Senators Float Pay for Performance

December 5th, 2008 | Sources: MedPageToday

Senators Max Baucus and Charles Grassley are kicking around the idea of tying Medicare Part A reimbursement to hospital performance on a set of quality measures.

They mentioned myocardial infarction, heart failure, and several surgical causes of admission as candidates for the program, meaning that 20% or more of Medicare admissions could be affected.

The so-called value-based purchasing program would close the loop on Medicare’s pay-for-reporting program which began 5 years ago, according to the 2 senators. In the older program, hospitals earn bonus reimbursement by tracking and reporting performance against pre-established quality indicators.

In value-based purchasing, hospitals receive grades according to the degree to which they follow best practice guidelines, and bonuses are assigned accordingly. The scheme can be tweaked to reward improving performance over time.

“Paying for the quality, not just the volume, of care that patients receive will improve patient outcomes and reduce costs in our health care system,” Baucus told MedPageToday.

But the American Hospital Association wasn’t so sure. “While we support moving forward with a value-based purchasing plan, we remain concerned about many of the details,” said Tom Nickels, its senior vice president for federal relations.

Nickels added in a press release, “Issues such as the…total amount of payments at risk, and the process for identifying measures need to be addressed before a workable program can be adopted.”

If things get serious on value-based purchasing, Medicare should coordinate its pilot with deployment of its new ICD-10 coding system. Value-based purchasing only makes sense after all, if it’s running on good data.


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