AHA Responds To Medicare Hospital Payment Change Proposal

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Public Health
Article Date: 29 Nov 2007 - 5:00 PDT

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The American Hospital Association on Tuesday said proposed changes that would base Medicare hospital payment on quality-of-care measures could create financial problems for hospitals, CQ HealthBeat reports (CQ HealthBeat, 11/27).

CMS on Monday proposed changes to the Medicare hospital payment system that would reduce payments by a flat rate to create an incentive payment pool for rewarding hospitals that meet quality-of-care thresholds. Under the proposal, which was outlined in a 104-page report to Congress, payments to all facilities would be cut by a flat 2% to 5% to fund the incentive pool for distribution to hospitals that show the most improvement or meet quality-of-care standards.

The proposal would require congressional approval. CMS said the proposal would be cost-neutral to the federal government, and it could save money if Congress does not require that the entire pool be distributed (Kaiser Daily Health Policy Report, 11/27).

Tom Nickels, AHA senior vice president for federal relations, said that although pay for performance in Medicare makes sense, such a system should not be used to reduce provider payments or achieve cost savings in the program.

AHA has "some real concerns about the financial impact of this proposal," Nickels said, adding, "Two to five percent reduction in hospital payments [is] a significant cut, and there's a lot of uncertainty in how that money is returned to the system or if that money is returned to the system." According to Nickels, "Ultimately, we would prefer a pool of new money, additional resources being provided," rather than the proposed payment cuts (CQ HealthBeat, 11/27).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation© 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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