Medicare Says Demonstration Projects Proving Paying
for Quality Health Care Pays Off
CMS’ goal is to transform Medicare from a passive
payer to an active purchaser of higher quality, more efficient health
care
Aug. 26, 2009 – The Centers for Medicare & Medicaid
Services (CMS) is pointing to several of their demonstration projects
and claiming they provide “strong evidence” that financial incentives
can increase the quality of care for Medicare patients and can reduce
the growth in Medicare expenditures.
CMS recently announced results from three of these
demonstrations, one for large physician practices, one for small and
solo physician practices, and one for hospitals. CMS also announced the
start of three additional value based purchasing demonstrations.
The CMS value-based purchasing (VBP) initiative is
designed to tie Medicare payments to performance on quality and
efficiency and is part of CMS’ goal to transform Medicare from a passive
payer to an active purchaser of higher quality, more efficient health
care.
Entering its fifth year, the Hospital Quality
Incentive Demonstration (HQID) shows continued quality improvement among
participating hospitals, according to CMS. In addition, physician
practices participating in the Physician Group Practice (PGP)
Demonstration continue to improve quality for patients with chronic
illnesses or requiring preventive care.
More than 560 small and solo physician practices
participating in the Medicare Care Management Performance (MCMP)
Demonstration are also being rewarded for providing high quality care in
the delivery of preventive care and care for patients with chronic
illnesses.
New demonstration programs include the Nursing Home
Value-Based Purchasing Demonstration, the Medicare Hospital Gainsharing
Demonstration, and the Physician Hospital Collaboration Demonstration.
The nursing home demonstration program will reward
facilities that can improve or deliver high quality care in four
specific areas: staffing, resident outcomes, avoidable hospitalizations
and reductions in deficiency citations.
The gainsharing and physician hospital
collaboration programs will evaluate whether gainsharing leads to
improvements in quality and efficiency. The demonstrations provide a
promising opportunity for hospitals and physicians to join forces to
improve quality and efficiency of care, establish effective means to
govern use of inpatient resources, reduce costs, and share the rewards.
Overall, demonstrations give CMS the opportunity to
work closely with providers to improve quality and efficiency and serve
as a vehicle to test various VBP methodologies.
“We continue to be encouraged by the progress of
our ongoing programs that test value based-purchasing across a variety
of health care services,” said Charlene Frizzera, Acting Administrator
of CMS;
“Building on those efforts, we are pleased to
announce the start of our Nursing Home Value-Based Purchasing
Demonstration and two gain-sharing demonstrations.”
“What we learn from the various Medicare
demonstrations help to achieve the Administration’s goals of paying for
high quality and efficient health care in America,” said Jonathan Blum,
director of the CMS’ Center for Medicare Management and acting director
of the Center for Health Plan Choices.
“Building on these findings, we will aggressively
test new demonstration concepts to continue to meet these goals.”
Hospitals Continue to Improve Quality
The HQID is sponsored by Medicare in partnership
with Premier, Inc., a national hospital quality measurement
organization. The demonstration, which began in 2003 with hospitals in
38 states, was designed to test payment incentives under Medicare to see
if they would improve the safety, quality and efficiency of inpatient
services by linking incentives to improved quality.
Participants raised overall quality by an average
of 17 percentage points over four years, based on their performance on
more than 30 nationally standardized and widely accepted care measures
for patients in five clinical areas – heart attack, coronary bypass
graft, heart failure, pneumonia, and hip and knee replacements.
CMS is awarding incentive payments totaling $12
million in year four to 225 hospitals for top performance, top
improvements and overall attainment in the five clinical areas.
Through the first four years, CMS awarded more than $36.6 million to top
performers. After the initial three years of the demonstration, CMS
extended the project for three additional years to test new incentive
models and ways to improve patient care.
Physician Groups Improve Quality and Share
Savings
All ten of the physician groups participating in
the PGP Demonstration achieved benchmark performance on at least 28 of
the 32 measures reported in year three of the demonstration. Two groups
– Geisinger Clinic in Danville , Penn. and Park Nicollet Health Services
in St. Louis Park , Minn. – achieved benchmark performance on all 32
performance measures.
