AHA Responds To Medicare Hospital Payment Change Proposal

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Medicare Hospital Payment

The American Hospital Associationon Tuesday said proposed changes that would base Medicare hospitalpayment on quality-of-care measures could create financial problems forhospitals, CQ HealthBeat reports (CQ HealthBeat, 11/27).

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

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

TomNickels, AHA senior vice president for federal relations, said thatalthough pay for performance in Medicare makes sense, such a systemshould not be used to reduce provider payments or achieve cost savingsin the program.

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

Reprinted with permission from kaisernetwork.org. Youcan view the entire Kaiser DailyHealth Policy Report, search the archives, and sign up for email deliveryat kaisernetwork.org/email. The Kaiser Daily HealthPolicy Report is published for kaisernetwork.org, a free service of The HenryJ. Kaiser Family Foundation.

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