November 26, 2007 - Mike Leavitt, HHS Secretary, asked Congress to vote on a measure that would tie several key performance indicators to Medicare reimbursements. These key performance indicators, known collectively by Medicare as Value-Based Purchasing of Hospital Services (VBP), include HCAHPS. Stated Mr. Leavitt, "Under VBP, a percentage of the hospital's base operating payment for each discharge (the diagnosis related group or DRG payment) would be contingent on the hospital's actual performance on a specific set of measures. The transition from pay-for-reporting to an incentive based completely on performance would occur over a three-year period. Public reporting of quality measures on Medicare's Hospital Compare site, a key component of the Reporting Hospital Quality program, would remain an essential component of VBP."
In short, HHS is recommending that Medicare reimbursement levels to be contingent upon hospitals' Hospital Compare quality reporting scores, which includes HCAHPS. In the December 3, 2007 issue, Modern Healthcare reports that as much as 5% of inpatient payments would be withheld and placed into a pool to reward some hospitals for improvements. The rewards would be based on hospitals' overall scores on a range of clinical processes, 30-day mortality outcomes, as well as HCAHPS ratings.
HHS is asking Congress to vote on the initiative soon so that they can begin the 3-year implementation by the start of FY2009 (October 2008).
