HAC Coding Impacts Hospital Financial Performance

HAC coding impacts hospital financial performance.

Hospital-acquired conditions (HACs) have been reported on hospital claims since FY 2008. Payments to hospitals ranking in the lowest-performing quartile were adjusted by 1-percent reductions beginning Oct. 1, 2014. This program is known as the Hospital-Acquired Conditions Reduction Program, and it is part of value-based purchasing.

For FY 2019, the 75th-percentile total HAC score cutoff was 0.3429. The cutoff for FY 2018 was 0.3712. From 2014 through 2018, the decrease represented a 13 percent improvement. This change signifies a difference of 99 patients out of 1,000 in 2014 to 86 patients out of 1,000 in 2018.  

The HAC Reduction Program information is reported for each hospital on Hospital Compare. The aforementioned significant improvement has saved $7.7 billion in Medicare payments.

The HAC Reduction Program leverages Domain 1 and Domain 2 scores. Domain 1 includes the Centers for Medicare & Medicaid Services (CMS) Patient Safety Indicators (PSIs) 90. For FY 2019, the calculations are based on the 21-month performance period of Oct. 1, 2015-June 30, 2017, which includes only ICD-10-CM data. PSI 90 includes:

  1. PSI 03 – Pressure Ulcer Rate
  2. PSI 06 – Iatrogenic Pneumothorax Rate
  3. PSI 08 – In Hospital with Hip Fracture Rate
  4. PSI 09 – Peri-operative Hemorrhage or Hematoma Rate
  5. PSI 10 – Postoperative Acute Kidney Injury Requiring Dialysis Rate
  6. PSI 11 – Postoperative Respiratory Failure Rate
  7. PSI 12 – Peri-operative Pulmonary Embolism or Deep Venous Thrombosis Rate
  8. PSI 13 – Postoperative Sepsis Rate
  9. PSI 14 – Postoperative Wound Dehiscence Rate
  10. PSI 15 – Unrecognized Abdominopelvic Accidental Puncture/Laceration Rate

Domain 2 focuses on infections using the Centers for Disease Control and Prevention (CDC) chart abstract and lab surveillance data from the National Healthcare Safety Network (NHSN). It encompasses data on discharges taking place from Jan. 1, 2016 through Dec. 31, 2017, and includes the indicators of:

  1. Central Line-Associated Blood Stream Infection (CLABSI);
  2. Catheter-Acquired Urinary Tract Infection (CAUTI);
  3. Surgical Site Infections (SSI);
  4. Methicillin-Resistant Staphylococcal Aureus (MRSA) Bacteremia; and
  5. Clostridium Difficile (C. Diff) Infection rates.

For FY 2019, the total HAC score is a weighted average of Domain 1 and Domain 2. Payment adjustments will be made for all Medicare discharges taking place from Oct. 1, 2018 through Sept. 30, 2019.

The reporting of these conditions with the associated present-on-admission (POA) indicator is what determines if the condition is a HAC. Health information management (HIM) coders should query the physician or have a discussion with their facility’s quality staff to determine if a condition is present on admission when the situation is murky. This statement is supported by the 2019 ICD-10-CM Reporting and Coding Guidelines. 

HACs are a drain on any facility’s finances, as they add cost and increase the length of stay (LOS). The 2016 data revealed that 48,771 HACs resulted in 3,219 potentially avoidable deaths, with an added LOS of 8.17 days and a 72.32 percent increase in mortality. The expense of treating the HACs was $41,917 beyond the average hospital cost per HAC patient. A total of 769 hospitals had their Medicare payments reduced for FY 2017.

HIM can assist in managing this by:

  1. Knowing which conditions are HACs;
  2. Identifying go-to people in quality for questions;
  3. Including documentation sources for HACs for coding purposes;
  4. Holding regular meetings with quality to discuss regulations, code changes, and/or problem cases; and
  5. Reviewing the current data to understand performance.

Managing this program is very much a team activity. It takes knowledge of HIM and quality to improve each facility’s performance. It is important to share information, as there are differences between clinical and coding understanding. There are times when sharing information that documentation is not accurate or noting that the coder was using the physician’s staging of the pressure ulcer rather than the wound care nurse documentation is critical. The combination of quality and HIM creates a combination of performance and data

Program Note:

Listen to Laurie Johnson live today on Talk Ten Tuesday, 10-10:30 a.m. EST.

