Joining the recent flurry of healthcare-related activity on Capitol Hill, Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Republican Chuck Grassley (R-Iowa) announced Thursday they will push pay-for-performance for hospital inpatient care under Medicare.
The senators released a draft proposal on value-based purchasing that would measure and pay hospitals for quality of care, rather than the number of services they provide. The proposal would for the first time increase or decrease Medicare payments to hospitals depending on how they perform on standard quality measures, Baucus said.
The proposal would build on the Medicare hospital pay-for-reporting program that Baucus and Grassley created in 2003. That program, a precursor to the proposal released Thursday, provides increased Medicare reimbursements to hospitals for tracking and reporting on how well they follow identified quality measures, according to the senators.
The senators' proposal calls for hospital pay-for-performance by fiscal year 2012.
The program would be phased in over five years, with full implementation in fiscal year 2016. Payment levels would gradually increase from 1 percent in fiscal year 2012 to 2 percent by fiscal year 2016.
The senators claim their plan would be budget neutral. Any savings from reduced payments to certain hospitals would be kept in the hospital payment system in the form of increased payments to other hospitals.
"Paying for the quality, not just the volume, of care that patients receive will improve patient outcomes and reduce costs in our healthcare system," Baucus said. "This discussion draft will contribute to the dialogue in the hospital community about how we can re-focus our system on quality care."
Grassley and Baucus introduced a bill in 2005 to set up value-based purchasing for hospitals and others in the system. Earlier this year, they hosted a roundtable discussion of experts.
"The draft legislation we're circulating today demonstrates our commitment to achieving this reform for the sake of every stakeholder in the healthcare system, starting with patients and the quality of care they receive," Grassley said.
According to the proposal, quality measures will be chosen from a list agreed upon by relevant stakeholder organizations, such as the National Quality Forum, as representing the best practices in inpatient hospital care. Initially, the program would measure performance in the treatment of heart attacks, heart failure, pneumonia and surgical care. It would also measure overall patient satisfaction of hospital care. The program, for example, would based payments on how frequently a heart attack patient receives aspirin upon admission to a hospital, Grassley said.
The draft will be available soon on the Senate Finance Committee Web site. The senators are taking public comments on the draft through December 15.
Do you agree with hospital P4P as a way to reduce costs and improve quality? Send comments to Senior Editor Diana Manos at diana.manos@medtechpublishing.com.