Georgia Medicare HAC Reduction Program 2026 Guide

::: hero

By Brevy Care Team · Last verified May 13, 2026

The Hospital-Acquired Condition Reduction Program (HACRP) completes the Medicare quality-based payment trifecta alongside the Hospital Value-Based Purchasing Program (HVBP, Section 1886(o)) and the Hospital Readmissions Reduction Program (HRRP, Section 1886(q)). Authorized at Section 1886(p) of the Social Security Act through Section 3008 of the Affordable Care Act of 2010, HACRP reduces Medicare IPPS payments for hospitals in the worst-performing quartile of hospital-acquired conditions including healthcare-associated infections and patient safety indicators.

For Georgia, HACRP affects every IPPS hospital. Major hospitals including Grady Memorial Hospital, Emory University Hospital, Memorial Savannah, AU Medical Center, Phoebe Putney Memorial, Atrium Health Floyd, Northeast Georgia Medical Center, Wellstar, Piedmont, and Northside all participate in HACRP. Combined with HVBP and HRRP, a significant portion of Medicare IPPS revenue is at risk based on quality performance across the three programs.

This guide covers the HACRP statutory framework, the six HAC measures (CDC NHSN CAUTI, CLABSI, SSI Colon and Abdominal Hysterectomy, MRSA Bacteremia, C. difficile Infection, and AHRQ PSI-90 composite), the Total HAC Score methodology using winsorized z-scores, the bottom quartile penalty, hospital exclusions (CAH, Maryland, cancer hospitals, children's hospitals, religious nonmedical health care institutions), GMCF QIN-QIO support, combined effects with HVBP and HRRP, and how major Georgia hospitals approach HACRP compliance and quality improvement. :::

::: callout

Key takeaways for Georgia hospitals, administrators, and Medicare beneficiaries

1. Section 1886(p) Social Security Act authorizes HACRP, added by Section 3008 of the ACA of 2010.

2. Payment reduction applied to base operating IPPS DRG payments for hospitals in the worst-performing quartile of hospital-acquired conditions.

3. Six HAC measures comprise the program: five CDC NHSN healthcare-associated infection measures (CAUTI, CLABSI, SSI Colon and Abdominal Hysterectomy, MRSA Bacteremia, C. difficile Infection) plus the AHRQ PSI-90 patient safety composite.

4. Two domains: Domain 1 includes the AHRQ PSI-90 composite. Domain 2 includes the CDC NHSN HAI measures.

5. Winsorized z-score methodology standardizes performance across measures, with extreme values capped to limit outlier influence.

6. Bottom 25 percent of hospitals by Total HAC Score receive the 1 percent reduction; all other hospitals receive no HACRP adjustment.

7. No improvement scoring, unlike HVBP. HACRP uses achievement-only methodology. Hospitals are ranked relative to peers regardless of trajectory.

8. Critical Access Hospitals are excluded from HACRP, along with Maryland hospitals, PPS-exempt cancer hospitals, children's hospitals, and religious nonmedical health care institutions.

9. Combined with HVBP and HRRP, a significant portion of Medicare IPPS revenue is at risk based on quality performance across the three programs. :::

The statute: Section 1886(p) and Section 3008 ACA

The Hospital-Acquired Condition Reduction Program is authorized at Section 1886(p) of the Social Security Act. The statute was added by Section 3008 of the Patient Protection and Affordable Care Act of 2010 (Public Law 111-148, enacted March 23, 2010), with HACRP effective for discharges occurring on or after October 1, 2014 (fiscal year 2015).

Section 1886(p) directs the Secretary of Health and Human Services to identify hospitals in the worst-performing quartile of hospital-acquired conditions and reduce IPPS payments to those hospitals by 1 percent. The statute requires identification of a specific quartile (25 percent of hospitals) for reduction, distinguishing HACRP from HVBP (which redistributes based on continuous performance) and HRRP (which reduces payments based on excess readmission ratio against expected).

Section 3008 ACA

Section 3008 of the ACA established HACRP as part of the broader healthcare reform legislation. The provision required CMS to develop and implement HACRP, specified the quartile identification approach, mandated 1 percent reduction, and established framework for ongoing development of measures and methodology.

Statutory rationale

The statutory rationale for HACRP includes:

• Reducing hospital-acquired conditions
• Improving patient safety
• Creating financial incentive against complacency on infections and adverse events
• Aligning Medicare payment with patient safety performance
• Reducing Medicare beneficiary harm

Statutory limitations

The statute establishes specific limitations:

• 1 percent reduction (no greater)
• Bottom quartile identification
• Applicability to subsection (d) hospitals
• Specific excluded hospital categories
• Limited review of hospital determinations

Relationship to broader ACA quality reform

Section 3008 HACRP fits within the broader ACA quality reform architecture:

• Section 3001 HVBP (Section 1886(o))
• Section 3025 HRRP (Section 1886(q))
• Section 3008 HACRP (Section 1886(p))

Together, these provisions establish the trifecta of quality-based payment adjustments affecting IPPS hospitals.

The six HAC measures

HACRP measures hospital performance on six measures across two domains.

Domain 1: AHRQ PSI-90 composite

Domain 1 contains a single measure, the AHRQ Patient Safety Indicator 90 (PSI-90) composite. PSI-90 is a weighted combination of multiple individual patient safety indicators developed by the Agency for Healthcare Research and Quality (AHRQ).

PSI-90 components include:

• PSI 03: Pressure Ulcer Rate
• PSI 06: Iatrogenic Pneumothorax Rate
• PSI 08: In-Hospital Fall with Hip Fracture Rate
• PSI 09: Postoperative Hemorrhage or Hematoma Rate
• PSI 10: Postoperative Acute Kidney Injury Rate
• PSI 11: Postoperative Respiratory Failure Rate
• PSI 12: Perioperative Pulmonary Embolism or DVT Rate
• PSI 13: Postoperative Sepsis Rate
• PSI 14: Postoperative Wound Dehiscence Rate
• PSI 15: Abdominopelvic Accidental Puncture or Laceration Rate

Each PSI is risk-adjusted using AHRQ-developed methodology, and the PSI-90 composite combines individual PSIs with specific weighting. PSI-90 is calculated from administrative claims data rather than NHSN surveillance reporting.

Domain 2: CDC NHSN healthcare-associated infections

Domain 2 contains the CDC National Healthcare Safety Network (NHSN) healthcare-associated infection measures:

CAUTI (Catheter-Associated Urinary Tract Infection):

• Patients with indwelling urinary catheters
• Symptomatic UTI meeting NHSN criteria
• Catheter days as denominator
• Unit-specific reporting (ICU, ward)

CLABSI (Central Line-Associated Bloodstream Infection):

• Patients with central venous catheters
• Laboratory-confirmed bloodstream infection meeting NHSN criteria
• Central line days as denominator
• Unit-specific reporting

SSI (Surgical Site Infection):

• Colon procedures
• Abdominal Hysterectomy procedures
• Defined surveillance period after surgery
• Specific NHSN case definitions

MRSA Bacteremia:

• Hospital-onset MRSA bloodstream infection
• Patient days as denominator
• Laboratory identified

C. difficile Infection (CDI):

• Hospital-onset Clostridioides difficile infection
• Patient days as denominator
• Laboratory identified

Measure overlap with HVBP

The CDC NHSN HAI measures and PSI-90 also appear in the HVBP Safety domain. The same measure data is used for both programs but with different scoring methodology. This creates double exposure: hospitals with poor HAI performance may face both HVBP Safety domain penalty effect and HACRP bottom-quartile 1 percent reduction.

The Standardized Infection Ratio (SIR)

The SIR is the primary HACRP measurement metric for CDC NHSN HAI measures.

