News and briefs: P4P programs created under healthcare law now underway

This week marks the beginning of two new pay-for-performance initiatives from CMS: Readmissions Reduction Program and Value-Based Purchasing Program. Both programs—created through the Patient Protection and Affordable Care Act—will affect hospitals’ Medicare reimbursement amounts. 

Under the Value-Based Purchasing Program, Medicare will withhold 1% of Medicare reimbursements due to a hospital. The hospital will then have the chance to earn this money back through meeting predetermined quality measures. According to NPR, these quality measures comprise two parts: recommended protocols, such as giving antibiotics to patients within an hour of surgery, and patient surveys completed after discharge.

The second initiative targets hospitals’ readmission rates. Hospitals with the highest rates for heart attack, heart failure, and pneumonia patients will lose 1% of their regular reimbursements. This penalty is expected to cost participating hospitals a combined total of $280 million in its first year. The penalty increases to up to 2% next year.

Both of these programs push quality, not quantity, as the driving factor for patient care. Hospitals and practitioners will soon learn if their efforts to improve quality—through such things as OPPE programs and Hospital Consumer Assessment of Healthcare Providers and Systems survey—have started to pay off.