Medicare Compliance & Reimbursement

Paying for quality health care pays off, CMS demonstration reveals.

The Centers for Medicare & Medicaid Services is putting its money where its mouth is. CMS revealed results of three demonstration projects that offered providers financial incentives for quality care. Results showed that the incentives not only increased quality -- they also reduced the growth in Medicare expenditures.

"We continue to be encouraged by the progress of our ongoing programs that test value-based purchasing across a variety of health care services," said Charlene Frizzera, acting administrator of CMS.

These demonstrations include one for large physician practices, one for small and solo physician practices, and one for hospitals. The Hospital Quality Incentive Demonstration shows continued quality improvement among participating hospitals, CMS reported in a press release. Meanwhile, participating physicians in the Physician Group Practice Demonstration continue to improve quality for patients with chronic illnesses or requiring preventive care.

On top of this, the 560-plus small and solo physician practices participating in the Medicare Care Management Performance Demonstration are being rewarded for providing high quality preventive care and care for patients with chronic illnesses.

The HQID, which began in 2003 with hospitals in 38 states, was designed to test payment incentives under Medicare to see if they would improve the safety, quality, and efficiency of inpatient services, CMS explained.

Participants raised overall quality by an average of 17 percentage points over four years. The participating hospitals were measured based on their performance on more than 30 national standards and accepted care measures for patients in five clinical areas: heart attack, coronary bypass graft, heart failure, pneumonia, and hip and knee replacements.

CMS has awarded more than $36.6 million to top performers via HQID, which the agency extended for three additional years to test new incentive models and ways to improve patient care.

Under the PGPD, physician groups improved quality and shared savings. The 10 physician groups that participated in the demonstration achieved benchmark performance on at least 28 of the 32 measures, CMS reported. Geisinger Clinic in Danville, Penn., and Park Nicollet Health Services in St. Louis Park, Minn., achieved benchmark performance on all 32 measures, CMS cheered.

Over the first three years of the demonstration, the physician groups increased their quality scores an average of 10 percentage points on ten diabetes measures, 11 points on 10 congestive heart failure measures, six points on seven coronary artery disease measures, 10 points on two cancer screening measures, and one percentage point on three hypertension measures, CMS said.

Under the PGPD, 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 in savings generated for the Medicare Trust Funds on the third performance year, CMS reported.

In the MCMPD, 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, but some practices earned as much as $62,500. The goal of the MCMPD is to improve the quality of care for beneficiaries with chronic conditions as well as promote the use of health information technology, CMS said.