June 3, 2011 -

The Centers for Medicare & Medicaid Services (CMS) today proposed rules that will enable consumers and employers to select higher-quality, lower-cost physicians, hospitals and other health care providers in their area. The new rules will allow organizations that meet certain qualifications access to patient-protected Medicare data to produce public reports on physicians, hospitals and other health care providers. These reports will combine private sector claims data with Medicare claims data to identify which hospitals and doctors provide the highest quality, cost-effective care. This initiative is part of a broader effort by the Obama Administration, made possible by the Affordable Care Act, to improve care and lower costs.

"Making more Medicare data available can make it easier for employers and consumers to make smart decisions about their health care," said CMS Administrator Donald M. Berwick, MD. "Performance reports that include Medicare data will result in higher quality and more cost effective care. And making our health care system more transparent promotes competition and drives costs down."

For many years employers, consumers, providers, and quality measurement organizations have been frustrated with the limited and piecemeal availability of health care claims data. This has led many health plans to create provider performance reports based solely on the health plan's own claims, which often represent only a small proportion of a provider's overall practice.  Providers can receive multiple, sometimes contradictory, reports from different insurers.  Often, providers are unable to appeal or correct what they perceive to be inaccurate results in these reports. These factors sometimes lead to reports that neither providers nor consumers feel they can use.

Today's rules seek to change the quality measurement landscape in a way that increases transparency for all stakeholders. "Qualified entities" that have the capacity to process the data accurately and safely would be required to combine the Medicare claims provided by CMS with private sector claims data, to produce quality reports that are more representative of how providers and suppliers are performing. The reports will help employers and consumers understand more about the relative performance of physicians and other providers in their area. In addition, these rules include strict privacy and security requirements for entities handling Medicare claims data.

This new program would provide for the following activities:

  • CMS would provide standardized extracts of Medicare claims data from Parts A, B, and D to qualified entities. The data can only be used to evaluate provider and supplier performance and to generate public reports detailing the results.
  • The data provided to the qualified entity will cover one or more specified geographic area(s).
  • The qualified entity would pay a fee that covers CMS' cost of making the data available.
  • To receive the Medicare claims data, qualified entities would need to have claims data from other sources. Combining claims data from multiple sources creates a more complete and accurate picture about provider and supplier performance.
  • Publicly reporting the results calculated by the qualified entity is important for transparency in health care and consumer empowerment. To prevent mistakes, qualified entities must share the reports confidentially with providers and suppliers prior to their public release. This gives providers and suppliers an opportunity to review the reports and provide necessary corrections.
  • Publicly released reports would contain aggregated information only, meaning that no individual patient/beneficiary data would be shared or be available.
  • During the application process, qualified entities would need to demonstrate their capabilities to govern the access, use, and security of Medicare claims data. Qualified entities would be subject to strict security and privacy processes.
  • CMS would continually monitor qualified entities, and entities that do not follow these procedures risk sanctions, including termination from the program.

Comments are welcome on this set of proposed rules.

These proposed rules are the next step in our effort to improve health care quality and ensure consumers have access to the best available information, using important new tools provided by the Affordable Care Act.  The Hospital Value-Based Purchasing initiative will reward hospitals for the quality of care they provide to people with Medicare and help reduce health care costs.  This initiative will be based on quality measures that hospitals have been reporting to the Hospital Inpatient Quality Reporting Program since 2004, and that information is posted on the Hospital Compare website.  The Partnership for Patients is bringing together hospitals, doctors, nurses, pharmacists, employers, unions, and state and federal government committed to keeping patients from getting injured or sicker in the health care system and improving transitions between care settings.  CMS will invest up to $1 billion to help drive these changes.  In addition, proposed rules allowing Medicare to pay new Accountable Care Organizations (ACOs) to improve coordination of patient care are also expected to result in better care and lower costs.  This proposed rule will complement the overall effort by the Obama Administration to improve quality, lower costs, and improve health by providing consumers and employers a more accurate picture of provider and supplier performance.

The proposed rule is on display at the Office of the Federal Register at

"On June 8th, the date of actual "publication" in the Federal Register, the NPRM will no longer appear on the above line.  Rather, you'll need to access the Federal Register link for published rules: