CMS proposes higher hospital payments in value-based purchasing

The Centers for Medicare & Medicaid Services yesterday proposed a rule that would enhance the hospital value-based purchasing program (VBP) set to begin in October, helping Medicare move to a system that rewards value, not volume, the agency announced yesterday.

The proposed rule will increase payment rates to general acute care hospitals by 0.9 percent in fiscal year 2013, after allowing for other payment and regulatory changes. Overall, CMS expects total Medicare spending on inpatient hospital services will rise by approximately $175 million next year.

"The proposed rule would implement key elements of the Affordable Care Act's value-based purchasing program, as well as the hospital readmissions reduction program," CMS Acting Administrator Marilyn Tavenner said in a statement. "It is part of a comprehensive strategy to use Medicare's payment systems to foster better care and better value in all settings, thereby reducing overall Medicare spending."

With the new proposed rule, CMS wants to add the Medicare spending per-beneficiary measure to the hospital VBP program, which would affect payments beginning in 2015. The new measure would include Part A and Part B payments and would be risk-adjusted for age and severity of illness.

The new rule would adjust the Hospital Inpatient Quality Reporting program, dropping the 72 quality measures to 59 in 2015 and then to 60 in 2016.

CMS will accept comments on the proposed rule until June 25 and publish a final rule by August.

To learn more:
- read the CMS statement
- here's the proposed rule (.pdf)