Over the past decade, we have seen a transformation in the culture of healthcare in the U.S., with a greater focus on quality, transparency and efficiency. As payers and patients have increasingly become vocal stakeholders and partners in achieving these goals, we have now entered an accelerated period of change. Healthcare-associated infections have been a key target of these efforts, particularly since many are potentially preventable and result in significant morbidity and costs to the healthcare system. As the largest national payer, CMS has led the way in the movement to align quality and cost. In 2008, CMS implemented financial penalties (i.e. sticks) as a means for improving quality for Medicare patients through the hospital-acquired conditions (HAC) policy. This policy ceased additional payments for HACs, including certain healthcare- associated infections, which were deemed reasonably preventable. In our currently funded R01 grant, we are evaluating the impact of the 2008 HAC policy on rates of healthcare-associated infections in the U.S. In brief, we found the HAC policy had no impact on true infection rates in NHSN; however, we did demonstrate sudden declines in billing rates for certain HAIs shortly after policy implementation. CMS has now expanded these financial penalties to include Medicaid patients by requiring that states implement the same nonpayment policies for Health Care Acquired Conditions (HCAC) effective July 1, 2012. However, the greatest financial penalties for healthcare-associated infections will be implemented via the CMS Hospital Value Based Purchasing (VBP) program, which seeks to reward and penalize the highest and lowest performing hospitals on a range of quality measures, including NHSN data, by up to 2% of their entire base-operating budget, which will be among the largest financial penalties seen to date. In this competing renewal, we seek to assess the ongoing serial impact of these financial penalties on health outcomes, as measured by billing rates of infection and prospective NHSN surveillance rates. Our specific aims are: 1. To evaluate the impact of the Medicaid health care acquired conditions (HCAC) policy on billing rates for healthcare-associated infections (HAI) among Medicare, Medicaid and privately insured patients. 2. To evaluate the impact of the CMS Value-Based Purchasing (VBP) program on HAI rates reported to the National Healthcare Safety Network (NHSN). 3. To examine differences in hospital performance rankings for HAIs using billing vs. NHSN data and to explore factors associated with discordant rankings over time. 4. To explore the impact of financial penalties on HAI rates for hospitals that care for a high proportion of poor or minority patients.