CMS proposes new Medicare hospital inpatient value-based purchasing program

The Centers for Medicare & Medicaid Services has issued a proposed rule for hospital inpatient value-based purchasing that is intended to reward hospitals for meeting and exceeding quality and safety measures. Under the program, hospitals that perform well both in terms of quality of care and the patient experience of care – or those that have made improvements in their delivery of care – would be rewarded with higher payments. "Today's proposal is a huge leap forward in improving the quality and safety of America's hospitals for both Medicare beneficiaries and all Americans," said CMS Administrator Donald Berwick, MD. "The hospital value-based purchasing program will reward hospitals for improving patients' experiences of care, while making care safer by reducing medical mistakes. The program, a required portion of the Patient Protection and Affordable Care Act, would affect more than 3,000 hospitals receiving Medicare payments for inpatient visits under the Inpatient Prospective Payment System. CMS has been collecting quality and patient experience data from hospitals on a voluntary basis as part of its Hospital Inpatient Quality Reporting Program. The hospital value-based purchasing program, which would begin to apply in 2013 to payments for discharges occurring on or after Oct. 1, 2012, would make value-based incentive payments to acute care hospitals based either on how well the hospitals perform on certain quality measures or how much their performance improves on certain quality measures from their performance during a baseline period. The higher a hospital's performance or improvement during the performance period for a fiscal year, the higher the hospital's value-based incentive payment for the fiscal year would be. "The hospital value-based purchasing program proposal expands upon CMS' long-standing pay-for-reporting program to reward hospitals not just for reporting data, but for the results of that data," said Berwick. "Value-based purchasing repositions Medicare from an observer of nationwide hospital quality to a formidable force in shaping quality going forward." CMS is accepting comments on the proposed rule until March 8 and anticipates issuing a final rule next year.