Medicare reimbursements may soon be linked to hospital performance

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Hospital performance scores measures may determine Medicare reimbursements. Image source: Piper Report  

Medicare Part A payments for conditions like heart attacks and other illnesses may soon be linked to hospital performance on a variety of quality measures, according to a discussion draft of a bill proposed by Sens. Max Baucus, D-Mont., and Charles Grassley, R-Iowa.

The measures would derive largely from guidelines issued by organizations, such as the National Quality Forum. The program would measure overall patient satisfaction of hospital care, although the draft bill gave no specifics about the actual process.

The new Medicare hospital value-based purchasing program will build on the Medicare hospital pay-for-reporting program initiated in 2003, according to Baucus and Grassley. That program, a precursor to the current proposal, provides increased Medicare reimbursements to hospitals for tracking and reporting on how well they followed the identified quality measures.

The senators said that the new proposal “takes pay-for-reporting one step further by linking Medicare payments not only to reporting and tracking quality activities, but also how well the hospitals actually perform on these quality measures.”

Each hospital would be graded on how well it followed each measure. Reimbursements for discharges would depend on either its quality score or its overall improvement score.

Congress needs to firm up its details before hospitals will be on board, according to Tom Nickels, senior vice president for federal relations at the American Hospital Association (AHA).

"While we support moving forward with a value-based purchasing plan, we remain concerned about many of the details," Nickels said. "Issues such as the broad discretion provided to HHS [Health and Human Services], the total amount of payments at risk, and the process for identifying measures need to be addressed before a workable program can be adopted."

The program would gradually be phased in over four years, beginning in 2012, according to Baucus and Grassley.