SIR calculation

SIR = Observed Infections / Expected Infections

Where:

• Observed infections are those meeting NHSN case definitions during the measurement period
• Expected infections are calculated based on hospital-level risk factors and case mix

SIR interpretation

• SIR less than 1.0: hospital has fewer infections than expected (better performance)
• SIR equal to 1.0: hospital is at expected performance
• SIR greater than 1.0: hospital has more infections than expected (worse performance)

SIR risk adjustment

SIR risk adjustment varies by measure but typically includes:

• Hospital teaching status
• Medical school affiliation
• Hospital size
• Service mix
• Patient case mix
• For unit-specific measures: ICU type

SIR statistical assessment

• Statistical significance assessed using Poisson distribution
• Hospitals can be statistically better than, worse than, or no different from expected
• Confidence intervals around SIR estimates

Total HAC Score methodology

The Total HAC Score is the core HACRP calculation determining which hospitals receive the 1 percent reduction.

Step 1: Measure-level z-scores

For each measure, hospital performance is converted to a z-score:

• Hospital measure value minus national mean / national standard deviation
• Positive z-score: above mean (worse for HACs which represent adverse events)
• Negative z-score: below mean (better)

Step 2: Winsorization

Z-scores are winsorized to limit extreme value influence:

• Z-scores beyond specified threshold capped
• Reduces effect of outliers
• Improves statistical stability

Step 3: Domain scores

Domain scores calculated from measure z-scores:

• Domain 1: AHRQ PSI-90 z-score
• Domain 2: Average of CDC NHSN measure z-scores

Step 4: Domain weighting

Current methodology weights Domain 1 and Domain 2 equally (50/50). Historical configurations had different weightings, and weighting may evolve through annual rulemaking.

Step 5: Total HAC Score

Total HAC Score = (Domain 1 z-score × weight) + (Domain 2 z-score × weight)

Higher Total HAC Score indicates worse performance. Hospitals are ranked by Total HAC Score.

Step 6: Bottom quartile identification

The worst-performing 25 percent of hospitals by Total HAC Score (highest Total HAC Score) receive the 1 percent reduction. Specific threshold determined annually based on actual hospital distribution.

No improvement scoring

A key feature distinguishing HACRP from HVBP is the absence of improvement scoring. HACRP uses pure achievement-based ranking. A hospital can improve substantially from the prior year but still fall in the bottom quartile relative to peers and receive the 1 percent reduction.

This methodology has been critiqued because:

• It penalizes improving hospitals if they still rank in bottom quartile
• It guarantees that 25 percent of hospitals will be penalized regardless of overall industry quality
• It does not recognize trajectory or effort

Defenders argue the methodology focuses pressure on persistent under-performers and creates clear bottom-line incentive against complacency.

Application through Medicare claim payment

HACRP 1 percent reduction is applied through Medicare claim payment.

DRG payment multiplier

For hospitals in the bottom quartile, each claim's base operating DRG payment is multiplied by 0.99 (1 percent reduction). The reduction applies for the entire fiscal year.

Net effect

Unlike HVBP (which redistributes), HACRP reduction is one-directional. Hospitals in bottom quartile experience full 1 percent reduction with no offsetting payment. Hospitals not in bottom quartile experience no HACRP effect.

Cost report capture

HACRP adjustments are reflected on hospital cost report Worksheet E, Part A.

Annual notification

Hospitals receive annual notification of HACRP results including Total HAC Score, quartile assignment, and applicable payment adjustment.

Hospitals excluded from HACRP

Several hospital categories are excluded from HACRP.

Critical Access Hospitals

CAHs are excluded because they are not paid under IPPS but under cost-based reimbursement (101 percent of reasonable cost). Most rural Georgia hospitals designated as CAHs are excluded from HACRP. Georgia has numerous CAHs across rural areas.

Maryland hospitals

Maryland hospitals operate under a unique all-payer rate-setting demonstration authorized under Section 1814(b)(3). These hospitals are not subject to HACRP.

PPS-Exempt cancer hospitals

Eleven designated PPS-exempt cancer hospitals are excluded. These specialized cancer centers operate under a different payment system.

Children's hospitals

Pediatric specialty hospitals are excluded. Children's Healthcare of Atlanta (CHOA) is excluded from HACRP.

Religious Nonmedical Health Care Institutions

Specific exclusion for religious nonmedical health care institutions.

Hospitals with insufficient cases

Hospitals must have minimum cases for each measure to qualify. Hospitals failing to meet minimum thresholds may not have complete HACRP scoring.

CDC NHSN reporting

The NHSN is the primary national HAI surveillance system, and NHSN reporting is mandatory for HACRP hospitals.

NHSN system

• CDC National Healthcare Safety Network
• Hospitals report HAI data electronically
• Specific case definitions and reporting protocols
• Validation requirements

NHSN reporting requirements

• Specific measure data
• Standardized denominators (catheter days, central line days, patient days, procedures)
• Numerator events meeting NHSN criteria
• Timely reporting

NHSN validation

• CMS validates a sample of NHSN-reported data
• Hospitals required to support validation reviews
• Discrepancies addressed through correction or finding

CDC HAI prevention guidance

CDC publishes substantial HAI prevention guidance including:

• Catheter and central line bundles
• Surgical site infection prevention
• Hand hygiene
• Environmental cleaning
• Antimicrobial stewardship
• Compendium of strategies updated periodically

AHRQ Patient Safety Indicators

AHRQ Patient Safety Indicators are administrative claims-based measures of patient safety adverse events.

AHRQ Quality Indicator software

• AHRQ develops and distributes Quality Indicator software
• Software applies measure definitions to hospital claims data
• Risk adjustment included
• Used by CMS for HACRP PSI-90 calculation

PSI definitions

Each PSI has specific definition including:

• Numerator (event meeting specific criteria from claim coding)
• Denominator (eligible population)
• Exclusions (specific clinical situations)
• Risk adjustment

PSI dependence on coding

PSI measurement depends on accurate ICD-10 diagnosis coding from hospital claims. Coding practices affect PSI rates:

• Present-on-admission (POA) coding important to distinguish hospital-acquired from pre-existing
• Specific complication codes critical
• Coder training and validation important

PSI Risk adjustment

PSI risk adjustment uses:

• Patient demographics
• Comorbidities
• Specific procedure characteristics
• Hospital characteristics

Worked example 1: Grady Memorial Hospital HACRP

Grady Memorial Hospital is the major safety-net hospital in Atlanta serving substantial dual eligible and complex patient population. Hypothetical HACRP scenario:

• Domain 1 (PSI-90): Z-score of +0.5 (above mean, worse than average)
• Domain 2 (CDC NHSN HAI): Average z-score of +0.3 (above mean, worse than average)
• Total HAC Score: 0.4 (after weighting)
• National Total HAC Score distribution: 25th percentile cutoff at 0.35
• Grady ranks in bottom 25 percent
• 1 percent reduction applied
• On approximately $250 million base operating DRG payments, HACRP reduction ≈ $2.5 million

Grady's response includes:

• Comprehensive infection prevention program
• Catheter and central line stewardship
• Antimicrobial stewardship
• Patient safety initiatives
• Continued quality improvement investment
• Engagement with GMCF QIN-QIO

The Grady situation illustrates the safety-net hospital HACRP challenge: hospitals serving complex patient populations face inherent challenges in HAI and patient safety measurement despite extensive quality improvement infrastructure. Unlike HVBP's Section 3001(b) Health Equity Adjustment and HRRP's Section 15002 Cures Act peer groups, HACRP does not currently include equity adjustment.

