Pay for Performance

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In today's climate of focus on the healthcare consumer, much attention is being paid to improving patient safety and quality of care. There is heightened interest in distinguishing healthcare providers who are “good performers”, who provide safe and efficient care from poorer performers whose outcomes may not be as good. Some payers feel that one way to encourage performance improvement is to pay good performers better than other providers.

The Center for Medicare and Medicaid Services (CMS) began a Pay for Performance program for hospitals on a pilot basis about two years ago. Hospitals that participate in the pilot project keep statistics on a number of measures in diagnosis groups common in the Medicare population, such as acute myocardial infarction (AMI), coronary artery bypass grafts (CABG), heart failure, pneumonia, and hip and knee replacement. If hospitals achieve certain levels of compliance with the goals of the measures, they are paid 1% to 2% more than the usual DRG payment.

A few examples of the over thirty pay for performance metrics defined by CMS are:

• AMI: aspirin at arrival

• AMI: thrombolytic within 30 minutes of arrival

• AMI: percutaneous coronary intervention received within 120 minutes of arrival

• CABG: post operative hemorrhage or hematoma

• Heart failure: smoking cessation advice/counseling provided

• Pneumonia: oxygenation assessment within 24 hours

• Pneumonia: blood culture collected prior to first antibiotic assessment

• Hip and knee replacement: prophylactic antibiotic received within one hour prior to surgical incision

On January 31, CMS announced that ten large physician groups across the country would…