Performance-Based Reimbursement Update

Author:

Caitlin Lorincz, Jane Metzger

On April 18, 2011, The Centers for Medicare and Medicaid Services (CMS) released a set of proposed changes to the Inpatient Prospective Payment System (IPPS), the system of payment for the operating costs of inpatient stays in acute care hospitals under Medicare Part A (Hospital Insurance) based on prospectively set rates. Increasingly, CMS is adding programs to IPPS that tie reimbursement to measured performance in some way. The proposed rule contains changes to two existing programs: Inpatient Quality Reporting and Hospital-Acquired Conditions Payment Limitation, which introduces how CMS proposes to operate the new Hospital Readmissions Reduction Program beginning in 2012, and adds a new measurement domain to the Value-Based Purchasing Program in year two (rules for year one were already finalized).

This paper summarizes the proposed provisions for all of these programs. The bottom line is that these CMS programs —and the analogous programs rapidly being set up by private payers —provide a clear picture of accountability for hospitals in the next 3 years, regardless of the eventual design of the Shared Savings Program (also currently defined in a proposed rule).

NOTE: The content of this report is no longer current. Please see the Hospital Agenda for Accountability report for the most current information.

Download "Performance-Based Reimbursement Update" (PDF, 395KB)

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