Comment on this article

Facebook
Twitter
LinkedIn

Laurie M. Johnson, MS, RHIA, FAHIMA, AHIMA Approved ICD-10-CM/PCS Trainer

Laurie Johnson is currently a senior healthcare consultant for Revenue Cycle Solutions, based in Pittsburgh, Pa. Laurie is an AHIMA-approved ICD-10-CM/PCS trainer. She has more than 35 years of experience in health information management and specializes in coding and related functions. She has been a featured speaker in over 40 conferences. Laurie is a member of the ICD10monitor editorial board and is a permanent panelist on Talk Ten Tuesdays

Related Stories

Defining High-Quality Documentation

Defining High-Quality Documentation

Last week I wrote about the importance of defining what clinical documentation is, within the scope of clinical documentation integrity (CDI) reviews. This week, I’ll

Read More

Leave a Reply

Please log in to your account to comment on this article.

Featured Webcasts

The Cost of Ignoring Risk Adjustment: How HCCs Impact Revenue & Compliance

The Cost of Ignoring Risk Adjustment: How HCCs Impact Revenue & Compliance

Stop revenue leakage and boost hospital performance by mastering risk adjustment and HCCs. This essential webcast with expert Cheryl Ericson, RN, MS, CCDS, CDIP, will reveal how inaccurate patient acuity documentation leads to lost reimbursements through penalties from poor quality scores. Learn the critical differences between HCCs and traditional CCs/MCCs, adapt your CDI workflows, and ensure accurate payments in Medicare Advantage and value-based care models. Perfect for HIM leaders, coders, and CDI professionals.  Don’t miss this chance to protect your hospital’s revenue and reputation!

May 29, 2025
I050825

Mastering ICD-10-CM Coding for Diabetes and it’s Complications: Avoiding Denials & Ensuring Compliance

Struggling with ICD-10-CM coding for diabetes and complications? This expert-led webcast clarifies complex combination codes, documentation gaps, and sequencing rules to reduce denials and ensure compliance. Dr. Angela Comfort will provide actionable strategies to accurately link diabetes to complications, improve provider documentation, and optimize reimbursement—helping coders, CDI specialists, and HIM leaders minimize audit risks and strengthen revenue integrity. Don’t miss this chance to master diabetes coding with real-world case studies, key takeaways, and live Q&A!

May 8, 2025
2025 Coding Clinic Webcast Series

2025 ICD-10-CM/PCS Coding Clinic Update Webcast Series

Uncover critical guidance. HIM coding expert, Kay Piper, RHIA, CDIP, CCS, provides an interactive review on important information in each of the AHA’s 2025 ICD-10-CM/PCS Quarterly Coding Clinics in easy-to-access on-demand webcasts, available shortly after each official publication.

April 14, 2025

Trending News

Featured Webcasts

The Two-Midnight Rule: New Challenges, Proven Strategies

The Two-Midnight Rule: New Challenges, Proven Strategies

RACmonitor is proud to welcome back Dr. Ronald Hirsch, one of his most requested webcasts. In this highly anticipated session, Dr. Hirsch will break down the complex Two Midnight Rule Medicare regulations, translating them into clear, actionable guidance. He’ll walk you through the basics of the rule, offer expert interpretation, and apply the rule to real-world clinical scenarios—so you leave with greater clarity, confidence, and the tools to ensure compliance.

June 19, 2025
Open Door Forum Webcast Series

Open Door Forum Webcast Series

Bring your questions and join the conversation during this open forum series, live every Wednesday at 10 a.m. EST from June 11–July 30. Hosted by Chuck Buck, these fast-paced 30-minute sessions connect you directly with top healthcare experts tackling today’s most urgent compliance and policy issues.

June 11, 2025
Open Door Forum: The Changing Face of Addiction: Coding, Compliance & Care

Open Door Forum: The Changing Face of Addiction: Coding, Compliance & Care

Substance abuse is everywhere. It’s a complicated diagnosis with wide-ranging implications well beyond acute care. The face of addiction continues to change so it’s important to remember not just the addict but the spectrum of extended victims and the other social determinants and legal ramifications. Join John K. Hall, MD, JD, MBA, FCLM, FRCPC, for a critical Q&A on navigating substance abuse in 2025.  Register today and be a part of the conversation!

July 16, 2025

Trending News

Prepare for the 2025 CMS IPPS Final Rule with ICD10monitor’s IPPSPalooza! Click HERE to learn more

Get 15% OFF on all educational webcasts at ICD10monitor with code JULYFOURTH24 until July 4, 2024—start learning today!

CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24