This article was originally published in the March 2011 issue of Atlanta Hospital News.
Section 3001(a) of the Patient Protection and Affordable Care Act, Pub. L. 111-148 ("PPACA"), requires the Secretary of Health and Human Services to establish a hospital value-based purchasing program under which value-based incentive payments are made to hospitals meeting certain performance standards. In accordance with this directive, the Centers for Medicare and Medicaid Services ("CMS") issued its proposed rule to establish a value-based purchasing program ("Value-Based Purchasing Program") for acute care hospitals providing services to Medicare beneficiaries. 76 Fed. Reg. 2454 (January 13, 2011).
CMS states that in recent years, it has undertaken a number of initiatives to lay the foundation for rewarding health care providers and suppliers for the quality of care they provide by tying a portion of their Medicare payments to their performance on quality measures. The overarching goal of these initiatives, according to CMS, is to transform Medicare from a passive payer of claims to an active purchaser of quality health care for its beneficiaries. CMS views the Value-Based Purchasing Program as the next step in promoting higher quality care for Medicare beneficiaries and transforming Medicare into an active purchaser of quality health care for its beneficiaries. The Value-Based Purchasing Program is one of multiple reforms that are significantly altering how Medicare pays hospitals. Other reimbursement changes based upon a hospital's effective delivery of quality of care for patients include incentives for implementing electronic health records, and payment adjustments based on hospital rates of hospital-acquired conditions and rates of readmissions
The PPACA requires CMS to begin making payments under the Value-Based Purchasing Program to hospitals for discharges occurring on or after October 1, 2012, i.e., for FY 2013, which is October 1, 2012 through September 30, 2013. As a result, CMS is proposing a performance period running from July 1, 2011 to March 31, 2012 for the FY 2013 payment determination. Hospitals that perform well on quality measures relating both to clinical process of care and to patient experience of care, or those making improvements in their performance on those measures, would receive higher payments under the program.
For FY 2013, CMS proposes to adopt eighteen measures for evaluating hospitals under the Value-Based Purchasing Program. These measures have already been adopted for the Hospital Inpatient Quality Reporting Program, categorized into two domains: seventeen of the proposed measures will be clinical process of care measures, which will be grouped into clinical process of care domain, and one measure will be the Hospital Consumer Assessment of Healthcare Providers and Systems ("HCAHPS") survey, which will fall under a patient experience of care domain. Additionally, CMS proposes to calculate a total performance score for each hospital by combining the greater of each hospital's achievement or improvement points for each measure to determine a score for each domain, multiplying each domain score by a proposed weight (clinical process of care at 70 percent, patient experience of care at 30 percent), and adding together the weighted domain scores. Thus, CMS proposes to convert each hospital's total performance score into a value-based incentive payment utilizing a linear exchange function.
As required by the PPACA, CMS excludes certain hospitals from the Value-Based Purchasing Program. Specifically, hospitals located in the U.S. territories or in Puerto Rico, psychiatric, rehabilitation, long term care, children's and cancer hospitals are excluded under the proposed rule. CMS also proposes to exclude from a hospital's total performance score calculation any measures on which they report fewer than ten cases. Moreover, CMS proposes to exclude from the Value-Based Purchasing Program any hospitals to which less than four of the proposed measures apply. Finally, a hospital will be excluded under the proposed rule for failure to report a minimum of 100 HCAHPS surveys during the performance period.
CMS proposes to inform each hospital through its QualityNet account at least sixty days prior to October 1, 2012 of the estimated amount of its value-based incentive payment for FY 2013 discharges based on estimated performance scoring and value-based incentive payment amounts. Further, CMS will notify each hospital of the exact amount of its value-based incentive payment adjustment for FY 2013 discharges on November 1, 2012.
CMS will accept comments on the proposed rule through March 8, 2011.
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