Hospitals Question Whether Latest Penalty Program Will Help Them Improve Quality

Thousands of hospitals, large and small, are girding for cuts to their Medicare payments in 2014, as federal pay-for-performance programs aimed at boosting clinical quality, improving patient experience and preventing unnecessary hospital readmissions roll into their second year.

Thousands of hospitals, large and small, are girding for cuts to their Medicare payments in 2014, as federal pay-for-performance programs aimed at boosting clinical quality, improving patient experience and preventing unnecessary hospital readmissions roll into their second year.

Officials at many hospitals, particularly academic medical centers, say they also fear an additional financial hit that may come next October, when the CMS is scheduled to launch the third and final pay-for-performance program established by the Patient Protection and Affordable Care Act. That initiative, the hospital-acquired condition reduction program, will reduce fiscal 2015 Medicare payments by 1% for hospitals that fall within the worst-performing quartile, based on measures of adverse events that occur during hospital stays, including infections and pressure ulcers.

Together with the CMS' value-based purchasing and readmissions reduction programs, both of which began in fiscal 2013, the three initiatives are part of a sweeping effort to move the agency toward paying for high-value care. While quality experts and hospital leaders laud the goals of the HAC reduction program, they have a lengthy list of concerns, including issues with the measures the CMS chose, the potential for multiple penalties under overlapping programs, and the prospect that teaching hospitals will be disproportionately affected. They question whether the programs will actually help hospitals achieve better quality care, and warn that the combined impact of penalties from three pay-for-performance programs could hurt some hospitals.

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Source: Modern Healthcare