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Quality Improvement | Process Measures (QBR)

Complications: Maryland Hospital Acquired Conditions (MHAC)

Overview

This initiative, which commenced July 1, 2009 and was revised in 2014, links payments to hospital performance on a set of 65 Maryland Hospital Acquired Conditions (MHACs) across all-payers and patients in the State. MHACs are based on a list of 65 Potentially Preventable Complications (PPC) developed by 3M Health Information Systems based on their clinically appropriateness and significant cost implications when they occur. PPCs are complications that are unlikely to be a consequence of the natural progression of an underlying illness. PPCs are not present when the patient is first admitted and, thus, are associated with the care during the hospitalization.

Examples of PPCs include urinary tract Infection without a catheter, septicemia (infection in the blood), and iatrogenic pneumothrax (collapsed lung). For State fiscal year 2012 (July 1, 2011-June 30, 2012), there were ~58,000 PPCs in the state equivalent to ~$700M in hospital care costs.

The MHAC program provides the needed incentives to achieve hospital care improvements and meet the targets established in the Center for Medicare and Medicaid Innovation All-payer model demonstration contract that began on January 1, 2014, which include a reduction in PPC rates of 30% over the 5 year contract term as well as incremental annual reduction levels that support meeting the 5 year target.

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 selected MHAC categories. Under this approach, hospitals 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 Revised MHAC Initiative:

  • Measure hospital performance using Observed (O)/Expected (E) value for each PPC. Define the minimum threshold value to begin earning points as the weighted mean of all O/E ratios (O/E =1). Define the benchmark value where a full 10 points is earned as the weighted mean of top quartile O/E ratio. Establish appropriate exclusion rules to enhance measurement fairness and stability.

  • Set benchmark at zero for PPCs that are serious reportable events.

  • Prioritize PPCs that are high cost, high volume, have opportunity to improve, and are of national priority by tiering the PPCs in groups and weighting the groups in the final hospital score commensurate with the level of priority.

  • Establish tiered scaling based on state-wide MHAC performance and update annually based on the trends and CMMI contract goals.

  • Calculate rewards/penalties using preset positions on the scale based on the base year scores.

  • For CY 2014 performance year:
    1. Set minimum MHAC statewide target at 8% improvement with a maximum revenue at risk of 4% of permanent inpatient revenue if this target is missed.
    2. Set maximum revenue at risk at 1% of permanent inpatient revenue if CY 2014 target stated in 6.a. is met. Provide rewards to hospitals with more than 0.60 score up to 1% of permanent inpatient revenue provided sufficient funds are collected through penalties.
    3. Set a maximum state-wide total penalty limit at 0.5% of permanent inpatient revenue.

  • HSCRC continues 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.

Communications and Memos


Quality Reports and Analyses




MHAC Workgroup Meeting Documents

Please click here to email questions or inquiries about HSCRC’s Quality Improvement Initiatives or contact Dianne Feeney by telephone at 410-764-2605.

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