Maryland Hospital Acquired Conditions (MHAC)


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.


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 2021

​Communications ​and Memos ​ ​
​Type Document Title Date
​Final Policy RY 2021 Final MHAC Policy
Mar 15, 2019
Data Workbooks​​ ​ ​
​Base Period Data

​Performance Period Data*

*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 2020

​Communications ​and Memos ​ ​
​Type Document Title Date
​Final Policy RY 2020 Final MHAC Policy
Feb 26, 2018
Memos​ RY 2020 Final MHAC Memo Mar 02, 2018
Data Workbooks​​ ​ ​
​Base Period Data RY 2020 Base Period Workbook Mar 02, 2018​​
​Performance Period Data*

*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

​Communications ​and Memos ​ ​
​Type Document Title Date
​Final Policy RY 2019 MHAC Final Policy.pdf ​Mar 8, 2017
Memos​ RY 2019 MHAC Policy Memo.pdf
RY 2019 MHAC Policy Memo - Clinical Logic Update
​Apr 25, 2017
Jul 13, 2017
Data Workbooks​​ ​ ​
​Base Period Data MHAC Base Period Workbook RY 2019​ ​​Apr 25, 2017
​Performance Period Data*
* 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​.

RY 2018

​Communications and Memos ​ ​
​Type Document Title Date
​Final Pol​icy RY18 MHAC Final Policy Recommendation
Jan 13, 2016
Memos​ RY 2018 MHAC Program and Data Update- PPC Assignment Logic Changes

RY 2018 MHAC Program Summary

RY18 Quality Program R​evenue Adjustments memo.pdf 
Sep 23, 2016

Sep 2, 2016

May 12, 2017
Data Workbooks​​ ​ ​
​Base Period Data RY18 MHAC Base Period Workbook ​​Jun 15, 2016
Results MHAC Summary CY16-01 to CY16-12 FINAL.xlsx​ ​Mar 08, 2017

Please click here to email questions or inquiries about HSCRC’s Quality Improvement Initiatives or contact Dianne Feeney by telephone at 410-764-2605.​