Medicare Value-Based Purchasing Program - Research Paper Example

? Medicare Value Based Purchasing Program 13-03-12 Medicare Value Based Purchasing Program Introduction: The term “Value Based Purchasing Program” refers to a set of programs designated at providing varying Medicare payment levels on the basis of the quality and efficiency of the Medicare providers. The Medicare Value Based Purchasing Program or commonly known as”pay for performance” programs have been drawn up in an effort to amend flaws and attend poor performance issues in the Medicare statute. The widespread enforcement of Value Based Purchasing Programs has not yet been possible because the implementation involves drastic changes in the Medicare statue to be undertaken. The implementation of separate value based purchasing programs for each of the different Medicare providers requires more than just trumpeting the program. The program has different payment levels and efficiency measuring strategies for hospitals, physicians and other practitioners, home health agencies, ESRD providers and facilities, and skilled nursing facilities. (Reichard 2009). The Policy: The Medicare Value based purchasing programs have been formulated in an effort to facilitate the transformation of the Medicare system from a passive payer of claims to an active purchaser of care. The operational infrastructure of RHQDAPU as established by the CMS has been used as a base for the development of Medicare Value based purchasing programs which includes the following provisions: i. As specified by the President’s FY2006 and FY2007 budgets, the value based purchasing programs are budget neutral and are formulated in accordance with the policy recommendations of Institute of Medicine (IOM) and Medicare Payment Advisory Commission (MedPAC). ii. The existing Medicare performance measurements and reporting infrastructure together with RHQDAPU components have been used as a foundation for the structure of Value Based Purchasing Programs. iii. The Value based purchasing program will support the broad scale transformation of Medicare system into a care purchaser by providing incentive payments to eligible Medicare providers. iv. The first year of establishment would involve collection of data to foster the measurement of quality and efficiency of physicians and other health care personnel. In accordance with the provisions of Patient Protection and Affordable Car Act of 2010, the data collected in the initial year would be utilized in informing the concerned medical individuals about their incentive payments. v. The implementation and coordination of VBP program would be undertaken by CMS, which will also monitor the effectiveness of the program through consensus processes such as Hospital Quality Alliance (HQA), National Quality Forum (NQF), and the Joint Commission on Accreditation of Healthcare Organizations (JCAHO). vi. The reporting requirements specified in Division B, Title 1, Section 109 of Tax Relief and Healthcare Act will be utilized by VBP programs for the measurement of performance and the calculation of incentive payments. vii. The VBP programs will undertake the responsibility of eliminating existing disparities in the health care system. The enforcement of the Value based purchasing programs would not be undertaken without the consent of the concerned medical personnel. viii. A withholding up to 2% of total payments pertaining to specific Medicare providers would be utilized in the evaluation of the incentive pool. All funds collected under the value based purchasing programs will be offered as incentive payments to the eligible participants will not be changed over time. (U.S. Department of Health and Human Services 2007). Models of VPB Programs: The value based purchasing programs are composed of three models which are listed as follows: Model 1: Single Large Purchaser: This involves a large active Medicare supplier which is working collaboratively with other suppliers. If reward incentives are targeted at these individuals then inevitably the overall performance of the health care system as a whole will accelerate. Model 2: Purchaser Coalition: Public and private care purchasers constitute a group eligible to receive incentive rewards through this model of Value Based Purchasing Programs. Model 3: Mixed Coalition: The health care professionals and purchasers involved in the promotion of transparency and incentives are included in this model of Value Based Purchasing Programs. The Need for VBP program: Economical Factors: The United States of America has long since been struggling with escalating health care cost and the paradoxical legacy of poor quality performance of health care system. In accordance with the 2001 Sixth Annual Washington Business Group on Health/Watson Wyatt Survey, payment rewards have a strong positive correlation with the quality of performance in a health care system. The correlation suggests that increasing reward payments inevitably increases the incidence of high quality performance. The defective Medicare system requires incentive payment programs in an effort to fulfill the measures of evidence based quality measurement statistics. The VBP programs utilize the principles of evidence based medicine as a basis for the determination of pay for performance indicators which are employed in the approximation of incentive rewards. In accordance with a study conducted by the Center for Health Care Strategies revealed that the pay for performance programs work by providing incentives and premiums to high performers, on the other hand, the poor performers are penalized. (States in Action Archive Medicaid Pay-for-Performance 2007). Legal Factors: The defective fee schedule of the Medicare system has been a major underlying cause responsible for the poor quality of performance provided by doctors and other health care personnel. In an effort positively amend the situation, thus, there is a dire need of a reward incentive program to amend the worsening situation. The incentives collected are based upon the efficiency of the Medicare providers, thus, the chances of unnecessary payments being made is efficiently ruled out. On the other hand, value based purchasing programs provide an effective way to calculate the incentives to be offered to eligible