Reimbursement and Pay-for-Performance
March 25, 2013
Reimbursement and Pay-for-Performance
With health care reform taking full effect, various changes are emerging with regard to health care provider reimbursements. Third-party and government payers are rapidly moving toward pay-for-performance approaches that emphasize the quality rather than the quantity of health care services. Pay-for-performance initiatives have the capability of significantly impacting reimbursements based on whether or not and to what extent certain performance outcomes are met. At the same time, health care providers and consumers are both positively and negatively affected by pay-for-performance programs. While the future of pay-for-performance programs is unknown, it can be assumed that health care providers will likely carry increased pressures with regard to outcome responsibilities. With the continual addition of regulations set forth by the Centers for Medicare and Medicaid Services (CMS), demands to consistently provide high-quality care will increase. Pay-for-Performance
Pay-for-performance is a payment model that rewards physicians, hospitals, medical groups, and other healthcare providers with financial incentives based on performance on select measures (Epstein, 2012). These performance measures can cover various aspects of health care delivery including: clinical quality and safety outcomes, efficiency, health care access and availability of care, patient experience and satisfaction, cost of care, administrative compliance, and the adoption of health information technology (Richmond, 2013). By providing direct incentives, physicians and other health care professionals can engage in practices that will hopefully increase the quality of care to patients, while controlling skyrocketing health care costs. While pay-for-performance is not an entirely new concept, the renewed interest can be attributed to the Affordable Care Act and initiatives within the Act that require hospitals and providers who participate in Medicare to engage in specific activities that will transition to pay-for-performance over the course of the next 3-4 years (Richmond, 2013). It must be mentioned that despite best intentions, current research is divided as to whether or not pay-for-performance initiatives actually improve the quality of health care services (Epstein, 2012). Impacting Reimbursements
Pay-for-performance initiatives greatly impact reimbursements. One of the most significant and well-known examples of this impact lies within the Medicare program. The CMS is currently emphasizing that pay-for-performance programs are vital in revamping reimbursement for patient care and that payments should and will be reallocated based on physician and/or hospital performance (Santo, 2013). In fact, government officials expect $850 million in Medicare reimbursement to be reallocated based on overall performance with regard to patient care (Epstein, 2012). The list of outcomes put forth by Medicare is extensive and specific. Each health care provider that provides care to Medicare patients will receive a report from the CMS, which breaks down his or her overall performance and compares him or her to fellow health care providers. Those that meet the highest standards while providing the most cost-efficient care, will be reimbursed the most (Epstein, 2012). Along similar lines, Medicare has also recently implemented a pay-for-performance related program called the Hospital Readmissions Reduction Program. This program reduces Medicare payments by one percent to health care organizations that have exceptionally high rates of avoidable readmission rates for patients experiencing heart attacks, heart failure, or pneumonia (CMS.gov, 2013). Because of this, there is a strong emphasis on health care providers to deliver thorough patient education prior to discharge, appropriate access to various resources on an outpatient basis, and to emphasize compliance...
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