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HAC Reduction Program Penalties: An Undue Burden on Essential Hospitals?

This research brief explores patient complexity and socioeconomic status in the context of the federal Hospital Acquired Conditions (HAC) Reduction Program. It concludes that as this and other incentive programs mature, policymakers and researchers should carefully consider inequalities in how these programs apply penalities – and the unique needs of vulnerable patients and the essential hospitals that care for them.

Research Brief – HAC Reduction Program Penalties: An Undue Burden on Essential Hospitals?


  • The Hospital Acquired Conditions Reduction Program creates financial incentives for hospitals to reduce hospital-acquired infections, injuries, and other adverse events.
  • The program’s application of penalties to certain add-on payments could compound resource shortages at essential hospitals.
  • Previous findings show a similar impact by other incentive-based programs, such as the Value Based Purchasing and Hospital Readmissions Reduction programs.
  • Hospitals with more than 400 beds, teaching hospitals, those treating highly complex patients, and essential hospitals are more likely to receive penalties.
  • There is no evidence penalties aligned with outcomes at these hospitals.


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