, OH president and CEO, said he is proud of the progress OHMCH has made during the past few years and is optimistic about the Muhlenberg County hospital's future.

"We have invested heavily in technology, infrastructure and the development of our team," Strahan said, "and there is a sense of pride and momentum at OHMCH. We are meeting every challenge and making health care better in Muhlenberg County.

"OHMCH has made tremendous strides in quality and patient safety. Along with the support of the Owensboro Health system, we have demonstrated an outstanding track record of quality care for our region and have laid the building blocks for a great future ahead."

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