Medicare Compliance & Reimbursement

Hospitals that are involved in the Premier Hospital Quality Incentive Demonstration have shown vast improvements in inpatient care, the Centers for Medicare & Medicaid Services says. In a June 17 press release, CMS Acting Administrator Kerry Weems says the demonstration, which was launched in October 2003 by CMS and the Premier Inc. Healthcare Alliance, has achieved "excellent results."

About 250 hospitals in 36 states are involved in HQID, a program to test new payment systems under Medicare that would improve the safety, quality and efficiency of care delivered in the nation's hospitals, the release says.

The HQID demonstration uses value-based purchasing as an innovative method for Medicare to change the way it pays for healthcare services. Replacing the current method of paying a set amount for each hospital discharge, value-based purchasing requires Medicare to link payment with the quality of services provided, not just the quantity.

Congress would have to enact new legislation to change Medicare's payment method to value-based purchasing. "Given these results, it is time to take the next step and implement hospital value-based purchasing for the Medicare program so that citizens across the nation can benefit from improved safety and quality and get the right care every time," Weems says in the release. CMS first asked Congress to implement VBP in November 2007.

The hospitals in the HQID reported their quality data for five high-volume inpatient conditions using national measures of quality care:

• acute myocardial infarction (AMI/heart attack);

• coronary artery bypass graft;

• heart failure;

• pneumonia; and

• hip and knee replacement.

The program uses 30 quality measures to assess whether processes of care and patient outcomes meet accepted evidence-based practice standards, CMS says. To develop the quality measures, the government joined with private organizations such as the National Quality Forum, the American Hospital Association and the Leapfrog Group. CMS, the Joint Commission and the Agency for Health Research Quality have tested the measures, the release says.

From the start of the program in 2003 to the end of year three (2006), the average composite quality scores, an aggregate of all quality measures within each clinical area, improved significantly. The score for AMI improved from 87 percent to 96 percent, CABG improved from 85 to 97 percent, heart failure improved from 64 percent to 89 percent, pneumonia improved from 69 percent to 90 percent, and hip and knee replacement improved from 85 percent to 97 percent.

Fifteen hospitals improved by an average of 32.6 percent in quality scores, showing marked gains as they moved from the bottom to the top fifth of hospitals in one or more clinical areas, the release says.

"The total increment in average CQS over HQID's first three years is 15.8 percentage points. Between HQID's second and third years, the average CQS increase is 4.4 percentage points," the release says.

CMS awarded incentive payments of $7 million to the top-performing 112 hospitals, and the agency has given out a total of more than $24 million in HQID's three years. CMS will continue the project through September 2009.

"This demonstration and the leadership exhibited by Premier show us the way forward, and we are eager to work with Congress, the healthcare community and representatives from patient organizations to move forward to bring these new innovations to every American," Weems says. "It is time to move forward and reward and encourage reliable, high-quality care in all parts of Medicare."

For information about the HQID project and to view a list of hospitals ranking in the top 50 percent in each focus area, see http://www.cms.hhs.gov/HospitalQualityInits.