Hospital-Acquired Condition (HAC) Reduction Program
A CMS program that reduces Medicare payments by 1% for the quartile of hospitals with the highest rates of hospital-acquired conditions, including infections and preventable injuries.
Hospital-Acquired Condition (HAC) Reduction Program is a term from U.S. hospital cost and quality reporting — the field that produces the CMS Hospital Compare program, the Medicare Inpatient Payment files, and the patient-facing tools built on top of them. The definition below covers what the term means in CMS files, what it does not mean, and how it interacts with the other measures CMS publishes. On the LakeQuality value rubric, Hospital-Acquired Condition (HAC) Reduction Program is one of the inputs (directly or indirectly) to the combined cost-and-quality grade. Understanding how the term is computed at CMS — what counts and what does not — is part of reading hospital pages defensibly.
Each hospital page on LakeQuality surfaces the specific Hospital-Acquired Condition (HAC) Reduction Program value for that facility (when CMS reports one), so the general definition here translates into a concrete data point on the per-hospital pages you actually use.
How It Works
The Hospital-Acquired Condition Reduction Program (HACRP) was established by Section 3008 of the Affordable Care Act and has been in effect since FY2015. It penalizes the worst-performing quartile (25%) of hospitals on hospital-acquired conditions by reducing all Medicare inpatient payments by 1% for the following fiscal year, a larger penalty per affected hospital than HRRP in many cases because it applies to every Medicare discharge rather than to excess readmissions only. The program uses two measurement domains: Domain 1 is the CMS Patient Safety and Adverse Events Composite (PSI-90), a claims-based measure combining 10 individual Patient Safety Indicators including pressure ulcers, iatrogenic pneumothorax, postoperative respiratory failure, postoperative sepsis, perioperative hemorrhage, and accidental punctures. Domain 2 is NHSN (National Healthcare Safety Network) healthcare-associated infection measures: central line-associated bloodstream infection (CLABSI), catheter-associated urinary tract infection (CAUTI), surgical site infection for colon and hysterectomy (SSI colon, SSI abd hyst), MRSA bacteremia, and Clostridioides difficile (C. diff) infection. Each hospital receives a Total HAC Score on a scale where higher is worse. The worst-performing quartile (approximately 750-800 hospitals per year) receives the 1% payment reduction. In FY2024, 764 hospitals were penalized for an aggregate payment reduction of roughly $350 million. Large teaching hospitals and safety-net hospitals have been penalized disproportionately, leading to criticism and a peer grouping adjustment. Hospitals respond through infection prevention bundles (central line insertion checklists, catheter necessity reviews, chlorhexidine bathing, antimicrobial stewardship), reducing CLABSI rates by over 50% nationally since 2008.
Related Terms
- CMS Star Rating (Hospital Overall Rating), A 1-to-5 star rating assigned by CMS to each hospital based on 46+ quality measures, covering mortality, safety, readmissions, patient experience, and timely care.
- Leapfrog Hospital Safety Grade, A letter grade (A-F) assigned twice yearly to U.S. hospitals by The Leapfrog Group, a nonprofit founded by large employers, based on 30+ patient safety measures.
- Readmission Rate, The percentage of patients who return to the hospital within 30 days of discharge for the same or related condition, a key quality metric tracked by CMS.
- Hospital Readmission Penalty (HRRP), A Medicare payment penalty of up to 3% applied to hospitals with excess 30-day readmissions for six tracked conditions, administered through the Hospital Readmissions Reduction Program.
- Mortality Rate (Hospital), The rate of patient deaths within 30 days of hospital admission for specific conditions, risk-adjusted to account for differences in patient severity.
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About This Definition
This definition is part of the HospitalCostData Hospital Pricing Glossary, 47 terms explaining hospital costs, quality ratings, and healthcare billing. Written for patients, journalists, researchers, and healthcare professionals.