The CMS new quality-reporting program submitted to Congress would reduce base Medicare payments to hospitals, with hospitals buying back that money through high performance.
Under this new value-based purchasing program, a percentage of the hospitals base operating payment for each discharge or DRG payment would be contingent on the hospitals actual performance on a specific set of measures, the CMS explained in a report that details the new program.
One way to phase in the program would be to reward incentives based entirely on reporting the first year; then, in the second year, base rewards on 50% reporting, 50% performance; and in the third year, move entirely to a system of performance incentives, Kerry Weems, the CMS acting administrator, told reporters during a teleconference.
Such a program would require congressional approval. The hope is the Senate will include these new measures in Medicare legislation next week, Weems said.
The program would build on the current hospital quality-reporting program begun in 2005. The current system pays according to the volume of procedures rather than rewarding hospitals for delivering on evidence-based quality measures and improved patient outcomes, said Blair Childs, senior vice president of public affairs with Premier healthcare alliance, in a written statement. The new program would move hospitals to a system that rewards the best performers, Childs said.
The report on value-based purchasing was supposed to be released months ago. This is a complex area, and we wanted to make sure what we sent to Congress was right, Weems said. (For more on CMS payment issues, please listen to Modern Healthcare's Executive Interview podcast with Weems.) -- by Jennifer Lubell
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