The Hospital-Acquired Conditions Reduction Program – Hospitals Impacted

We have now been familiar with the Hospital-Acquired Condition Reduction Program (HACRP) for seven years (how time flies). Under the Affordable Care Act (ACA), the Centers for Medicare and Medicaid Services (CMS) reduces payments to hospitals based on their performance on measures of hospital-acquired conditions. The program encourages hospitals to implement best practices to reduce their rates of healthcare associated infections and improve patients’ safety.

According to the Centers for Disease Control and Prevention (CDC), one in every 31 hospitalized patient has an infection that was contracted during their hospital stay. The hospital acquired conditions (HACs) are considered avoidable and often fall into the “complication” category. These payment reductions are from mid-2017 to 2019 hospital inpatient data. A 1-percent payment reduction applies to the overall Medicare payment amount for all Medicare fee-for-service discharges during FY 2021 (that is, from October 1, 2020, to September 30, 2021). For a list of hospitals impacted (estimated to be 774 hospitals) on HAC with 2021 payment reductions go to:

The following are some of the HAC quality measures for 2021:

  • CMS PSI (Patient Safety and Adverse Events Composite)
  • CLABSI (Central Line-Associated Bloodstream Infection
  • SSI (Surgical Site Infection for Abdominal Hysterectomy and Colon Procedures)
  • MRSA (Methicillin-resistant Staphylococcus aureus) bacteremia
  • CDI (Clostridium difficile Infection)

Behind each measure is a list of specific ICD-10-CM codes that is linked to the HAC. Using evidence-based medicine the list of HACs is created. HAC 01 is related to “Foreign Object Retained After Surgery “. Within this HAC are several ICD-10-CM codes (approximately 53) that represent HAC conditions, ie., Unspecified complication of foreign body accidentally left in body following surgical operation, initial encounter, and Adhesions due to foreign body accidentally left in body following surgical operation, initial encounter. CMS lists all the HACs and ICD-10-CM codes on their website for easy access. The FY 2021 v38 ICD-10 Hospital Acquired Condition (HAC) List is located under the Downloads section at:

CMS sends confidential Hospital-Specific Reports (HSRs) to hospitals. CMS gives hospitals 30 days to review their HAC Reduction Program data, submit questions about the calculation of their results, and request corrections to the scoring. The payment reduction occurs when CMS pays hospital claims.

Another great resource on the HACRP for 2021 and the scoring is posted on the following website: FY 2021 Hospital-Acquired Condition (HAC) Reduction Program (

In addition, each inpatient hospital claim will also make a determination of whether that specific ICD-10-CM was “present of admission” – POA or Not present. HIM Coding professional translate the documentation into the ICD-10-CM/PCS codes and also make a determination on the status for POA, either yes, no, undetermined, etc. That determination is made through a medical record documentation review, coding and applying the POA guidelines.

Hospitals should be monitoring their HACs on a monthly basis and conducting documentation and coding validation. The documentation and coding for a HAC diagnosis/ condition that occurred during a hospital inpatient stay is vital to accurate reporting of HACs and whether the hospital will have a payment reduction in a future year. In addition, having a clinical documentation integrity (CDI) process (program) in place to review and validate the presence or absence of HAC documentation concurrently is critical. Engage your CDI staff and build collaboration with HIM Coding staff regarding HACs. A recommendation is to have a strong coding compliance plan and program that includes conducting ongoing audits and that would focus on HAC documentation and ICD-10-CM codes.

Subscribe to our MRA Newsletter

Bringing peace of mind to healthcare since 1986

Share this post with your friends

You may be interested in...

AHIMA Approved

This program has been approved for continuing education unit(s) (CEUs) for use in fulfilling the continuing education requirements of the American Health Information Management Association (AHIMA). Granting of Approved CEUs from AHIMA does not constitute endorsement of the program content or its program provider.