CMS has since updated this announcement and stated that hospitals choosing to suppress their HCAHPS data for March 2008 public reporting will not have a reduction in their FY2008 Annual Payment Update of IPPS hospitals reimbursement.  IPPS hospitals are allowed to suppress their HCAHPS results because the March 2008 public reporting will include data that were voluntarily collected, not under the Fiscal Year 2008 Annual Payment Update requirements.

We expect that the third public reporting update, which will include HCAHPS data from October - December 2007, will be the first time if a hospital suppresses their HCAHPS data they will have a 2% reduction in their Annual Payment Update.  However, CMS has not formally announced that this is the period payment reductions will begin.

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). 

The full press release is below.

In the HQA Preview Report, Footnote 8 reads, "This hospital chose not to participate in HCAHPS public reporting."

For the March public report, the footnote has been reworded to read, "Survey results are not available for this reporting period."

The footnote is applied in the following situations:

1. When a hospital has results for other HQA measures but did not participate in HCAHPS during October 2006 - June 2007.
2. When a hospital participated in HCAHPS but for only a portion of October 2006 - June 2007.
3. When a hospital chooses to suppress their HCAHPS results from public reporting.

For more information on the adjustment report, as well as PRC's response, please click on the PDF below.