physicians and other health care practitioners in accordance with the results of quality measurements. The susceptibility of Medicare to improper payments is a chief obstacle in the provision of high quality care and support. The Value based purchasing programs attempt to satisfy the main stakeholders which inevitably increases the quality of care provided by the health care system. (Washington Health Policy 2007). Social and Ethical Factors: The ineffectiveness and poor quality of medicine in the United States of America has been a long standing problem. The situation has been aggravated by the ever increasing susceptibility of the health care system to improper payments and unnecessary expenditure at wrong places. The powerful value based purchasing programs are an asset for eliminating and amending flaws in the Medicare system. The poor quality of clinical performance provided by the Medicare coupled with the need to reduce adverse effects and improve patient safety has increased the desire of higher authorities to formulate and enforce value based purchasing programs in different settings of the Medicare system. The enforcement of value based programs is an effective way to tackle problems associated with the current composition and distribution of healthcare workforce by providing incentive payments to those who really deserve them. (Schilling 2011). Political Factors: The decelerating progress of the Medicare system mirrors the failure of the federal and state government in the provision of quality care to its citizens. In an effort to facilitate the provision of high quality health services the Patient Protection and Affordable Care Act of 2010 has introduced criteria for the measurement of performance and the subsequent calculation of incentives. (DEPARTMENT OF HEALTH AND HUMAN SERVICES 2011). The inclusion of provisions such as “total payments over time is not liable to change over time” and “all funds collected will be utilized in the payment of incentives”, will satisfy the interests of stakeholders such as physicians and other health care practitioners. The higher the satisfaction levels are the better the performance outcomes will be. (States in Action Archive Quality Improvements 2008). Conclusion: The value based purchasing programs aim to aid the Medicare system in excelling in a fast approaching mandatory competition with a reputation and the health of millions of individuals at stake. The value based purchasing programs are authorized by the Patient Protection and Accountable Care Act of 2010 has provided the Centers for Medicare and Medicaid Services with the opportunity to evaluate in the form of incentives or rewards based on the performance of the concerned individual. The CMS has been a passive bystander throughout the history of Medicare system and value based purchasing programs will provide the CMS with an opportunity to play a better role in the provision of high quality healthcare services. By calculating incentive payments for the eligible individuals, the Value based purchasing programs a way o not only amend the Medicare system but also ensure the maintenance of quality assurance by satisfying the stakeholders. (Nelson2012). The Programs are formulated in such a way that they eliminate the chances of unfairness by evaluating of incentive payments of only those individuals who pass the eligibility criteria and meet certain thresholds for quality measurement. (Thorpe et al 2011).The relative or absolute standards will be utilized for the formulation of these thresholds. Proper payments will not ensure a healthier and more efficient working environment but will also decrease the escalating payment costs of medically unnecessary payments. References: Washington Health Policy Week in Review 'Value-Based Purchasing' Fate Uncertain Despite New Demos by John Reichard, CQ HealthBeat Editor, August 24, 2009. (http://www.commonwealthfund.org/Newsletters/Washington-Health-Policy-in-Review/2009/Aug/August-24-2009/Value-Based-Purchasing-Fate-Uncertain-Despite-New-Demos.aspx). States in Action Archive Medicaid Pay-for-Performance: Ongoing Challenges, New Opportunities, February 2007. (http://www.commonwealthfund.org/Newsletters/States-in-Action/2007/Jan/January-February-2007/Profile--In-Depth-Look-at-an-Initiative-that-Is-Making-a-Difference/Medicaid-Pay-for-Performance--Ongoing-Challenges--New-Opportunities.aspx). Value-Driven Health Care Purchasing: Four States that Are Ahead of the Curve by Sharon Silow-Carroll, M.B.A., M.S.W., and Tanya Alteras, M.P.P., August 15, 2007. (http://www.commonwealthfund.org/Publications/Fund-Reports/2007/Aug/Value-Driven-Health-Care-Purchasing--Four-States-that-Are-Ahead-of-the-Curve.aspx). U.S. Department of Health and Human Services Medicare Hospital Value-Based Purchasing Plan, January 17, 2007. (https://www.cms.gov/AcuteInpatientPPS/downloads/hospital_VBP_plan_issues_paper.pdf). Washington Health Policy Week in Review Ways to Change How Medicare Pays for Hospital Care by Mary Agnes Carey, CQ HealthBeat Associate Editor. December 3, 2007. (http://www.commonwealthfund.org/Newsletters/Washington-Health-Policy-in-Review/2007/Dec/Washington-Health-Policy-Week-in-Review---December-3--2007/Ways-to-Change-How-Medicare-Pays-for-Hospital-Care.aspx). States in Action Archive Quality Improvements for Medicare Patients and Providers, September 2008. (http://www.commonwealthfund.org/Newsletters/States-in-Action/2008/Aug/August-September-2008/Federal-Activity/Quality-Improvements-for-Medicare-Patients-and-Providers.aspx). Purchasing High Performance As Health Reform Moves Ahead, Employers Face Tough Questions By Brian Schilling, March 29, 2011. (http://www.commonwealthfund.org/Newsletters/Purchasing-High-Performance/2011/March-29-2011/Perspectives-on-Policy/As-Health-Reform-Moves-Ahead.aspx). DEPARTMENT OF HEALTH AND HUMAN SERVICES, January 17, 2011. (http://www.gpo.gov/fdsys/pkg/FR-2011-01-13/pdf/2011-454.pdf). Value-Based Purchasing Raises the Stakes by Bryn Nelson, PhD 2012. (http://www.the-hospitalist.org/details/article/1056049/Value-Based_Purchasing_Raises_the_Stakes.html). Hospital Value-Based Purchasing Program by Jane Hyatt Thorpe and Chris Weiser, September 14, 2011. (http://www.healthreformgps.org/resources/hospital-value-based-purchasing-program/). Read More