WASHINGTON – A program that provides financial incentives to hospitals that meet quality of care standards has been financially restructured and extended three years by the Centers for Medicare and Medicaid Services.
Premier Inc.’s Hospital Quality Incentive Demonstration, under which top-performing hospitals have received cash rewards for quality improvements, has been modified to make more participating hospitals eligible for rewards.
More than 250 hospitals in the United States have sought to improve care quality for their fee-for-service Medicare patients under HQID, but only those in the top 20 percent of quality performance have received funds during the first two years of the program.
A new three-level financing structure will take effect as CMS evaluates the hospitals in the coming years. The top 20 percent will still be rewarded, and an attainment award will go to hospitals that exceed the median level of performance established two years ago. Also, lower-performing hospitals that make considerable quality improvements will receive incentives.
Mark Wynn, director of CMS’ Division of Payment Policy Demonstrations, said the original structure of HQID didn’t provide enough incentives to average hospitals that took measures to improve. “We’re spreading the money around a little more and trying to help those hospitals that have stepped up to make those improvements,” he said.
CMS will also increase funding for the program under the new structure. In the coming year, roughly $12 million will be awarded; by contrast, in the first two years of the program the agency awarded $8.9 million and $8.7 million, respectively.
Only hospitals that are already participating are eligible to continue in HQID, said Wynn.
The program sets standards for five high-volume diseases – acute myocardial infarction, heart failure, coronary artery bypass graft, community-acquired pneumonia and hip and knee replacement. Wynn said CMS is looking to expand the demonstration to other areas, such as mortality and patient safety measures.
Denise Dominik, RN, director of performance improvement at Spokane, Wash.-based Sacred Heart Medical Center, said her hospital was the fourth-highest reward recipient in HQID’s second year. Sacred Heart received nearly $257,000 for its adherence to quality standards in four of the five areas of care.
“My goal is to have reimbursement for all five,” Dominik said. She said Sacred Heart has difficulties in the area of community-acquired pneumonia because of the large number of physicians who are involved in its treatment.
The top performing hospital in the first two years of the demonstration was Hackensack, N.J.-based Hackensack University Medical Center. “It’s not often you get recognized for doing something right,” said Harold Hogstrom, Hackensack’s executive vice president and chief financial officer. “We’ve been champions of quality for a long time. This money is just a bonus.”
One of the largest freestanding hospitals in the demonstration, the 900-bed medical center was awarded more than $874,000 in 2004 and nearly $744,000 in 2005.