Over the first three years of the demonstration,
the physician groups increased their quality scores an average of 10
percentage points on ten diabetes measures, 11 points on ten congestive
heart failure (CHF) measures, 6 points on seven coronary artery disease
(CAD) measures, 10 points on two cancer screening measures, and 1
percentage point on three hypertension measures.
Under the PGP demonstration, physician groups earn
incentive payments based on the quality of care they provide and the
estimated savings they generate in Medicare expenditures for the patient
population they serve. As a result of their efforts to reduce the
growth rate in Medicare expenditures, five physician groups will receive
performance payments totaling $25.3 million as part of their share of
$32.3 million of savings generated for the Medicare Trust Funds in
performance year 3.
Over 560 Small Physician Practices Earn
Incentive Payments for Quality Performance
In the first year of the MCMP demonstration, almost
all of the 610 participating small and solo physician practices are
being rewarded for performance on 26 quality measures. CMS is awarding
approximately $7.5 million dollars in incentive payments to over 560
practices in California , Arkansas , Massachusetts and Utah . The
average payment per practice is $14,000 but some practices earned as
much as $62,500. Last year, CMS paid out over $1.5 million in
incentives for reporting baseline quality measures.
The goal of the MCMP Demonstration is to promote
the use of health information technology to improve the quality of care
for beneficiaries with chronic conditions.
Doctors in small to medium sized practices who meet
clinical performance standards on each measure are eligible to receive
financial rewards under the MCMP Demonstration. The demonstration also
provides an additional bonus to practices that report the data using an
electronic health record (EHR) certified by the Certification Commission
for Health Information Technology. Twenty-three percent of practices
were able to submit at least some of the measures from a certified EHR.
Nearly 200 Nursing Homes in Three States Testing
Value-Based Purchasing
Nearly 200 nursing homes in three states will
participate in a Medicare demonstration to determine if financial
incentives will improve the quality of the care they provide.
The Nursing Home Value-Based Purchasing
demonstration will reward those facilities that improve or deliver
quality care in four areas: nurse staffing, resident outcomes, avoidable
hospitalizations and reduction of the scope and severity of deficiency
citations the home may have received during inspections. Nursing homes
will be awarded points in each of these areas; homes with the highest
scores or greatest improvement will become eligible for a performance
payment.
Savings that result from improved quality and
efficiency will be used to fund incentive pools in each state.
CMS will conduct the demonstration in 79 homes in
New York , 62 in Wisconsin and 41 in Arizona . Each of these states
assisted in the recruitment process by encouraging facilities to apply
to CMS. Participating homes were then selected from the applicant pool.
The demonstration will run from July 2009 through
June 2012, at which time its effectiveness will be evaluated to inform
Medicare value-based purchasing policies.
14 Hospitals Collaborating with over 1,000
Physicians in Gainsharing Demonstrations
CMS also announced today it will operate two
demonstrations to evaluate gainsharing as a means of aligning incentives
between hospitals and physicians to improve quality of care and overall
hospital efficiency.
Gainsharing occurs when a hospital pays incentives
to a physician who assists in saving internal hospital costs while
improving quality and efficiency and is normally restricted in
Medicare’s fee-for-service program.
The Medicare Hospital Gainsharing Demonstration
began in October 2008. This demonstration consists currently of two
sites, Beth Israel Medical Center in New York City and Charleston Area
Medical Center in West Virginia. Under this demonstration, CMS will
evaluate whether gainsharing leads to short-term improvements in quality
and efficiency during the inpatient stay and immediately following
discharge.
The Physician Hospital Collaboration Demonstration,
comprised of a consortium of twelve hospitals administered by the New
Jersey Hospital Association, began in July. This demonstration is
designed to track patients beyond a hospital episode to determine the
impact of hospital-physician collaborations on preventing short- and
longer-term complications and duplication of services.
These demonstrations will allow physicians to share
in the savings generated by the adoption of structural and procedural
changes made to improve the quality of inpatient hospital care.
Aug. 26, 2009 – The Centers for Medicare & Medicaid
Services (CMS) is pointing to several of their demonstration projects
and claiming they provide “strong evidence” that financial incentives
can increase the quality of care for Medicare patients and can reduce
the growth in Medicare expenditures. 
