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Quality Improvement | Process Measures (QBR)

Complications: Maryland Hospital Acquired Conditions (MHAC)


This initiative, which commenced July 1, 2009, links payments to hospital performance on a set of 49 Maryland Hospital Acquired Conditions (MHACs) across all-payers and patients in the State. MHACs were derived from a list of 64 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. PPC 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, septicemia (infection in the blood), and iatrogenic pneumothrax (collapsed lung).

During fiscal year 2008, 49 MHACs were included in the program and these 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. From FY 2009 to FY 2010, we saw a 12% decrease in measured complication rates with associated costs of $62M. This may, in part, be attributable to hospital coding changes in addition to the rewards and penalties that were applied to hospital payment rates.

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 MHAC Initiative:

  • The broad list of PPC allows for hospitals to spread their risk more broadly.
  • Rewards and penalties are applied using a scaling methodology on a revenue neutral basis beginning FY 2011.
  • The initial of maximum scaled amount for FY 2010 was 0.5% of the update factor in FY 2010.
  • For FY2012, the maximum scaled amount was 1% of the hospital inpatient revenue, which resulted in a total of $13.3 million.
  • For each measurement year, the normative expected standards uses data as calculated from experience during the prior fiscal year.
  • 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.
  • 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.

Policy Papers and Press Releases

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.