Worked example 2: Emory University Hospital academic HACRP

Emory University Hospital is a major academic medical center in Atlanta. Hypothetical HACRP scenario:

• Domain 1 (PSI-90): Z-score of +0.2 (slightly above mean)
• Domain 2 (CDC NHSN HAI): Average z-score of -0.1 (slightly better than mean)
• Total HAC Score: 0.05 (after weighting)
• Grady ranks above bottom quartile threshold
• No HACRP reduction
• Effect: $0 from HACRP

Emory's strong HAI performance reflects:

• Substantial infection prevention infrastructure
• Academic medical center research and innovation
• Antimicrobial stewardship program
• Hand hygiene programs
• Hospital epidemiology department

Worked example 3: Phoebe Putney rural HACRP

Phoebe Putney Memorial Hospital in Albany serves substantial rural southwest Georgia population. Hypothetical HACRP scenario:

• Domain 1 (PSI-90): Z-score of +0.1
• Domain 2 (CDC NHSN HAI): Average z-score of +0.1
• Total HAC Score: 0.1
• Phoebe ranks above bottom quartile threshold
• No HACRP reduction
• Effect: $0 from HACRP

Phoebe Putney leverages community hospital infrastructure for HAI control while addressing patient safety through systematic programs.

Worked example 4: AU Medical Center academic HACRP

Augusta University Medical Center is an academic medical center serving east-central Georgia. Hypothetical HACRP scenario:

• Domain 1 (PSI-90): Z-score of +0.4 (academic teaching often has higher PSI rates due to case complexity)
• Domain 2 (CDC NHSN HAI): Average z-score of +0.2
• Total HAC Score: 0.3
• AU Medical ranks near bottom quartile threshold but slightly above
• No HACRP reduction (narrow miss)
• Effect: $0 from HACRP

AU Medical Center's situation illustrates the teaching hospital challenge: academic medical centers often have higher PSI-90 rates due to patient complexity and risk adjustment limitations.

Worked example 5: Memorial Health Savannah HCA HACRP

Memorial Health (HCA Healthcare) in Savannah is the major hospital for coastal Georgia. Hypothetical HACRP scenario:

• Domain 1 (PSI-90): Z-score of -0.2 (better than mean)
• Domain 2 (CDC NHSN HAI): Average z-score of -0.1 (better than mean)
• Total HAC Score: -0.15
• Memorial ranks well above bottom quartile threshold
• No HACRP reduction
• Effect: $0 from HACRP

Memorial Savannah benefits from HCA Healthcare system-level infection prevention and patient safety programs.

Worked example 6: Comprehensive HAI reduction program

A Georgia hospital implementing comprehensive HAI reduction program over three years:

Baseline performance:

• CAUTI SIR: 1.5 (above expected)
• CLABSI SIR: 1.3
• SSI Colon SIR: 1.2
• MRSA SIR: 1.1
• CDI SIR: 1.4
• PSI-90 rate: above national average
• Bottom quartile HACRP penalty for two consecutive years

Intervention program:

• Hospital epidemiology and infection prevention department expansion
• Catheter associated UTI bundle implementation
• Central line associated bloodstream infection bundle
• Surgical site infection bundle for colon procedures
• Antimicrobial stewardship program
• Hand hygiene compliance program with monitoring
• Environmental cleaning protocols
• Staff training and certification
• NHSN reporting validation
• Continued GMCF QIN-QIO engagement

Year 3 performance:

• CAUTI SIR: 0.7
• CLABSI SIR: 0.6
• SSI Colon SIR: 0.8
• MRSA SIR: 0.7
• CDI SIR: 0.9
• PSI-90 rate: below national average
• No HACRP penalty in year 3
• Avoided 1 percent reduction ≈ $1.5 million on $150 million base

The investment in infection prevention infrastructure pays for itself through avoided HACRP penalty plus reduced direct cost of infections and improved patient outcomes.

Georgia Medical Care Foundation (GMCF) QIN-QIO

The GMCF is the Quality Innovation Network-Quality Improvement Organization for Georgia.

What is GMCF?

GMCF is a not-for-profit organization serving as the QIO for Georgia. GMCF provides technical assistance to Georgia hospitals on quality improvement.

HACRP support

GMCF supports Georgia hospitals on HACRP through:

• HAI reduction collaboratives
• Patient safety improvement programs
• Antimicrobial stewardship support
• Data analytics and benchmarking
• Best practice dissemination
• NHSN reporting support

Coverage

GMCF serves Georgia hospitals at no cost as part of the CMS-funded QIN-QIO program.

National QIN-QIO program

GMCF is one of several QIN-QIOs nationally, providing regional quality improvement support funded by CMS.

Hospital Compare and Care Compare public reporting

HACRP results are publicly reported.

Care Compare website

Care Compare at medicare.gov/care-compare publishes hospital quality information including:

• HACRP results
• HAI rates
• PSI-90 rates
• HACRP penalty status

Hospital star ratings

CMS publishes overall hospital star ratings integrating multiple quality measures. HACRP measures contribute to star ratings.

Beneficiary use

Beneficiaries can use HACRP and Care Compare results to inform hospital choice based on patient safety performance.

Combined effects with HVBP and HRRP

HACRP combines with HVBP and HRRP for total quality-based payment effect.

Combined revenue at risk

• HACRP: 1 percent reduction for bottom quartile
• HVBP: ±2 percent redistribution
• HRRP: up to 3 percent reduction
• Combined: up to approximately 6 percent of Medicare IPPS revenue at risk

Differing structures

• HACRP: bottom quartile achievement-only penalty
• HVBP: continuous achievement and improvement redistribution
• HRRP: ERR-based penalty against expected

Measure overlap

• HACRP and HVBP share CDC NHSN HAI measures and PSI-90
• Same measure data, different scoring methodology
• Double exposure for hospitals with poor HAI performance

Integrated quality strategy

Effective hospital quality strategy addresses all three programs:

• Quality measure improvement
• Readmission reduction (HRRP)
• HAI and patient safety (HACRP and HVBP)
• Patient experience (HVBP)
• Care coordination (HVBP MSPB)

MedPAC analyses

The Medicare Payment Advisory Commission has analyzed HACRP.

MedPAC concerns

• Penalty concentration at safety-net and teaching hospitals
• Methodology refinement needs
• Equity considerations
• Combined burden with HVBP and HRRP
• No improvement scoring critique
• Mandatory 25 percent penalty regardless of overall industry quality

MedPAC recommendations

• Improved risk adjustment
• Health equity considerations
• Potential consolidation with other quality programs
• Continued attention to safety-net hospital impact

Future direction

CMS continues to refine HACRP through annual rulemaking. Potential future changes include refined risk adjustment, health equity considerations, and potential program consolidation.

