News: CMS issues value-based purchasing program proposal
CDI Strategies, November 30, 2007
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Hospitals can potentially earn money back for high performance, improvement
CMS on Monday outlined its long-awaited value-based purchasing program (VBP) proposal that would reduce diagnostic-related group (DRG) payments for Medicare patients, but give hospitals a chance to earn the money back through stellar performance or dramatic improvement.
"One way to think of it is that the base DRG rate [would be] reduced and the hospitals would buy back that incentive payment," CMS Acting Administrator Kerry Weems said in a conference call Monday. "And the incentive payment would be restructured so that we're not just rewarding high performing hospitals, but it could also be adjusted so that if a hospital is improving significantly, even if [it is] a lower performer, if [it is] improving significantly, it could also get an incentive payment."
The plan proposes a 2%--5% risk, or reduction in payment, according to Thomas Valuck, MD, JD, director of the CMS special program office of VBP.
"Let's just say, for example, Congress were to pick 5% to put at risk. That would be 5% of each hospital's DRG payment that could be earned back based on their performance," Valuck said. "Depending on how much they approve and what level they attain, those will translate to the percent of the amount of risk that's earned back, and they will be applied to DRG payments moving forward."
The 104-page plan unveiled yesterday and presented to Congress last week is similar to the options paper on VBP that CMS released earlier this year, but with one significant difference. The final proposed model would incorporate scores on the Hospital-Consumer Assessment of Healthcare Providers and Systems (HCAHPS) into the performance assessments, according to Valuck.
View the CMS report.
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