Medicare Program Offers Incentive to Hospital Healthcare Quality Improvement
According to a report from National Public Radio (NPR), October 1, 2012 marked the first day U.S. hospitals would be under Medicare’s Value-Based Purchasing Program; the program withholds 1 percent of the regular funds hospitals receive from Medicare and returns the money after the fiscal year to hospitals that adhere to 20 quality measures.
Medicare reports that the Value-Based Purchasing Program is part of the 2010 Healthcare Reform, which intends to improve healthcare quality by giving hospitals financial incentive to increase the quality of care and decrease the number of patient readmissions. The program also states that financial penalties will increase by 1 percent each year a hospital fails to show improvement and does not reduce the number of readmissions.
NPR stated that Medicare conducted a trial run with old data to determine the possible outcomes of the Value-Based Purchasing Program. The results found that approximately 1,405 hospitals would get money back but still come up short, 550 hospitals would break even, and 1,448 hospitals would end up getting bonuses. Medicare expects that hospitals will forfeit $280 million this year but predicts that approximately $850 million in rewards will be reallocated to hospitals in the program.
Before the Value-Based Purchasing Program, Medicare limited its pay-for-performance rewards to hospitals that voluntarily exhibited care that went above and beyond required quality care protocol. With the implementation of the new program, these proactive hospitals will be financially rewarded while those that fail to improve healthcare quality will be penalized.
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