Research evidence

The research literature on HACRP effects includes:

HAI rate trends

• HAI rates have declined since HACRP inception
• Decline accompanied multiple quality programs including HACRP, HVBP, CMS HAI prevention initiatives
• Causation difficult to disentangle

Penalty concentration

• Safety-net hospitals disproportionately penalized
• Teaching hospitals disproportionately penalized
• Equity concerns persist

Effectiveness of HAI prevention

• Bundles effective in reducing CAUTI, CLABSI, SSI
• Antimicrobial stewardship effective in reducing CDI
• Environmental cleaning critical
• Hand hygiene foundational

Hospital quality improvement investment

• Hospital investment in infection prevention and patient safety has grown substantially in HACRP era
• Quality improvement infrastructure widely adopted
• Continuing investment essential

AHA position on HACRP

The American Hospital Association engages HACRP through:

• Advocacy on methodology issues
• Health equity considerations
• Combined burden concerns (HACRP/HVBP/HRRP)
• Litigation on specific issues
• Continued engagement with CMS rulemaking

AHA has specifically advocated for:

• Risk adjustment improvements
• Recognition of safety-net hospital challenges
• Consideration of teaching hospital case complexity
• Health equity adjustment similar to HVBP and HRRP

Major Georgia hospitals and HACRP

Grady Memorial Hospital

• Atlanta
• Major safety-net hospital
• Penalty concentration concern population
• Substantial infection prevention infrastructure
• Continuing quality improvement investment

Emory University Hospital

• Atlanta
• Academic medical center
• Strong infection prevention programs
• Hospital epidemiology department

Emory University Hospital Midtown

• Atlanta
• Community teaching hospital
• Emory system support

Memorial Health (HCA)

• Savannah
• HCA system infection prevention infrastructure
• Coastal Georgia primary hospital

AU Medical Center

• Augusta
• Academic medical center
• Teaching hospital challenges with PSI-90 case complexity

Phoebe Putney Memorial

• Albany
• Major southwest Georgia hospital
• Community hospital infrastructure

Atrium Health Floyd

• Rome
• Atrium Health system
• Northwest Georgia

Northeast Georgia Medical Center

• Gainesville
• Regional hospital
• Northeast Georgia

Wellstar Health System

• Multiple metro Atlanta hospitals
• System-wide infection prevention
• Coordinated patient safety programs

Piedmont Healthcare

• Multiple Georgia hospitals
• System-level coordination
• Shared infection prevention infrastructure

Children's Healthcare of Atlanta

• Excluded from HACRP (children's hospital)
• Voluntary participation in quality measurement

Northside Hospital

• Multiple Atlanta campuses
• Community hospital network

Rural Georgia hospitals

• CAHs excluded from HACRP
• Smaller PPS hospitals subject to HACRP

HACRP common compliance errors

1. Inadequate NHSN data reporting: HAI data must meet NHSN definitions. Incomplete or inaccurate reporting affects scoring.

2. Poor Present-on-Admission (POA) coding: PSI-90 measurement depends on accurate POA coding to distinguish hospital-acquired from pre-existing conditions. Coding errors can inflate PSI rates.

3. Insufficient hand hygiene compliance: Foundational HAI prevention requires high hand hygiene compliance. Monitoring and improvement essential.

4. Inadequate catheter and central line bundles: CAUTI and CLABSI reduction depends on consistent bundle implementation. Gaps create infection risk.

5. Insufficient antimicrobial stewardship: CDI prevention requires antimicrobial stewardship to reduce inappropriate antibiotic use.

6. Inadequate environmental cleaning: HAI prevention depends on systematic environmental cleaning protocols, particularly for CDI.

7. Failing to validate NHSN data: NHSN data accuracy critical. Hospitals must validate internally.

8. Insufficient infection prevention infrastructure: Effective HAI reduction requires infection prevention specialists, hospital epidemiology, and supporting infrastructure.

9. Not engaging GMCF QIN-QIO: Free technical assistance from GMCF is available; not engaging this resource leaves value on the table.

10. Inadequate patient safety infrastructure: PSI-90 reduction requires patient safety infrastructure addressing falls, pressure ulcers, surgical complications, and other patient safety issues.

11. Failing to coordinate HACRP with HVBP: Measure overlap means HAI and PSI-90 performance affects both programs. Integrated quality strategy essential.

12. Not reviewing preview period results: Hospitals must review Hospital-Specific Report during preview period and identify errors.

13. Insufficient governance attention: Hospital boards and senior leadership must engage HACRP. Insufficient executive attention undermines quality improvement.

14. Inadequate staff training: HAI prevention and patient safety depend on staff training and competency. Inadequate training undermines programs.

::: accordion

Frequently asked questions about Georgia Medicare HACRP

What is HACRP?

The Hospital-Acquired Condition Reduction Program is a CMS quality-based payment adjustment program that reduces Medicare IPPS payments by 1 percent for hospitals in the worst-performing quartile of hospital-acquired conditions.

What statute authorizes HACRP?

Section 1886(p) of the Social Security Act, added by Section 3008 of the Affordable Care Act of 2010 (Public Law 111-148).

When did HACRP take effect?

Fiscal year 2015 (October 1, 2014).

What is the penalty?

1 percent reduction of base operating IPPS DRG payments for hospitals in the bottom quartile by Total HAC Score.

Which hospitals are penalized?

The worst-performing 25 percent of hospitals by Total HAC Score (highest Total HAC Score). All other hospitals receive no HACRP adjustment.

What measures are in HACRP?

Six measures across two domains: AHRQ PSI-90 composite (Domain 1) plus five CDC NHSN HAI measures (Domain 2): CAUTI, CLABSI, SSI Colon and Abdominal Hysterectomy, MRSA Bacteremia, and C. difficile Infection.

What is the Total HAC Score?

A composite measure of hospital performance across all HAC measures, calculated using winsorized z-scores. Higher score = worse performance.

What is the winsorized z-score methodology?

Hospital performance on each measure is standardized to a z-score. Extreme z-scores are capped (winsorized) to limit outlier influence. Z-scores are combined across measures to produce Total HAC Score.

Does HACRP have improvement scoring?

No. Unlike HVBP, HACRP uses achievement-only scoring. Hospitals are ranked relative to peers regardless of trajectory.

What is the SIR?

Standardized Infection Ratio = Observed Infections / Expected Infections. Used for CDC NHSN HAI measurement.

What is PSI-90?

AHRQ Patient Safety Indicator 90 composite, a weighted combination of multiple individual patient safety indicators including pressure ulcer rate, postoperative complications, and accidental procedural injuries.

Are Critical Access Hospitals subject to HACRP?

No. CAHs are excluded because they are not paid under IPPS but under cost-based reimbursement.

Are Maryland hospitals subject to HACRP?

No. Maryland hospitals operate under a unique all-payer rate-setting demonstration.

Are PPS-exempt cancer hospitals subject to HACRP?

No. The eleven PPS-exempt cancer hospitals are excluded.

Are children's hospitals subject to HACRP?

No. Children's hospitals including Children's Healthcare of Atlanta are excluded.

How does HACRP combine with HVBP and HRRP?

Combined, up to approximately 6 percent of Medicare IPPS revenue is at risk: HVBP ±2 percent, HRRP up to 3 percent, HACRP 1 percent.

Does HACRP have health equity adjustment?

Currently no. Unlike HVBP (Section 3001(b) HEA effective FY 2024) and HRRP (Section 15002 Cures Act peer groups effective FY 2019), HACRP does not currently include equity adjustment. This remains a continuing policy debate.

Where are HACRP results publicly reported?

Care Compare at medicare.gov/care-compare publishes HACRP results, HAI rates, and PSI-90 rates.

Who develops the AHRQ PSI measures?

The Agency for Healthcare Research and Quality (AHRQ) develops PSI measures and the AHRQ Quality Indicator software used for calculation.

Who develops the CDC NHSN measures?

The Centers for Disease Control and Prevention's National Healthcare Safety Network develops HAI measures and maintains the NHSN surveillance system.

What is GMCF?

Georgia Medical Care Foundation, the Quality Innovation Network-Quality Improvement Organization for Georgia. Provides free hospital quality improvement technical assistance.

How can a hospital reduce its HACRP penalty risk?

Through systematic HAI reduction (catheter/central line bundles, SSI bundles, antimicrobial stewardship, hand hygiene, environmental cleaning), patient safety programs (falls prevention, pressure ulcer prevention, postoperative complication prevention), accurate NHSN reporting, proper Present-on-Admission coding, and engagement with GMCF QIN-QIO.

Does HACRP affect Medicare beneficiaries directly?

Indirectly. HACRP creates financial incentive for hospital safety improvement, which should produce better beneficiary outcomes through reduced hospital-acquired conditions.

