As required by the Deficit Reduction Act of 2005, CMS is developing a Medicare Value-based Purchasing (VBP) program for Prospective Payment System (PPS) Hospitals and preparing to implement the VBP in Fiscal Year 2009. The program will build on Medicare's Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) Program, through which CMS provides financial incentives to PPS hospitals that publicly report their performance on a subset of the Hospital Compare quality measures. CAHs are exempt from the RHQDAPU reporting requirements, but over half of CAHs have chosen to voluntarily report quality data to Hospital Compare. CAHs also are exempt from the VBP program, and the VBP program as currently envisioned does not include an option for voluntary participation by CAHs.

The purpose of this project will be to assess CAH readiness for participation in a VBP similar to that proposed by CMS for PPS hospitals. The project will have two parts. The first part, lead by the University of Minnesota (UMN), will analyze potential ways to evaluate and reward quality performance for CAHs in the VBP program. The second part, a cooperative effort of UMN and the University of North Carolina (UNC), will examine the relationship between CAH quality performance, using the quality measures evaluated in the first part, and financial performance. It will assess the potential financial impact of quality performance rewards for CAHs, by describing the current financial condition of those that would receive such awards and those that would not.

There may be products related to this project; please contact the lead researcher for more information.