Medicare Pay Cuts for Poor Readmission Scores Begin

Value-based purchasing
The Patient Protection and Affordable Care Act calls for all 3,423 eligible acute care hospitals to receive a 1% cut of their Medicare base DRG payments, right off the top.  That 1%, which Medicare officials recently recalculated, is expected to total about $963 million.

The money goes into a pool that is redistributed based on how hospitals scored during a base period and a performance period that ended June 30, 2011. Of the overall score, 30% is based on Hospital Consumer Assessment of Healthcare Providers  (HCAHPS) surveys to reflect patients' favorable experience during their stay, and 70% is based on 12 process measures.

Of those 12, seven deal with prophylactic antibiotic and other medications for surgical patients, and five dealing with care for heart failure, pneumonia,  or heart attack patients.

Officials for the Centers for Medicare & Medicaid Services say they are still working with the numbers, but a "dry run" estimates that some 1,472 better performing hospitals will receive all of their 1% "pool" funds back, plus up to 91 cents for every $100 of Medicare DRG.

About 534 hospitals will receive their 1% "pool" funds back, but no more.