Hospital pay-for-performance proposal issued by CMS

NEWS IN BRIEF — Posted Jan. 17, 2011

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The Centers for Medicare & Medicaid Services issued a proposed rule Jan. 7 to establish a Medicare value-based purchasing program for hospitals that would reward facilities for providing high-quality care to patients.

Under the program, hospitals that perform well on quality measures based on both clinical care and patient experiences would receive higher payments. Payments would be applied beginning in fiscal 2013 to payments for discharges occurring on or after Oct. 1, 2012. The program, required by the health system reform law, would apply to Medicare payments under the Inpatient Prospective Payment System for inpatient stays at more than 3,000 acute care hospitals.

The financial incentives would be funded by a reduction in the base operating diagnosis-related group payments for each discharge. The reduction would be 1% in fiscal 2013, rising to 2% by fiscal 2017. CMS is accepting comments on the proposed rule until March 8.

Note: This item originally appeared at

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