Objective To evaluate the association between hospital penalization in the US Hospital Acquired Condition Reduction Program (HACRP) and subsequent changes in clinical outcomes. Design Regression discontinuity design applied to a retrospective cohort from inpatient Medicare claims. Setting 3238 acute care hospitals in the United States. Participants Medicare fee-for-service beneficiaries discharged from acute care hospitals between 23 July 2014 and 30 November 2016 and eligible for at least one targeted hospital acquired condition (n=15 470 334). Intervention Hospital receipt of a penalty in the first year of the HACRP. Main outcome measures Episode level count of targeted hospital acquired conditions per 1000 episodes, 30 day readmissions, and 30 day mortality. Results Of 724 hospitals penalized under the HACRP in fiscal year 2015, 708 were represented in the study. Mean counts of hospital acquired conditions were 2.72 per 1000 episodes for penalized hospitals and 2.06 per 1000 episodes for non-penalized hospitals; 30 day readmissions were 14.4% and 14.0%, respectively, and 30 day mortality was 9.0% for both hospital groups. Penalized hospitals were more likely to be large, teaching institutions, and have a greater share of patients with low socioeconomic status than non-penalized hospitals. HACRP penalties were associated with a non-significant change of −0.16 hospital acquired conditions per 1000 episodes (95% confidence interval −0.53 to 0.20), −0.36 percentage points in 30 day readmission (−1.06 to 0.33), and −0.04 percentage points in 30 day mortality (−0.59 to 0.52). No clear patterns of clinical improvement were observed across hospital characteristics. Conclusions Penalization was not associated with significant changes in rates of hospital acquired conditions, 30 day readmission, or 30 day mortality, and does not appear to drive meaningful clinical improvements. By disproportionately penalizing hospitals caring for more disadvantaged patients, the HACRP could exacerbate inequities in care.

ImportanceBundled Payments for Care Improvement Advanced (BPCI-A) is a Centers for Medicare & Medicaid Services (CMS) initiative that aims to produce financial savings by incentivizing decreases in clinical spending. Incentives consist of financial bonuses from CMS to hospitals or penalties paid by hospitals to CMS.ObjectiveTo investigate the association of hospital participation in BPCI-A with spending, and to characterize hospitals receiving financial bonuses vs penalties.Design, Setting, and ParticipantsDifference-in-differences and cross-sectional analyses of 4 754 139 patient episodes using 2013-2019 US Medicare claims at 694 participating and 2852 nonparticipating hospitals merged with hospital and market characteristics.ExposuresBPCI-A model years 1 and 2 (October 1, 2018, through December 31, 2019).Main Outcomes and MeasuresHospitals’ per-episode spending, CMS gross and net spending, and the incentive allocated to each hospital.ResultsThe study identified 694 participating hospitals. The analysis observed a −$175 change in mean per-episode spending (95% CI, −$378 to $28) and an aggregate spending change of −$75.1 million (95% CI, −$162.1 million to $12.0 million) across the 428 670 episodes in BPCI-A model years 1 and 2. However, CMS disbursed $354.3 million (95% CI, $212.0 million to $496.0 million) more in bonuses than it received in penalties. Hospital participation in BPCI-A was associated with a net loss to CMS of $279.2 million (95% CI, $135.0 million to $423.0 million). Hospitals in the lowest quartile of Medicaid days received a mean penalty of $0.41 million; (95% CI, $0.09 million to $0.72 million), while those in the highest quartile received a mean bonus of $1.57 million; (95% CI, $1.09 million to $2.08 million). Similar patterns were observed for hospitals across increasing quartiles of Disproportionate Share Hospital percentage and of patients from racial and ethnic minority groups.Conclusions and RelevanceAmong US hospitals measured between 2013 and 2019, participation in BPCI-A was significantly associated with an increase in net CMS spending. Bonuses accrued disproportionately to hospitals providing care for marginalized communities.

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Objective: To compare the predictive accuracy of two approaches to target price calculations under Bundled Payments for Care Improvement-Advanced (BPCI-A):the traditional Centers for Medicare and Medicaid Services (CMS) methodology and an empirical Bayes approach designed to mitigate the effects of regression to the mean.