Healthcare Law Blog

HOSPITAL PAYMENT FOR PERFORMANCE: DRIVEN BY PHYSICIAN’S QUALITY

As the fate of the Affordable Care Act is being determined by a divisive Supreme Court, the health care industry is being led or possibly dragged by the Department of Health and Human Services (“HHS”) and the Center for Medicare and Medicaid Services (“CMS”) into new payment systems that focus on quality of care, outcomes and individual provider performance rather than the traditional fee for service payment model.  Even if the Supreme Court finds the Affordable Care Act to be unconstitutional, the change from a payment system focused upon individual services to payment focused upon the quality of the care and patient outcomes are being woven into the fabric of the Medicare reimbursement system.  While change in the system is assured, whether the new models will actually bring about better and more efficient care or just reduce available reimbursement is unknown.  Despite the unknown effect of paying for performance based upon quality, CMS is marching on with new programs and payment penalties.  Physicians, whether employed by a hospital or in a private practice, should be aware of how quality is beginning to drive hospital reimbursement as well as the importance of the physician’s role in determining the quality of care provided by hospitals.  By 2017, 6% of all DRG payments will be subject to quality measures through new CMS payment programs for hospital readmissions, value based purchasing and hospital acquired conditions.  With these new programs determining a significant amount of payment, physicians must understand the programs and direct their services accordingly.  Likewise, hospitals must develop ways to compensate physicians for providing high quality care in a manner that allows hospitals to earn performance payments. More >