Overview
The MHAC program was implemented in state fiscal year (FY) 2011 to link hospital payment with hospital performance using 3M’s Potentially Preventable Complication (PPC) classification system. PPCs are post-admission complications that may result from hospital care and treatment, such as accidental puncture/laceration during an invasive procedure or infections related to central venous catheters. In contrast to complications resulting from underlying disease progression, PPCs are considered potentially preventable. 3M identified 65 PPC measures through secondary diagnosis codes not present when patients is admitted to hospital.
History
The initial methodology for the MHAC program estimated the number of PPCs above the statewide average, or “excess PPCs,” for each hospital and calculated the percentage of inpatient hospital revenue associated with these excess PPCs. Hospitals with higher PPC costs than the statewide average received penalties and hospitals with lower PPC costs than the statewide average collected rewards. Because the initial program was required to be revenue neutral, this process resulted in unpredictable payment adjustments as amount of revenue available for rewards was determined by the penalties assessed within the program.
Current Program
On January 1, 2014 the State of Maryland entered into a new All-Payer Model demonstration contract with the Center for Medicare and Medicaid Innovation. This new contract included a requirement that the State of Maryland reduce the rate of PPCs by 30% over the 5-year contract term. To achieve this goal, the HSCRC modified the MHAC program's guiding principles and methodology. These are the revised guiding principles for all performance-based programs in the state:
- Payers: The program must improve care for all patients, regardless of payer.
- Measures: The program must utilize measures that are at least as stringent as the Medicare national program. These measures should be high volume, high cost, opportunity for improvement, and should be areas of national focus.
- Rewards/Penalties: The program must include rewards/penalties that have at least as much potential impact on hospital inpatient revenue as the Medicare national program (“revenue at risk”) and do not penalize high performing hospitals for lack of improvement.
- Performance Targets: The program should identify predetermined performance targets and financial impact, as well as an annual improvement target based on previous trends and progress towards achieving the All-Payer Model goals, with the expectation of continuous quality improvement.
- Program design should encourage cooperation and sharing of best practices.
- Tracking/feedback: Hospitals should have the ability to track their progress during the performance period, and HSCRC should continue to provide a mechanism on an ongoing basis to receive input and feedback from the industry and other stakeholders to refine and improve the measurement and methodologies.
Key Program Components of Current MHAC Methodology
- Determine hospital scores based on observed-to-expected PPC ratios rather than excess PPC costs. The expected number of PPCs for each hospital is calculated by multiplying the base year statewide PPC rate by the number of discharges at each hospital, adjusted for diagnosis and severity of illness categories.
- Prioritize PPCs according to All-Payer Model priorities by grouping PPCs into tiers and weighting them according to their level of priority.
Key Program Components of Current MHAC scoring
- Measure hospital performance as the better of attainment or improvement to determine payment adjustments.
- Determine payment rewards/penalties through a preset point scale developed with base year scores. This approach improves the financial predictability of the program and allows for statewide rewards to exceed penalties to adequately reward hospitals with better or improved performance.
- Focus payment adjustments on higher and lower performing hospitals by making adjustments only at the top and bottom end of the score distribution.
For detailed webinar on HSCRC Quality Initiatives, please visit the
Quality Overview Page.
Key MHAC Policy Documents
RY 2020
*Performance Period data is updated on a monthly basis with preliminary data, and on a quarterly basis with final data. Reports are available on the CRS Portal.
RY 2019
* Designated hospital employees can access mid-year data through the CRISP Reporting Services (CRS) Portal. Otherwise, this data is available upon request; please contact HSCRC Quality at
hscrc.quality@maryland.gov.