“Medicare is changing the way it pays hospitals for services provided to people with Medicare. Instead of only paying for the number of services a hospital provides, Medicare is also paying hospitals for providing high quality services.”
Hospital Readmissions Reduction Program - The Affordable Care Act authorizes Medicare to reduce payments to acute care hospitals with excess readmissions that are paid under CMS's inpatient prospective payment system, beginning October 1, 2012. The program initially focuses on patients who were readmitted for selected high-cost or high-volume conditions, namely, heart attack, heart failure, and pneumonia.
High rates of readmission within 30-days of discharge from the hospitals may result from such factors as:
- Complications from treatments received during a hospital stay
- Inadequate treatment
- Inadequate care coordination and follow up care in the community
- Unexpected worsening of disease after discharge from the hospital
Hospital Value-Based Purchasing (VBP) Program – Medicare now has information about how the quality of a hospital's care affects the payments it gets from Medicare. The Hospital VBP Program, established by the Affordable Care Act, implements a pay-for- performance approach to the payment system that accounts for the largest share of Medicare spending – affecting payment for inpatient stays in approximately 3,000 hospitals across the country.
Under Hospital VBP, Medicare is adjusting a portion of payments to hospitals beginning in Fiscal Year (FY) 2013 based on either:
- How well they perform on each measure compared to all hospitals, or
- How much they improve their own performance on each measure compared to their performance during a prior baseline period.