Two pay-for-performance programs in the Affordable Care Act became effective on Monday—one relating to value-based purchasing and another targeting readmission rates. Both programs enable Medicare to reward hospitals for providing more efficient and higher quality care and penalize those hospitals that don’t measure up.
Under the value-based purchasing program, Medicare will pay hospitals based on performance on a set of standard clinical quality measures and also on surveys of patients’ experience. CMS will withhold one percent of Medicare payments to about 3,000 acute care hospitals over the next year and redistribute that money to the best performing hospitals. The percentage will rise to two percent by 2016.
Under the readmission rate program, CMS will take up to one percent from Medicare payments to hospitals with high readmission rates. For now, hospitals are only being measured on three medical conditions: heart attacks, heart failure and pneumonia. Penalties will gradually rise until three percent of Medicare payments to hospitals are at risk—and four additional treatments/conditions may be added: joint replacements, stenting, heart bypass and treatment of stroke.
Some experts question whether the penalties and rewards are sufficient to encourage hospitals to make the necessary changes to delivery of care. Others have questioned whether the readmissions program should be separate from the value-based purchasing program. An executive at Premier Healthcare Alliance recently noted that the readmissions program “should be part of the value-based purchasing program, with fixed targets that hospitals can try to meet, rather than past performance.”
(Sources: American Health Lawyers Association Health & Life Sciences Law Daily, October 1, 2012; Associated Press, “Medicare fines over hospitals’ readmitted patients,” September 30, 2012; Politico, “ACA tries carrots, sticks on hospitals,” October 1, 2012.)
Marian Jennings and Daniel Grauman will be discussing value-based purchasing and other delivery/payment components of the Affordable Care Act at the iProtean Symposium, October 10-12 in San Diego, CA.
Upcoming iProtean courses will feature these issues as well as issues related to quality, governance and mission & strategy. Look for these new courses in the next few months.
For a complete list of iProtean courses, click here.
iProtean Symposium & Workshop
Mark the Date!! October 10 – 12, 2012 at The Lodge at Torrey Pines, La Jolla, CA. Faculty: Barry Bader, Monte Dube, Esq., Lisa Goldstein, Dan Grauman, Marian Jennings and Brian Wong, M.D. For more information, click here.