What are the safety-net hospital concerns?

Safety-net hospitals serving disadvantaged populations face structural challenges in HAI and patient safety measurement and have disproportionately been penalized under HACRP. Section 3001(b) HEA for HVBP and Section 15002 peer groups for HRRP partly addressed similar concerns; HACRP does not currently have equivalent adjustment.

Where can I get help with HACRP in Georgia?

For hospital provider questions, Palmetto GBA at 1-866-238-9650 or engage quality improvement support through GMCF. Georgia Hospital Association at 770-249-4500 provides advocacy. CMS QIO program through GMCF provides free technical assistance. Brevy at brevy.com publishes guides. :::

HACRP, beneficiary access, and care quality

The HACRP creates financial incentive for hospitals to prevent hospital-acquired conditions. The ultimate goal is improved Medicare beneficiary safety through reduced infections and adverse events.

Beneficiary perspective

For Medicare beneficiaries, HACRP creates pressure that should result in:

• Lower infection rates
• Lower adverse event rates
• Better patient safety culture
• Better infection prevention infrastructure
• Better patient safety infrastructure

Beneficiary information

Care Compare allows beneficiaries to review hospital safety information including HAI rates and PSI-90 performance before choosing a hospital.

Implications for vulnerable beneficiaries

Without health equity adjustment, safety-net hospitals face HACRP penalty concentration. Continued attention to safety-net hospital quality and resources is important. Beneficiary advocacy organizations including Center for Medicare Advocacy, Medicare Rights Center, and AARP engage on HACRP equity considerations.

Beneficiary education

Care Compare website helps beneficiaries make informed hospital choice decisions based on patient safety performance.

HAI prevention programs in detail

Effective HAI prevention requires comprehensive program addressing each HACRP HAI measure.

Hand hygiene program

Hand hygiene is foundational HAI prevention:

• WHO Five Moments for Hand Hygiene
• Alcohol-based hand rub availability
• Soap and water availability
• Compliance monitoring (direct observation or technology-based)
• Feedback to staff
• Continuous improvement
• Patient and family engagement

Catheter-Associated UTI prevention bundle

• Insertion bundle (sterile technique, appropriate indications)
• Maintenance bundle (closed system, daily review of necessity)
• Removal as soon as catheter no longer needed
• Alternative urinary management when possible
• Staff training and competency
• Daily review by nursing

Central Line-Associated Bloodstream Infection prevention bundle

• Hand hygiene
• Maximum sterile barrier precautions during insertion
• Chlorhexidine skin antisepsis
• Optimal catheter site selection (subclavian preferred, avoid femoral)
• Daily review of line necessity
• Disinfection of hub and ports
• Aseptic technique for line manipulation

Surgical Site Infection prevention

• Preoperative antimicrobial prophylaxis
• Appropriate hair removal (clippers, not razors)
• Glucose control
• Normothermia maintenance
• Sterile technique
• Postoperative wound care
• Surveillance

MRSA prevention

• Active surveillance in high-risk units
• Contact precautions
• Decolonization protocols
• Environmental cleaning
• Hand hygiene
• Antimicrobial stewardship

C. difficile prevention

• Antimicrobial stewardship (foundational)
• Hand hygiene with soap and water (alcohol does not eliminate C. diff spores)
• Contact precautions
• Environmental cleaning with sporicidal agents
• Patient cohorting when possible
• Testing protocols

Antimicrobial stewardship program

• Multidisciplinary team (infectious disease physician, clinical pharmacist, infection preventionist)
• Prospective audit and feedback
• Formulary restriction
• Education
• Antibiogram development
• Monitoring of resistance patterns
• Reporting and feedback

Patient safety programs in detail

PSI-90 reduction requires comprehensive patient safety programs.

Falls prevention

• Falls risk assessment on admission
• Falls precautions for high-risk patients
• Bed alarms when appropriate
• Hourly rounding
• Toileting schedules
• Environmental modifications
• Patient and family education

Pressure ulcer prevention

• Risk assessment (Braden Scale or similar)
• Repositioning protocols
• Specialty surfaces for high-risk patients
• Skin assessment
• Nutritional support
• Continence management
• Patient and family education

Postoperative complication prevention

• VTE prophylaxis (chemical and mechanical)
• Glucose control
• Postoperative respiratory care
• Early ambulation
• Pain management
• Wound care
• Surgical site infection prevention

Procedural safety

• Time-out before invasive procedures
• Universal protocol
• Specimen labeling
• Patient identification
• Equipment safety
• Communication standardization

Patient safety culture

• Safety culture surveys
• Just culture principles
• Event reporting (encouraged, not punitive)
• Root cause analysis
• Process improvement
• Leadership engagement

Hospital quality improvement infrastructure for HACRP

Effective HACRP performance requires substantial quality improvement infrastructure.

Infection prevention department

• Infection preventionists (CIC-certified)
• Hospital epidemiologist (often infectious disease physician)
• Data analysts
• Educators
• Quality liaisons

Patient safety department

• Patient safety officer
• Patient safety specialists
• Root cause analysis support
• Event reporting infrastructure
• Risk management coordination

Hospital medicine engagement

• Hospitalist leadership
• Clinical pathway development
• Order set development
• Bundle compliance

Pharmacy engagement

• Antimicrobial stewardship pharmacist
• Medication safety pharmacist
• Pharmacy informatics

Nursing engagement

• CNO leadership
• Unit nurse managers
• Bedside nursing engagement
• Nurse education

IT infrastructure

• EHR-integrated alerts and reminders
• Predictive analytics
• Surveillance systems
• Reporting platforms
• Data analytics

HACRP enforcement and dispute resolution

While HACRP scoring is formulaic, certain dispute and review mechanisms exist.

Preview period review

Hospitals receive Hospital-Specific Report (HSR) during preview period and can identify:

• Data accuracy errors
• Measure calculation errors
• Coding errors
• Specific eligibility issues

Limited corrections

CMS allows corrections through limited process for clear errors:

• Data submission errors
• Clear calculation errors
• Eligibility issues

No substantive methodology appeal

Hospitals cannot appeal the underlying measure methodology, risk-adjustment models, or scoring methodology through individual review. Methodology is established through CMS rulemaking.

Judicial review

HACRP methodology can be challenged through judicial review of final rulemaking. AHA and individual hospital systems have participated in litigation on specific HACRP methodology decisions.

Provider Reimbursement Review Board

Limited PRRB jurisdiction over HACRP. Most disputes proceed through CMS administrative process rather than PRRB.

Statutory limitation on review

Section 1886(p) includes specific limitation on review of HACRP determinations.

Recent CMS HACRP rulemaking

Annual IPPS final rule

Each year's IPPS final rule addresses HACRP including:

• Measure refinements
• Methodology adjustments
• Domain weighting
• Future direction signals

COVID-19 modifications

• Pandemic-era measure suppressions
• Adjustments for COVID-19 impact
• Continuing analysis

Future direction

• Potential health equity adjustment
• Refined risk adjustment
• Continued attention to methodology
• Potential consolidation with other quality programs

HACRP and the future of value-based hospital payment

HACRP is part of broader CMS strategy for value-based hospital payment.

Continuing refinement

• Annual IPPS rulemaking refines methodology
• Measure additions and refinements
• Domain weighting adjustments

Health equity focus

• Potential addition of equity adjustment
• Continued attention to social determinants of health
• Disparities reduction goals

Program consolidation potential

• MedPAC has recommended consolidation of HVBP/HRRP/HACRP
• Future legislation could restructure programs
• Continued evolution of value-based payment

Integration with broader value-based payment

• ACO programs
• Bundled payment programs
• Medicare Advantage
• Direct contracting

For Georgia hospitals, the trajectory means continued financial and operational attention to HACRP and related quality programs is essential to long-term financial health under Medicare.

