CMS Issues FY 2016 Results for Hospital-Acquired Conditions Reduction Program.

Date posted: December 31, 2015

The Centers for Medicare & Medicaid Services (CMS) recently released the fiscal year (FY) 2016 results for its Hospital-Acquired Conditions (HAC) Reduction Program.  The Affordable Care Act established the HAC Reduction Program payment adjustment to provide an incentive for hospitals to reduce HACs.  The HAC Reduction Program requires the Department of Health and Human Services (HHS) Secretary to adjust Medicare payments to hospitals in the worst performing quartile for HAC quality measures.  In 2015, CMS began reducing the worst performing hospitals’ payments to 99 percent of the original Medicare amount paid for discharges.

Results of the FY 2016 HAC Reduction Program include:

  • In FY 2015, 724 out of 3,308 HAC Reduction Program hospitals had a payment reduction applied to all Medicare discharges;
  • For FY 2016, 758 hospitals will face a 1 percent payment reduction for  all Medicare discharges occurring between October 1, 2015 and September 30, 2016;
  • Between FYs 2015 and 2016, CMS decreased the 75th percentile HAC Score cutoff from 7.00 to 6.75, causing an increase in the percentage of hospitals in the worst performing quartile;
  • Approximately 53.7 percent of hospitals in the FY 2015 worst performing quartile are also in the FY 2016 worst performing quartile;
  • Eligible hospitals’ average performance improved on two of the three measures included in both program years (patient safety and bloodstream infections); and
  • CMS expects to save $364 million in FY 2016 as a result of the HAC Reduction Program.

The CMS fact sheet is available at:

The list of HAC Reduction Program scores for hospitals is available at:

Centers for Medicare & Medicaid Services.  “Fiscal Year (FY) 2016 Results for the CMS Hospital-Acquired Conditions (HAC) Reduction Program.”  Fact Sheet.  10 Dec. 2015.

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