Maryland Hospital Acquired Conditions (MHAC)

This initiative, which commenced July 1, 2009, links payments to hospital performance on a set of 50 Maryland Hospital Acquired Conditions (MHAC) across all-payers and patients in the State.  MHAC were derived from a list of 64 Potentially Preventable Complications (PPC) developed by 3M Health Information Systems and adapted by HSCRC.  PPC are complications that are unlikely to be a consequence of the natural progression of an underlying illness.  PPC are not present when the patient is first admitted and, thus, are associated with the care during the hospitalization.

Examples of these 50 categories of preventable complications include urinary tract Infection, septicemia (infection in the blood), and iatrogenic pneumothrax (collapsed lung).

During fiscal year 2008, these hospital-based preventable complications were present in approximately 53,000 of the State’s total 800,000 inpatient cases and represented approximately $500 million in potentially preventable hospital payments.

The MHAC methodology provides a system of payment incentives based on a hospital’s actual number of complications versus a statewide target rate for each of the 50 MHAC categories.  Under this approach, hospitals will face strong financial incentives to reduce complication rates.  They will also be armed with a sophisticated data analysis tool that will enable them to systematically help achieve this collective goal of reducing complications.

Key Features of the MHAC Initiative:

• The broad list of 50 PPC allows for hospitals to spread their risk more broadly.
• The initial of revenue “at risk” for FY 2010 (July 1, 2009 to June 30, 2010) will be determined in the Fall of 2009
• A technical payment workgroup meeting with industry representatives has been convened and will continue to work to discuss and negotiate the methodology for linking individual hospital performance on MHAC to financial incentives through the rate setting system.
• For the initial year, the normative expected standards uses data as calculated from experience during FY 2009.
• The Initiative uses an indexing method for calibrating and ranking relative hospital performance which compares the dollar impact of a presence (or absence) of a PPC – relative to the normative expected standard. 
• Rewards and penalties will be applied to the hospitals updated rates using a scaling methodology (subject to further discussion and review of the technical payment workgroup) on a revenue neutral basis beginning FY 2011 (July 1, 2010 to June 30, 2011) based.
• To finalize the list of 50 MHACs for the initial year, HSCRC convened several clinical vetting sessions of hospital industry and payer stakeholders, and will continue to provide mechanism on an ongoing basis to receive input and feedback from the industry and other stakeholders to refine and improve the MHAC/PPC codes and logic. 

For full details of the MHAC Initiative, click on the links below under Policy Papers, Press Releases, Quality Reports and Analyses.

Policy Papers, Press Releases, Quality Reports and Analyses

MHAC Work Group Meeting Materials