Hospital strategic considerations

Hospital leadership considers HACRP in broader strategic context.

Patient safety reputation

HACRP performance affects:

• Care Compare public reporting
• Hospital reputation
• Patient choice
• Referral patterns
• Physician recruitment
• Payor contracting

Investment ROI

Investment in HAI prevention and patient safety has demonstrated ROI through:

• Avoided HACRP penalty
• Avoided direct cost of infections
• Reduced length of stay
• Reduced readmissions (also affecting HRRP)
• Improved patient outcomes
• Quality reputation benefits

Combined quality strategy

Effective hospital strategy addresses HACRP, HVBP, and HRRP together:

• Shared HAI measures (HACRP and HVBP)
• Shared patient safety focus
• Care coordination addressing readmissions and MSPB
• Integrated quality improvement infrastructure

Workforce considerations

Effective HACRP performance requires:

• Infection prevention specialists (CIC-certified)
• Hospital epidemiologists
• Patient safety officers
• Quality improvement specialists
• Clinical pharmacists (antimicrobial stewardship)
• Data analysts

Technology investment

HACRP-supporting technology includes:

• EHR-integrated infection surveillance
• NHSN reporting platforms
• Antimicrobial stewardship dashboards
• Patient safety event reporting
• Predictive analytics

Working with Brevy and Georgia resources

Brevy publishes regularly updated guides at brevy.com on Medicare, Medicaid, hospital quality, and related topics. We do not provide quality improvement consulting, infection prevention consulting, legal advice, or hospital operations advice. We provide research-grade content explaining the framework so that Georgia hospital teams, administrators, and Medicare beneficiaries can understand how Medicare quality-based payment programs work.

For hospital provider HACRP questions, contact Palmetto GBA at 1-866-238-9650, engage Georgia Medical Care Foundation for QIN-QIO support, or work with quality improvement and infection prevention consulting firms. For Medicare beneficiary questions about hospital safety, contact Medicare at 1-800-MEDICARE, GeorgiaCares SHIP at 1-866-552-4464, or use Care Compare at medicare.gov/care-compare.

Worked example 7: Wellstar Health System integrated HACRP approach

Wellstar Health System operates multiple hospitals across metro Atlanta. System-level HACRP approach includes:

• Centralized infection prevention infrastructure
• System-wide HAI surveillance and reporting
• System-wide antimicrobial stewardship
• System-wide patient safety programs
• Coordinated medical staff engagement
• Shared electronic health record (Epic)
• System-level data analytics
• Coordinated environmental services

Wellstar's system-level approach leverages scale for efficient infection prevention infrastructure while maintaining hospital-specific HACRP accountability. Individual hospitals (Kennestone, Cobb, Atlanta Medical Center, Paulding, North Fulton, etc.) report HACRP separately but benefit from system-level resources, sharing of best practices, and coordinated quality improvement.

Worked example 8: Piedmont Healthcare statewide HACRP coordination

Piedmont Healthcare operates hospitals across Georgia. Statewide HACRP coordination includes:

• System-wide infection prevention leadership
• Coordinated HAI surveillance protocols
• Standardized bundles across hospitals
• Coordinated antimicrobial stewardship
• System-wide patient safety standards
• Shared EHR supporting continuity and consistency
• System analytics for HAI and PSI tracking

Individual Piedmont hospitals report HACRP individually while benefiting from system-level resources and best practices. The Piedmont approach illustrates how multi-hospital integrated systems leverage scale to address HACRP.

Worked example 9: rural Georgia critical access hospital HACRP exclusion

Many rural Georgia hospitals are designated Critical Access Hospitals and therefore excluded from HACRP. CAH exclusion means:

• No HACRP measure calculation
• No HACRP penalty
• Continued cost-based reimbursement at 101 percent reasonable cost
• No HACRP financial effect

CAH status provides protection from HACRP financial effects but does not exclude rural hospitals from infection prevention attention. CAHs:

• Participate voluntarily in HAI surveillance
• Report Hospital Compare measures
• Engage GMCF QIN-QIO on infection prevention
• Implement infection prevention bundles
• Participate in Medicare Beneficiary Quality Improvement Project (MBQIP)

For rural Georgia communities, CAH HACRP exclusion preserves hospital viability while continuing to support infection prevention through technical assistance rather than financial mechanism.

Worked example 10: Northside Hospital community HACRP

Northside Hospital operates multiple campuses in metro Atlanta. Hypothetical HACRP scenario:

• Domain 1 (PSI-90): Z-score of -0.1 (slightly better than mean)
• Domain 2 (CDC NHSN HAI): Average z-score of -0.2 (better than mean, reflecting strong community hospital infection control)
• Total HAC Score: -0.15
• Northside ranks well above bottom quartile threshold
• No HACRP reduction
• Effect: $0 from HACRP

Northside's community hospital structure with substantial private patient population and selective surgical volume supports favorable HAI and patient safety performance.

HACRP measure technical detail

The HACRP measure specifications are highly detailed.

CAUTI measure technical detail

• Patients with indwelling urinary catheters
• Symptomatic UTI definition per NHSN
• Specific exclusions (e.g., asymptomatic bacteriuria)
• Catheter days as denominator
• Unit-specific application (ICU, ward)
• Risk adjustment for ICU type, hospital size, medical school affiliation

CLABSI measure technical detail

• Central line definition per NHSN
• Laboratory-confirmed bloodstream infection
• Specific exclusions (mucosal barrier injury LCBI in some contexts)
• Central line days as denominator
• Unit-specific application
• Risk adjustment

SSI measure technical detail

• Colon procedures (selected ICD-10 codes)
• Abdominal Hysterectomy procedures
• 30-day surveillance period (90 days for implant procedures)
• NHSN case definitions for superficial, deep incisional, organ/space SSI
• Risk adjustment using NHSN surveillance data

MRSA Bacteremia measure technical detail

• Hospital-onset definition (positive culture on day 4 or later of admission)
• Patient days as denominator
• Laboratory-identified
• Risk adjustment for community-onset MRSA prevalence

CDI measure technical detail

• Hospital-onset definition
• Patient days as denominator
• Laboratory-identified C. difficile
• Risk adjustment for community-onset CDI prevalence and other factors

PSI-90 composite technical detail

• Multiple component PSIs
• Each component risk-adjusted
• Composite calculated with specific weighting
• Excluded populations (e.g., obstetric, neonatal)
• Software application from administrative claims data

Hospital quality and safety culture

Effective HACRP performance ultimately depends on hospital quality and safety culture.

Just culture

"Just culture" is a foundational concept in patient safety:

• Distinguishes human error, at-risk behavior, and reckless behavior
• Encourages event reporting without punitive consequences for honest mistakes
• Holds individuals accountable for reckless behavior
• Focuses on system improvement rather than individual blame
• Supports learning from events

Event reporting infrastructure

• Confidential reporting systems
• Multiple reporting pathways
• Anonymous reporting option
• Timely review of reports
• Feedback to reporters
• Aggregation for trend analysis

Root cause analysis

• Formal RCA process for serious events
• Multidisciplinary teams
• System focus
• Action plans
• Implementation tracking
• Effectiveness assessment

Safety culture assessment

• AHRQ Surveys on Patient Safety Culture
• Periodic administration
• Unit-level results
• Comparison to benchmarks
• Action planning based on results

Leadership engagement

• Board safety committee
• CEO and senior leader engagement
• Walk-rounds
• Visible safety priority
• Resource allocation
• Compensation alignment

SDOH and HACRP

The relationship between social determinants of health (SDOH) and HACRP measures is documented in research literature.

