How Will Pay-for-Performance Impact Hospital Revenue in FY 2014?

Pay-for-performance programs within the federal healthcare law are well under way, and hospitals and health systems across the country are bracing for either padded Medicare payments or penalties.

Two of the major pay-for-performance programs are the Hospital Value-Based Purchasing program and the Hospital Readmissions Reduction program. According to CMS' proposed rule for the inpatient prospective payment system in fiscal year 2014, hospitals will lose up to 2 percent of Medicare payments for excessive readmissions. Meanwhile, hospitals will have 1.25 percent of their Medicare payments withheld for value-based purchasing, resulting in $1.1 billion in redistributed incentive pay.

The Advisory Board Company recently made an infographic outlining how all of the current pay-for-performance programs will impact hospital and health system revenue going into FY 2014. Each hospital is represented by a colored dot, which represent varying degrees of estimated revenue loss or gain:


Pay for Performance map
Via: The Advisory Board Company

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