Medicare Compliance & Reimbursement

3-year incentive project already improving care, says McClellan.

The early word is good on quality of care levels for hospitals participating in Medicare's latest demonstration project, according to the Centers for Medicare and Medicaid Services.

In a speech to the American Hospital Association's annual membership meeting earlier this month, CMS Administrator Mark McClellan said hospitals that are part of Medicare's initial pay-for-performance demonstration project are enjoying enhanced levels of care.

Preliminary reports from more than 270 participating hospitals on their experiences during the demo project's first year have shown marked improvement.

"These early returns demonstrate that using financial incentives to reward better quality patient care works to deliver better care and avoid costly complications for our patients," McClellan said.

The Premier Hospital Quality Incentive Demonstration project is measuring hospital performance on a set of measures of processes and outcomes of care for patients with acute myocardial infarction (heart attack), coronary artery bypass graft, heart failure, hip and knee replacementand pneumonia.

Overall, these five conditions account for a substantial portion of Medicare costs. By achieving improvements in aspects of care that are proven to help patients avoid complications, patients are less likely to require more costly follow-up care for such conditions, and they are more likely to have a better quality of life, according to CMS.

The analysis of first-year performances, conducted by Premier, Inc., found median quality scores for participating hospitals improved in all five of the areas tracked, marked most notably by a 10-percent median jump in quality scores for demo project hospitals treating patients with pneumonia.

Editor's note: Some of Premier, Inc.'s member hospitals are participating in the P4P demonstration project.