Documented SDOH effects on HACs

• Patients with adverse social determinants experience higher HAI rates
• PSI-90 components correlated with patient socioeconomic factors
• Safety-net hospital populations face structural challenges

Absence of HACRP equity adjustment

Unlike HVBP (Section 3001(b) HEA effective FY 2024) and HRRP (Section 15002 Cures Act peer groups effective FY 2019), HACRP does not currently include equity adjustment. This is a continuing policy debate.

Future direction

• Continuing advocacy for equity adjustment
• MedPAC analyses
• Potential future rulemaking
• Continued attention to safety-net hospital impact

HACRP and Medicare Advantage interaction

Many Georgia Medicare beneficiaries are enrolled in Medicare Advantage rather than traditional Medicare. HACRP affects this dynamic.

Medicare Advantage hospital reimbursement

Medicare Advantage plans negotiate hospital rates separately from traditional Medicare. However, MA plans often:

• Reference Medicare rates as starting point
• Consider hospital quality performance
• Use HACRP and related public quality data
• Incorporate safety requirements in contracts

HAI and Star Ratings

HAI rates and patient safety performance contribute to MA Star Ratings. Hospital quality improvement supporting HACRP often supports MA contract performance.

Combined market pressure

Combined traditional Medicare and Medicare Advantage market pressure for safety creates substantial overall incentive for hospital quality improvement.

HACRP in the context of broader healthcare reform

HACRP is one component of the broader healthcare reform architecture under the ACA and subsequent legislation.

Hospital-Acquired Conditions Payment Provision

Separate from HACRP, Section 5001(c) of the Deficit Reduction Act of 2005 (Public Law 109-171) established the original Hospital-Acquired Conditions Payment Provision. This pre-existing program prohibits Medicare payment for selected hospital-acquired conditions. HACRP supplements rather than replaces the HAC Payment Provision.

Never Events

"Never Events" or Serious Reportable Events identified by the National Quality Forum represent broader patient safety policy framework. Many states have never events reporting requirements, and Medicare has nonpayment provisions for selected never events.

Joint Commission patient safety standards

The Joint Commission accreditation standards include extensive patient safety requirements that align with HACRP measures and broader patient safety expectations.

State patient safety programs

Many states including Georgia maintain patient safety reporting and improvement programs. These programs supplement federal HACRP and CMS HAI prevention efforts.

Research literature on HACRP effects

The research literature on HACRP effects continues to evolve.

HAI rate trends

Multiple analyses show HAI rates have declined substantially in the HACRP era:

• CAUTI rates declined approximately 20-30 percent
• CLABSI rates declined approximately 40-50 percent
• SSI rates declined modestly
• MRSA bacteremia declined
• CDI declined modestly

Causation difficult to disentangle from broader patient safety initiatives, CDC Targeted Initiatives, and other quality programs.

PSI-90 trends

PSI-90 trends are mixed and harder to interpret given coding practice changes and POA reporting evolution.

Penalty concentration research

Multiple studies confirm penalty concentration at:

• Safety-net hospitals
• Academic medical centers (especially major teaching)
• Hospitals serving complex patient populations
• Rural hospitals (when not CAH-excluded)

Equity research

Research documents disparities in HACRP penalty by patient population. The absence of equity adjustment is a continuing concern in policy literature.

Cost-benefit analysis

Research on infection prevention cost-benefit consistently demonstrates positive return on investment for HAI prevention programs through:

• Avoided HACRP penalty
• Avoided direct cost of infections
• Reduced length of stay
• Improved patient outcomes

CDC HAI prevention initiatives

Beyond HACRP, CDC operates multiple HAI prevention initiatives.

Targeted Initiatives

CDC Targeted Initiatives address specific HAI types:

• CAUTI prevention
• CLABSI prevention
• SSI prevention
• MRSA prevention
• CDI prevention
• Multidrug-resistant organism prevention

Compendium of Strategies

CDC publishes Compendium of Strategies to Prevent HAIs, updated periodically with evidence-based recommendations.

Antibiotic Use Initiative

CDC promotes antibiotic stewardship through:

• Core Elements of Hospital Antibiotic Stewardship Programs
• Tracking and reporting tools
• Education and training
• Network engagement

Vital Signs reports

CDC Vital Signs reports periodically address HAI topics and progress.

State patient safety in Georgia

Georgia operates state-level patient safety programs.

Georgia Department of Public Health

GDPH HAI surveillance includes:

• State-level HAI tracking
• Outbreak investigation
• Antibiotic resistance monitoring
• Coordination with CDC

Georgia Patient Safety Foundation

Various patient safety initiatives at state level support hospital quality improvement.

Georgia Hospital Association quality initiatives

GHA provides quality improvement support, advocacy, and collaboration opportunities for Georgia hospitals.

Comparison of HVBP, HRRP, and HACRP

The three quality-based payment programs differ substantially in structure.

HVBP (Section 1886(o))

• 2 percent withhold redistributed budget-neutral
• Four performance domains (Clinical Outcomes, Person and Community Engagement, Safety, Efficiency and Cost Reduction)
• Achievement AND improvement scoring with higher counted
• Total Performance Score 0-100
• Linear exchange function translates TPS to payment
• Health Equity Adjustment (Section 3001(b)) effective FY 2024
• Hospitals can have net positive or negative effect

HRRP (Section 1886(q))

• Up to 3 percent reduction
• Six condition-specific measures (AMI, HF, PN, COPD, THA/TKA, CABG)
• Excess Readmission Ratio against expected
• No improvement scoring (achievement only)
• Section 15002 Cures Act peer groups effective FY 2019
• Penalty only (no upside)

HACRP (Section 1886(p))

• 1 percent reduction for bottom quartile
• Six HAC measures (CAUTI, CLABSI, SSI, MRSA, CDI, PSI-90)
• Total HAC Score winsorized z-score methodology
• No improvement scoring (achievement only)
• No health equity adjustment currently
• Penalty only (no upside)

Combined design

The three programs together create:

• Approximately 6 percent of Medicare IPPS revenue at risk
• Multiple quality dimensions addressed
• Achievement and improvement incentives (HVBP)
• Penalty pressure on specific outcomes (HRRP and HACRP)
• Public reporting transparency

Critique of combined design

Critics argue the combined design:

• Concentrates penalties at safety-net and teaching hospitals
• Creates measurement burden without proportional outcome benefit
• Includes overlapping measures
• Has inconsistent equity treatment

Defenders argue the combined design:

• Creates substantial financial incentive for quality improvement
• Addresses multiple quality dimensions
• Has driven measurable improvement in HAI, readmission, and other quality measures
• Continues to evolve toward better methodology

HACRP and Empire Health Foundation v Becerra implications

The Empire Health Foundation v Becerra decision (142 S. Ct. 2354, 2022) addressed Medicare DSH SSI fraction methodology but illustrated broader principles about CMS interpretation of complex Medicare statutes. The decision has implications for HACRP and other quality programs:

• CMS interpretive authority on complex statutory terms
• Judicial deference to CMS rulemaking under Chevron
• Importance of notice-and-comment rulemaking for substantive changes
• Limited judicial review of specific hospital determinations

Hospital challenges to HACRP methodology must proceed through judicial review of rulemaking rather than individual case appeal.

AHA litigation history on HACRP

The American Hospital Association has participated in various litigation related to HACRP and similar programs:

• Methodology challenges
• Risk adjustment concerns
• Equity considerations
• Data and reporting issues

While few cases have produced fundamental changes to HACRP, the litigation has informed CMS rulemaking and policy debate.

HACRP impact on Medicare beneficiary experience

For Medicare beneficiaries, HACRP creates pressure for hospital safety improvement.

