Reactions to CMS’ P4P proposal run the gamut

CMS’ plan to reduce Medicare payments by 2%–5% and allow hospitals to buy back the money through top-notch performance or dramatic improvement has prompted plaudits from some, disappointment from others, and confusion from critics.

In November 2007, the federal agency submitted its value-based purchasing program (VBP)—also known as pay for performance (P4P)—proposal to Congress. The proposal would reduce diagnostic-related group (DRG) payments by 2%–5% for Medicare patients.