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MedPAC recommends pay for performance

Quality Improvement Monitor, January 13, 2005

The Medicare Payment Advisory Commission (MedPAC) voted Wednesday to recommend to Congress that Medicare payments be tied to the quality of care provided in hospitals, physician offices, and home health agencies.

MedPAC recommended that Congress establish a quality incentive payment policy for hospitals, physician offices, and home health. The panel did not make any suggestions on structuring a payment system.

MedPAC Chairman Glenn Hackbarth told Congressional Quarterly that Medicare could set aside 1% of payments to pay more to those who show quality improvement.

The commission also recommened that hospitals identify secondary diagnoses as part of their claims form, which would assist in payment risk adjustment. Risk adjustment helps account for how sick one patient may be from another.

MedPAC will deliever its report to Congress in March. Check out the February Briefings on Quality Improvement and Data Reporting for an in-depth look at pay for performance and hospital quality improvement.

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