The CMS and Premier officially kicked off their pay-for-quality demonstration project, which will reward top-performing hospitals with bonus Medicare payments while eventually penalizing those facilities that perform the worst. CMS Administrator Tom Scully called the project a "huge step forward" in quality improvement. Under the demonstration, participating hospitals performing in the top 10% in quality in five clinical areas will receive a 2% bonus on their Medicare payments. Hospitals in the second 10% will receive a 1% bonus. In the third and final year of the demonstration project, hospitals in the lowest performing 10% will be hit with a 2% reduction in Medicare payments. The next 10% of poorest performing hospitals would see their payments decline 1%. Premier CEO Richard Norling said he expects at least 300 hospitals to voluntarily participate in the initiative. -- by Jeff Tieman
CMS, Premier launch pay-for-quality program
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