CMS sets forth the framework for the new HAC Reduction Program, starting in FY 2015.  Under section 3008 of the Affordable Care Act, as amended, CMS is required to create a program for IPPS hospitals to improve patient safety by implementing financial penalties on hospitals that perform poorly with respect to HACs.  HACs are conditions that patients develop during their hospital stays that they did not have prior to being admitted.  Pursuant to the HAC Reduction Program, hospitals that rank in the lowest-performing quartile of HACs will be reimbursed 99 percent of what they otherwise would have been paid under IPPS.

The Final Rule identifies the quality measures and the scoring methodology to determine the lowest-performing quartile, in addition to the process hospitals will use to review and correct their data.  For the first year of the program in FY 2015, CMS will use measures that are part of the Inpatient Quality Reporting Program and is proposing to use a scoring methodology like the achievement scoring methodology currently used in the Hospital Value Based Purchasing Program scoring methodology.