CMS Releases Proposed Rule on Value-Based Purchasing

CMS has released a proposed rule on value-based purchasing, which involves paying hospitals for performance on quality measures, according to a release by CMS.

Currently, CMS pays hospitals simply for reporting quality measures, as part of the Hospital Inpatient Quality Reporting Program. The new value-based purchasing program, which begins in fiscal year 2013, was mandated under the healthcare reform law. CMS is accepting comments until March 8, and will issue a final rule next year and the program starts on Oct. 1, 2012.

In the proposed rule, CMS had laid out performance measures, standards, a scoring scheme and a methodology for translating scores into incentive payments. Payments would be funded through a reduction in base operating DRG payments of 1 percent in FY 2013, rising to 2 percent in FY 2017.

To measure payments, CMS would use 17 clinical process-of-care measures and eight measures from the Hospital Consumer Assessment of Healthcare Providers and Systems survey on patients' experience of care. CMS would also adopt three mortality outcome measures, eight Hospital Acquired Condition measures and nine Agency for Healthcare Research and Quality measures for the program.

Under the proposed rules, a hospital would earn 0-10 points for performance on each measure and 0-9 points based on how much its performance improved during the baseline period. CMS would then combine the scores to calculate a Total Performance Score.

Certain hospitals will be excluded for the program, such as those with an insufficient number of patients to measure related conditions.

Premier praised the proposal, saying its Hospital Quality Incentive Demonstration pilot project has shown that "a well designed, value-based purchasing program can achieve better outcomes for patients."

Read the CMS release on quality.

Read the proposed rule on the value-based purchasing program.

Read other coverage of value-based purchasing:

- Hospital Groups Propose 7 Ways to Restructure Value-Based Purchasing

- CMS to Hold Forum on Its Value-Based Purchasing Program


- Healthcare Reform Bills Would Reward Hospitals for Medicare Spending Efficiency


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