Direct beneficiary effects

• Reduced infections during hospitalization
• Reduced complications during hospitalization
• Better patient safety culture
• Better infection prevention

Indirect beneficiary effects

• Improved hospital quality reputation
• Care Compare transparency
• Informed hospital choice
• Beneficiary advocacy

Beneficiary safety expectations

Medicare beneficiaries reasonably expect hospitals to:

• Prevent hospital-acquired infections
• Prevent avoidable complications
• Maintain high patient safety standards
• Communicate openly about safety
• Address concerns promptly

HACRP creates financial reinforcement for hospital investment in meeting these expectations.

Practical implications for Georgia hospital administrators

For Georgia hospital administrators, HACRP implications include:

Annual HACRP review

• Review Hospital-Specific Report during preview period
• Identify any data accuracy or coding errors
• Verify NHSN data submission completeness
• Assess Total HAC Score and quartile position
• Plan response if approaching bottom quartile

Quality improvement strategy

• Comprehensive HAI prevention program
• Patient safety culture
• Antimicrobial stewardship
• Infection prevention infrastructure
• Coordination with HVBP and HRRP

Financial planning

• Anticipate HACRP impact
• Factor into Medicare revenue projections
• Plan for combined HVBP/HRRP/HACRP effect
• Budget for quality improvement investment

Governance attention

• Board safety committee review
• Senior leadership engagement
• Medical staff engagement
• Continuous improvement focus

Coordination across quality programs

• Integrated quality strategy
• Shared measure improvement
• Coordinated resources
• Unified team approach

Practical implications for Georgia Medicare beneficiaries

For Georgia Medicare beneficiaries, HACRP implications include:

Hospital choice

• Use Care Compare for hospital quality information
• Consider HACRP penalty status as one factor
• Consider broader hospital quality profile
• Discuss with primary care physician

Hospital admission safety

• Ask about infection prevention protocols
• Ask about hand hygiene compliance
• Be aware of catheter and line management
• Understand discharge instructions

Advocacy

• Beneficiary advocacy organizations engage on HACRP
• Center for Medicare Advocacy
• Medicare Rights Center
• AARP

HACRP and the social determinants of health

Beyond the direct equity concerns, HACRP intersects with social determinants of health in multiple ways.

Patient population effects

Patients with adverse social determinants experience:

• Higher baseline complication risk
• Higher infection susceptibility
• More complex medical situations
• Greater discharge support needs

Hospital response

Hospitals serving disadvantaged populations may:

• Invest more in infection prevention infrastructure
• Develop targeted patient education
• Engage community health workers
• Partner with community organizations
• Implement enhanced discharge planning

Continuing policy debate

The absence of HACRP health equity adjustment is a continuing policy debate. Section 3001(b) HEA for HVBP and Section 15002 Cures Act peer groups for HRRP provide models for potential future HACRP reform.

Antimicrobial stewardship deep dive

Antimicrobial stewardship is one of the most important interventions for CDI reduction and broader infection control.

Core elements of hospital antibiotic stewardship

CDC has defined Core Elements of Hospital Antibiotic Stewardship Programs:

• Leadership commitment with dedicated resources
• Accountability with single leader responsible
• Pharmacy expertise (clinical pharmacist with antimicrobial expertise)
• Action including specific interventions
• Tracking of antibiotic use and outcomes
• Reporting on antibiotic use to staff
• Education for staff

Specific interventions

Effective stewardship interventions include:

• Prospective audit and feedback on antibiotic prescribing
• Formulary restriction with prior authorization
• Antibiotic time-outs (review of antibiotic therapy at 48-72 hours)
• Pharmacy review of antibiotic indications
• Microbiology-pharmacy collaboration
• Antibiotic timeout cards
• De-escalation protocols
• Duration optimization

Tracking and reporting

• Days of therapy (DOT) tracking
• Defined daily dose (DDD) tracking
• Antibiotic use ratios
• Resistance pattern monitoring
• Outcome tracking
• Feedback to prescribers
• Public reporting (NHSN AUR option)

Stewardship effects on CDI

Effective antimicrobial stewardship reduces:

• Inappropriate antibiotic use
• Broad-spectrum antibiotic use when narrower options appropriate
• Unnecessary antibiotic duration
• CDI risk
• Multidrug-resistant organism emergence

Environmental services and HAI

Environmental services play critical role in HAI prevention, particularly for CDI and multidrug-resistant organisms.

Cleaning protocols

• Standardized cleaning protocols
• Specific products for CDI (sporicidal agents)
• Discharge cleaning protocols
• High-touch surface emphasis
• Patient room cleaning protocols

Monitoring and verification

• Adenosine triphosphate (ATP) testing
• Fluorescent marker monitoring
• Direct observation
• Audit and feedback to environmental services staff
• Continuous improvement

UV light technology

Some hospitals deploy UV-C light technology for terminal cleaning to supplement traditional cleaning, particularly for CDI rooms and other high-risk situations.

Hydrogen peroxide vapor

Some hospitals use hydrogen peroxide vapor for terminal cleaning in specific situations.

Disclaimers

This article is for educational purposes only and does not constitute legal, financial, quality improvement, infection prevention, audit, compliance, or medical advice. HACRP rules are subject to change through CMS rulemaking, congressional action, and ongoing administrative guidance. The information in this article reflects rules in effect as of May 2026. Always verify current HACRP rules at cms.gov and through current measure specifications before making decisions.

Brevy is not affiliated with CMS, CDC, AHRQ, HHS, GMCF, Palmetto GBA, MedPAC, AHA, or any hospital. Brevy is an eldercare research and information company. We accept no compensation from healthcare providers, hospitals, insurance carriers, audit firms, consulting firms, or other parties.

::: cta

Get help with Medicare HACRP and hospital quality questions in Georgia

Federal agencies

• Medicare: 1-800-MEDICARE (1-800-633-4227) for general questions
• CMS Provider Enrollment: 1-866-484-8049 for enrollment
• HHS-OIG hotline: 1-800-447-8477
• CDC: cdc.gov for HAI prevention guidance
• AHRQ: ahrq.gov for patient safety resources

Georgia state agencies

• Georgia Department of Community Health: 1-866-211-0950
• Georgia Department of Public Health: HAI surveillance support
• GeorgiaCares SHIP: 1-866-552-4464 for Medicare beneficiary counseling

Quality Improvement Organization

• Georgia Medical Care Foundation (GMCF): Quality Innovation Network-QIO for Georgia, free hospital quality improvement technical assistance

Medicare Administrative Contractor

• Palmetto GBA: 1-866-238-9650 for provider questions

Legal and consumer assistance

• Atlanta Legal Aid: 404-377-0701
• Georgia Legal Services: 1-800-498-9469
• Medicare Rights Center: 1-800-333-4114

Quality and infection prevention resources

• Care Compare: medicare.gov/care-compare for hospital quality information
• CDC NHSN: National Healthcare Safety Network reporting and resources
• AHRQ: Agency for Healthcare Research and Quality patient safety resources
• APIC: Association for Professionals in Infection Control
• SHEA: Society for Healthcare Epidemiology of America

Healthcare financial management

• Healthcare Financial Management Association (HFMA) Georgia Chapter
• Georgia Hospital Association: 770-249-4500

Healthcare policy resources

• MedPAC: Medicare Payment Advisory Commission analyses
• AHA: American Hospital Association advocacy
• IHI: Institute for Healthcare Improvement
• Patient Safety Movement Foundation

Additional resources

• 211 Georgia: dial 211 for community resources
• Eldercare Locator: 1-800-677-1116
• The Leapfrog Group: hospital safety information

Brevy

• Brevy resources: brevy.com for additional guides on Medicare, Medicaid, hospital quality, and eldercare topics :::