CMS Launches Hospital Pay-for-Performance Initiatives Under ACA
On Monday, CMS is implementing two programs under the Affordable Care Act that target quality of care and readmission rates in hospitals as part of a broader effort by the Obama administration to improve care quality while aiming to save taxpayer dollars, Politico reports.
According to Politico, the programs represent the largest effort to date to shift hospital payments toward a pay-for-performance model.
Details of Hospital Value-Based Purchasing Program
Under the Hospital Value-Based Purchasing Program, Medicare over the next 12 months will withhold 1% of its regular reimbursements to about 3,000 acute care hospitals. That money -- totaling about $850 million -- will be redistributed to hospitals over the year if they meet high performance standards based on certain clinical quality measures and patient satisfaction survey results (Norman, Politico, 10/1).
Some hospitals could recoup a portion of the payments that were withheld, while others could break even or receive extra funds, according to Kaiser Health News' "Capsules" (Rau, "Capsules," Kaiser Health News, 10/1).
Details of Hospitals Readmissions Reductions Program
Under the second program, known as the Hospitals Readmissions Reductions Program, CMS will withhold up to 1% of regular reimbursements for hospitals that have too many patient readmissions within 30 days of discharge because of certain medical conditions. At the beginning, hospitals will be measured on three conditions: heart attack, heart failure and pneumonia, the AP/Contra Costa Times reports.
According to government estimates, about two-thirds of hospitals serving Medicare beneficiaries will face penalties averaging around $125,000 per facility in 2013 (Alonso-Zaldivar, AP/Contra Costa Times, 10/1). Medicare expects hospitals will lose about $280 million in payments this year as a result of the program. The maximum penalty increases from a 1% payment reduction this year to 2% next year and 3% in October 2015, "Capsules" reports ("Capsules," Kaiser Health News, 10/1).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.