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Medicare News
Medicare Wants to Cut Hospital Pay to Create Quality
of Care Incentive
Proposal would cut all hospitals up to 5% to fund the
incentive pool
Nov. 27, 2007 - The Centers for Medicare & Medicaid
Services (CMS)
on Monday proposed changes to the Medicare hospital reimbursement system
that would reduce payments by a flat rate to create an incentive payment
pool for rewarding hospitals that meet quality-of-care thresholds, the
Wall Street Journal reports.
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Under the proposal, which was outlined in a
104-page report to Congress, payments to all facilities would be cut by
a flat 2% to 5% to fund the incentive pool for distribution to hospitals
that show the most improvement or meet quality-of-care standards
(Francis, Wall Street Journal, 11/27).
The plan would create a "Value-Based Purchasing
Program" that would base hospitals' "diagnosis-related group" payments,
the money they receive for each discharge, on quality performance,
according to
CQ HealthBeat
(Carey, CQ HealthBeat, 11/26). CMS said the proposal would be
cost-neutral to the federal government, and it could save money if
Congress does not require that the entire pool be distributed (Wall
Street Journal, 11/27).
Quality improvements would be judged by a
hospital's "total performance score," which would be based on patient
outcomes, adhering to certain clinical practices, patient satisfaction
and other areas (CQ HealthBeat, 11/26).
Acting CMS Administrator Kerry
Weems said that the proposed payment system would be established over
three years and initially would apply to the treatment of conditions
such as heart failure and pneumonia (Hartford
Courant, 11/27). The proposal would require congressional
approval (CQ HealthBeat, 11/26).
According to the Journal, the proposed changes have
"the potential to squeeze hospitals already facing financial
difficulties even as it offers monetary incentives to improve medical
care." However, CMS would monitor the program if implemented, and Weems
said the agency would make sure no "unintended or perverse consequences"
come from it (Wall Street Journal, 11/27).
Comments
Senate Finance
Committee ranking member Chuck Grassley (R-Iowa) said that a
value-based approach is the "kind of reform that every branch of our
government ought to go after with full force," adding, "Now that the
plan is set, Congress needs to get the job done and pass additional
legislation to start implementing value-based purchasing."
AARP
Director of Public Policy John Rother said, "We are pleased that
Medicare is now taking concrete steps to begin tying a portion of
hospital payments to their actual performance, rewarding both those that
provide high quality and those that demonstrate meaningful improvement"
(CQ HealthBeat, 11/26).
Stacey Brown -- a spokesperson for
Premier,
which worked with CMS on an earlier pay-for-performance project -- said,
"We want to make sure what we're doing here is rewarding hospitals for
quality gains and not developing a cost-cutting program" (Wall Street
Journal, 11/27).
However, Jayne Hart Chambers, senior vice president for
the
Federation of
American Hospitals, said, "The Federation really believes
there needs to be a new pool of money for the incentive payments and
that the funds not come out of the base DRG rate because you're injuring
the hospitals that need the funds to do the improvement" (CQ HealthBeat,
11/26).
Acting CMS Administrator Weems Participates in
'Secret Shopper' Program Monitoring Medicare Advantage Plan Marketing
As part of a
CMS
initiative
to investigate the sales tactics of insurance agents marketing Medicare
Advantage plans to seniors, acting agency Administrator Kerry Weems on
Wednesday attended a promotional presentation for an MA plan as a
"secret shopper," the
AP/Contra Costa
Times reports.
Weems posed as a customer seeking information on
behalf of his mother. Participants in the agency's secret shopper
program, which includes private contractors as well as CMS staff, this
year have attended 119 presentations conducted by 56 participating
agents.
Earlier this year, congressional
hearings
showed that while many seniors are pleased with their benefits under MA
plans, marketing abuses have occurred in some cases. In response to the
increasing pressure from advocacy groups and lawmakers, CMS enacted
several changes to marketing and sales practices, according to the
AP/Times.
Agents must call beneficiaries who have enrolled in
certain plans to ensure that they understand the terms of the coverage.
Agents also have to pass a written exam indicating they understand
Medicare policies, and they must inform CMS officials about scheduled
sales and marketing presentations and events.
Weems said the oversight initiative in recent
months has indicated that the number and extent of problems with MA plan
marketing have declined. He said of the secret shopper program, "It's a
serious effort. It's not a game of gotcha, and it's not a publicity
stunt" (Freking, AP/Contra Costa Times, 11/27).
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