Medicare Compliance & Reimbursement

Voluntary program nets bonuses across wide variety of quality measurements.

As part of its ongoing program to encourage improved quality of care for its Medicare beneficiaries, the Centers for Medicare and Medicaid Services has started to develop a pay-for-performance initiative focused specifically on nursing homes.

In a recent public forum intended to gather input for the initiative, the CMS program design consultant, Abt Associates, presented recommendations for a draft design for a nursing home P4P demonstration. The national program will cover all Medicare beneficiaries residing in hospital-based and freestanding nursing home facilities. CMS will base incentive payments on level of performance and improvement over time.

CMS expects the demonstration project to include a few hundred facilities from three or four states, beginning in late 2006 or early 2007. Participation will be voluntary with participating facilities earning incentive payments, public recognition for high performers and the potential to influence national policy.

The agency will assess nursing home quality measurements for several variables, including the outcome of state survey inspections, staffing levels and stability, rate of avoidable hospitalizations, resident satisfaction, and other factors. The recommendation to CMS also includes rewards for both high-quality facilities and those with significant improvement.
 
The consultant proposed an incentive payment pool scheme that CMS would reserve for facilities that improve quality significantly, with incentive payments distributed based on number of resident days.