Value-Based Purchasing: Non-Payment for Hospital-Acquired Conditions
Author: Kathy A. Jankowski, Walt Zywiak and Jane Metzger
An important operative in healthcare reform is VBP (value-based purchasing), which is pressuring hospitals to improve and report, and encouraging consumers to purchase healthcare based on outcomes quality; and a current VBP focal point is the CMS HAC payment adjustment provision, which denies claims payment upgrades for selected HACs (hospital-acquired conditions). For discharges on and after October 1, 2008, the provision requires CMS to adjust Medicare hospital claim payments when specified HACs are not POA (present on admission). This white paper discusses claims POA reporting requirements, payment adjustment criteria, and mechanics associated with HAC payment adjustments. It also identifies and discusses other payer responses, hospital workflows affected, how hospitals are responding, and how both HAC payment adjustment demands and responses are related to overall VBP and never event management initiatives
Consistent with the history of other major shifts in approaches to healthcare reimbursement in the U.S., the country’s largest payer — Centers for Medicare & Medicaid Services (CMS) — is leading the way with changes to the Medicare program. Authorized by Congress in the Deficit Reduction Act of 2005, CMS has been building upon the Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) Program, which provided differential payments to hospitals reporting their performance according to a defined set of quality measures (core measures), to put in place a new program beginning in FY 2009 that includes both public reporting and financial incentives for better performance. The intent is to use the combination of transparency and financial incentives to drive improvements in clinical quality, patient-centeredness and efficiency. This is part of the larger CMS initiative to alter reimbursement regulations for hospitals, including the Recovery Audit Contractor (RAC) program, Medicare Severity- DRGs (MS-DRGs), and Medicare rate increases pegged to performance on core measures.
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