|Value-Based Purchasing Programs Showing Promise
Three years, and in some cases five years, into the
Centers for Medicare and Medicaid Services (CMS) comprehensive
value-based purchasing (VBP) demonstrations the projects are beginning
to show the results CMS was counting on. These programs are, at its
simplest, based on pay-for-performance (P4P).
CMS wants to transform Medicare from a passive payer to
an active purchaser of higher quality, more efficient healthcare, while
slowing the growth in Medicare by providing financial incentives to
providers who can meet specific high quality goals in the delivery of
preventive care while saving Medicare money.
To that end CMS created a plethora of VBP demonstration programs, including:
- Medicare Hospital Gainsharing Demonstration (MHGD);
- Physician Hospital Collaboration Demonstration (PHCD);
- Hospital Quality Incentive Demonstration (HQID);
- Physician Group Practice Demonstration (PGP); and
- Medicare Care Management Performance (MCMP).
Medicare is working in partnership with Premier Inc., a
national hospital quality measurement organization, on HQID, now in its
"The bottom line is that the status quo system of
reimbursing hospitals is broken," said Susan DeVore, Premier president
and CEO. "Trying to move the payment system to pay for quality and not
solely for volume makes sense, especially when we have substantial
evidence to prove that this payment model creates the right incentives
to drive continuous improvement."
"The new payment model is based on lessons learned
during the first three years of the project and reflects what we expect
to see in a national VBP plan.
This is the right reform, at the right time, to improve care in the long run," DeVore added.
CMS Kicks Off Nursing Home VBP Demonstration
"Encouraged by the progress" of the VBP pilot programs
Charlene Frizzera, CMS’ acting administrator, said her agency
started in July a Nursing Home Value-Based Purchasing Demonstration.
A total of 200 nursing homes in Arizona, New York and Wisconsin are participating.
The project will reward facilities that can improve or deliver high quality care in four specific areas:
- Resident outcomes;
- Avoidable hospitalizations; and
- Reductions in the scope and severity of deficiency citations the participating homes may have received during inspections.
Nursing homes will be awarded points in each of these
areas and homes with the highest scores or greatest improvement will
become eligible for a performance payment. Resulting savings from
improved quality and efficiency will be used to fund incentive pools in
The demonstration lasts through June 2012 when program effectiveness will be evaluated to inform Medicare VBP policies.
Hospital Quality Incentive Demonstration
CMS working with Premier kicked off HQID in 2003 to test
payment incentives under Medicare as a means to try to improve the
safety, quality and efficiency of inpatient services by linking
incentives to improved quality. Currently more than 200 hospitals in 38
states are participating.
Since the program’s inception patients are living
longer and receiving recommended treatments more frequently, Premier
"The HQID project is the only large-scale hospital
value-based purchasing project showing that financial incentives can
increase quality of care," Frizzera said.
More than 1.5 million patients treated in five clinical
areas at the participating hospitals received approximately 500,000
additional recommended evidence-based clinical quality measures, such
as smoking cessation, discharge instructions and pneumococcal
vaccination, during that same timeframe.
CMS is awarding incentive payments totaling $12 million
this year to 225 hospitals for top performance, top improvements and
overall attainment in five clinical areas: heart attack, coronary
bypass graft, heart failure, pneumonia and hip and knee replacement.
Through the first four years, CMS awarded more than
$36.6 million to top performers. After the initial three years of the
demonstration, CMS extended the project for three more years to test
new incentive models and find new ways to improve patient care.
The HQID project has served as a basis for CMS’
proposal to Congress for a national VBP or P4P program. The project has
also been cited as a test-bed for reform by the Senate Finance
Committee as part of healthcare reform.
For complete information about the HQID project and to
view a list of those hospitals ranking in the top 50 percent in each
focus areas, please visit www.cms.hhs.gov/HospitalQualityInits.
The hospital quality of care information gathered through the initiative is available to consumers on the at www.hospitalcompare.hhs.gov.
Physician Group Practices Hitting Most CMS Benchmarks
Only 10 physician groups are participating in the PGP
demonstration and what the demonstration lacks in quantity it is making
up for in quality. All 10 physician groups achieved benchmark
performances on at least 28 of the 32 measures reported in year three
of the demonstration. Two groups – Geisinger Clinic in Danville,
Pa., and Park Nicollet Health Services in St. Louis Park, Minn. –
achieved benchmark performance on all 32 performance measures.
Physician groups earn incentive payments based on the
quality of care they provide and the estimated savings they generate in
Medicare expenditures for the patient population they serve.
Five physician groups will receive performance payments
totaling $25.3 million as part of their share of $32.3 million of
savings generated for the Medicare Trust Funds in the program’s
Over the first three years of the demonstration the
physician groups increased their quality scores significantly on
diabetes, congestive heart failure, coronary artery disease, cancer
screening and hypertension.
The University of Michigan Faculty Group Practice was
also cited by CMS for providing quality of care while reducing Medicare
costs. The practice said its performance was better than the CMS
targets for 29 of the 32 quality measures tracked in the third year of
the project, and saved Medicare $2.9 million.
The Faculty Group took an interdisciplinary approach to
the project, involving pharmacists, nurses, social workers, care
managers and others in the care of Medicare patients.
Project Leader Dr. Caroline Blaum, associate professor
of internal medicine at the VA Ann Arbor Healthcare System, said the
project results provide important input for the national debate on
healthcare cost and quality. "There are plenty of opportunities to
squeeze costs out of the system while also improving quality of care."
For more information on the project, visit www.cms.hhs.gov/DemoProjectsEvalRpts. Click on "Medicare Demonstrations" and then search for "Medicare Physician Group Practice Demonstration."
HIT A Hit With Small Group Practices
Doctors in small- to medium-sized practices are in line
for double bonuses in the MCMP Demonstration for not only meeting
patient quality benchmarks but for using certified health information
technology (HIT) to report patient data electronically through
electronic health records (EHRs).
The goal of the MCMP demonstration is to promote the use
of HIT to improve the quality of care for beneficiaries with chronic
CMS is awarding approximately $7.5 million dollars in
incentive payments to more than 560 practices in California, Arkansas,
Massachusetts and Utah. The average payment per practice is $14,000
butsome practices earned as much as $62,500. Last year, CMS paid out
more than $1.5 million in incentives for attaining baseline quality
Twenty-three percent of participating practices were
able to submit at least some of the measures from certified HIT
technology, CMS said.
Address: Centers for Medicare and Medicaid Services, 7500 Security Blvd., Baltimore, MD 21244; (877) 267-2323, www.cms.gov.