CMS Gets Positive Results from Hospital P4P Demo

Findings from CMS’ demonstration project mean pay for performance programs likely to spread

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HOSPITALS IN THE FEDERAL PAY FOR performance demonstration project showed significant improvement in delivering quality in five clinical areas, according to a new report from the Centers for Medicare & Medicaid Services (CMS).

CMS said the second-year results from its Premier Hospital Quality Improvement Demonstration project means that 115 top-performing hospitals will earn $8.7 million in quality payments this year.

“The Premier hospital demonstration is showing that even limited additional payments, focused on supporting evidence-based quality measures, can drive across-the-board improvements in quality, fewer complications, and reduced costs,” said CMS Acting Administrator Leslie V. Norwalk, Esq.

The Premier project involves more than 250 hospitals. Participating hospitals report process and outcome measures based on 30 quality indicators in five clinical areas. Those areas are acute myocardial infarction (AMI), heart failure, coronary artery bypass graft (CABG), pneumonia, and hip and knee replacement. Premier analyzes and validates the data for CMS.

CMS pays financial incentives for the top 20% of high scoring hospitals in each clinical area. The top 10% of hospitals get a 2% incentive payment for patients in each clinical area. Hospitals in the second decile receive a 1% incentive payment. For the second straight year, Hackensack University Medical Center in Hackensack, New Jersey, was a top performer in all five areas, CMS said. The hospital earned $744,000 for its efforts.

Charleston Area Medical Center (CAMC) in Charleston, West Virginia, got the second highest incentive award, $701,000, for achieving top performance in four clinical areas. CAMC also got the highest single award, $432,901, in one clinical area for providing high quality care to 883 Medicare patients who had a CABG. The second largest single award of $250,775 went to the Bone and Joint Hospital in Oklahoma City, Oklahoma.

Launched in October 2003, the project is part of an overall shift in how Medicare pays for care. Payments are based on value, not volume. Premier and Medicare are discussing extending the experiment, but Congress has asked Medicare to consider developing a new payment system that would emphasize rewarding the best care, The New York Times reported.

A payment system based on delivering quality would be a fundamental change in how healthcare is delivered. For laboratories and anatomic pathology groups, pay for performance will mean a shift in emphasis to support improved patient outcomes, both in hospitals and physicians’ offices.

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