Medicare Compliance & Reimbursement

CMS hitting hospitals in their pocketbooks for not participating in quality reporting.

Many hospitals that reported data on the quality of care they deliver will enjoy a 2-percent annual payment boost as a reward. But for those unlucky 171 hospitals that either didn't participate or failed the submission requirements, the Centers for Medicare & Medicaid Services (CMS) will slap them with a 2-percent reduction in their annual Medicare fee-schedule update for fiscal year (FY) 2007--a startling change from last year's 0.4-percentage-point reduction.

Only 28 of the 3,490 eligible acute-care hospitals in the United States chose not to participate in reporting quality-of-care data to CMS, the agency said in a Sept. 29 announcement. Approximately 143 hospitals "failed the submission requirements," CMS reports.

These statistics come from CMS' initiatives to provide "transparency in information for consumers on quality per formance measures linked to payments hospitals receive for treating Medicare beneficiaries," according to the agency. And hospitals are seeing stiffer penalties for not participating in quality-reporting initiatives or not meeting the requirements.

But for those hospitals that are faced with the steep 2-percent reduction in Medicare reimbursement for falling short on quality measures, there is a light at the end of the tunnel, CMS says.

"[A hospital] not meeting the quality data requirements for FY 2007 may exercise its right to appeal and submit a letter to CMS outlining its reasons for requesting reconsideration by no later than November 1, 2006," the agency explains.

The quality reporting initiative stems from the Medicare Modernization Act of 2003 and the Deficit Reduction Act of 2005. And although CMS calls hospitals' participation "voluntary," the agency has found that 99 percent of hospitals are choosing to report quality data rather than face the 2-percent reduction in Medicare reimbursement.

The agency hopes that patients will use the quality data to evaluate care choices and that hospitals will use it to improve performance, CMS administrator Mark McClellan said in a statement.

"This unprecedented, consistent information on the quality of hospital care is possible because of the collaboration of hospitals, consumers, insurers, and employers working together to achieve a more transparent health care system," McClellan adds.

The 10-measure starter set has expanded to 21 measures for 2007, which address heart attack, heart failure, pneumonia and surgical care--the most common reasons for hospital stays for Medicare beneficiaries, CMS maintains.

CMS wants to expand the set of measures even more for FY 2008, according to the Outpatient Prospective Payment System proposed rule, which is open for comments until Oct. 10.
 
The additional quality measures would include more surgical care measures, mortality measures and a patient satisfaction survey.

To view the proposed rule, go to www.cms.hhs.gov/HospitalOutpatientPPS/HORD/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=3&sortOrder=descending&itemID=CMS1185569.

For more information on hospital quality reporting, go to www.cms.hhs.gov/HospitalQualityInits/, or visit www.qualitynet.org for a full list of eligible hospitals.