Health Information Management

CMS reveals the results of three demonstration projects aimed at paying for quality care

HIM-HIPAA Insider, August 25, 2009

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On August 17, CMS announced the results of three different demonstration projects (one for large physician practices, one for small and solo physician practices, and one for hospitals) that it has conducted as part of its larger value-based purchasing (VBP) initiative. CMS designed the initiative to tie Medicare payments to performance on quality and efficiency as part of CMS’ effort to transform Medicare from a passive payer to an active purchaser of higher quality, more efficient healthcare.

"What we learn from the various Medicare demonstrations help to achieve the Administration’s goals of paying for high quality and efficient healthcare in America," said Jonathan Blum, director of the CMS’ Center for Medicare Management and acting director of the Center for Health Plan Choices in the press release. "Building on these findings, we will aggressively test new demonstration concepts to continue to meet these goals."

On the hospital side, participants in the Hospital Quality Incentive Demonstration program have raised overall quality by an average of 17 percentage points over four years. This is based on their performance on more than 30 nationally standardized and widely accepted care measures for patients in five clinical areas:

  • Heart attack
  • Coronary bypass graft
  • Heart failure
  • Pneumonia
  • Hip and knee replacements

After the initial three years of the demonstration, CMS extended the project for three additional years to test new incentive models and ways to improve patient care. CMS says it will award incentive payments totaling $12 million in year four to 225 hospitals for top performance, top improvements, and overall attainment in the five clinical areas.  Through the first four years, CMS awarded more than $36.6 million to top performers. 

CMS also announced that it will operate two demonstrations to evaluate gain sharing as a means of aligning incentives between hospitals and physicians to improve quality of care and overall hospital efficiency.

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