Two healthcare consultants gave an excruciatingly detailed breakdown of the CMS' new value-based purchasing program for Medicare that left about 200 healthcare fiscal officers muttering under their breaths about how much work they'll have to do to avoid just a 1% hit on Medicare payments under the program. The consultants served up their compliance headache in Orlando this morning during a presentation at the Healthcare Financial Management Association's Annual National Institute. Presenting were Dr. Robert Williams and Joseph Becht Jr., both with Deloitte. Williams is based in McLean, Va., and Becht works out of Deloitte's Richmond, Va., office.

Under the program, Medicare will shave 1% off its payments to all hospitals starting in fiscal 2012, which starts Oct. 1. The money—estimated to be about $850 million that year—will then be redistributed to hospitals that meet specific performance criteria. The annual deduction and subsequent distribution will increase slightly each year through fiscal 2017. (For more on the subject, please see Maureen McKinney's cover story Medicare value-based purchasing plan draws scrutiny.)

Williams and Becht walked the attendees through page after page of the clinical-performance data and patient-satisfaction data that will need to be collected to forward to the CMS. The agency, in turn, will use that data to calculate a composite hospital performance score to determine the hospitals that get their 1% back and a bonus at the expense of lower-performing hospitals. The pair reminded the audience that the data-collection period starts in three days on July 1, eliciting a number of groans from the attendees.

“Just what you need is more paperwork, right?” Becht said.

Becht also told the attendees that they will have to calculate and create a Medicare reserve fund to funnel off 1% of their payments in case they fail to meet the performance criteria and have to pay that money back if they don't qualify for a bonus.

Williams expressed his concern that the 1% is not enough to raise the eyebrows of senior hospital management, which will fail to give hospital financial departments the resources that they need to cope with the new program.

The attendees peppered Williams and Becht with more than a dozen questions, some of which they weren't able to answer, they said, because the CMS hasn't worked out some of the details.

“You still have time to influence this,” Becht said.

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