Press "Enter" to skip to content

Medicare Proposed Payment Rule to strengthen tie between payment and quality improvement

Share this:

The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would update Medicare payment policies and rates for inpatient stays to general acute care hospitals paid under the Inpatient Prospective Payment System (IPPS) and long-term care hospitals (LTCHs) paid under the LTCH Prospective Payment System (PPS).   The proposed rule would strengthen the Hospital Value-Based Purchasing Program (VBP Program) to further Medicare’s transformation from a system that rewards volume of service to one that rewards efficient, high-quality care.  This program, which was required by the Affordable Care Act, will adjust hospital payments beginning in FY 2013 and annually thereafter based on how well they perform or improve their performance on a set of quality measures.   Specifically, CMS is proposing to add the Medicare spending per beneficiary measure to the Hospital VBP Program, which would affect payments beginning in FY 2015.  This measure would include all Part A and Part B payments (after removing differences attributable to geographic payment adjustments and other payment factors) from three days prior to an inpatient hospital admission through 30 days post discharge with certain exclusions.  The proposed measure would be risk-adjusted for the beneficiary’s age and severity of illness.   The proposed rule also includes a new outcome measure that rewards hospitals for avoiding certain kinds of life-threatening blood infections that can develop during inpatient hospital stays. This measure, the central line-associated bloodstream infection measure, supports ongoing work by CMS and other hospital safety leaders to reduce healthcare-associated infections through the Partnership for Patients initiative.

The proposed rule would also strengthen the inpatient quality reporting program (IQR).  Specifically, CMS is proposing to include measures for perinatal care and readmissions, including overall readmissions and readmissions relating to hip and knee replacement procedures, and for the use of surgery checklists designed to reduce errors.  CMS is also proposing to add a new survey measure to the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) measures to assess the quality of patients’ care transitions.

To provide hospitals with an incentive to reduce hospital readmissions and improve care coordination, the Affordable Care Act required CMS to implement a Hospital Readmissions Reduction Program that will reduce payments beginning in FY 2013 (that is, for discharges on or after October 1, 2012) to certain hospitals that have excess readmissions for three selected conditions:  heart attack, heart failure and pneumonia.

The proposed rule also builds on CMS’ quality reporting initiatives by proposing the measures that will be used for LTCHs for the FY 2015 and FY 2016 payment determinations and establishing programs and quality measure reporting for psychiatric hospitals that are paid under the Inpatient Psychiatric Facility Prospective Payment System and PPS-exempt cancer hospitals. Additional reporting requirements are also proposed for the ambulatory surgical center quality reporting program.

Share this: