Kaiser Health News Analysis: CMS Will Cut Pay to Nearly 1,500 Hospitals in FY 2014

According to an article posted online by Kaiser Health News (KHN) on Nov. 14, the Centers for Medicare & Medicaid Services (CMS) will be cutting payments to nearly 1,500 U.S. hospitals in federal fiscal year (FY) 2014, based on hospitals’ performance in the Hospital Value-Based Purchasing and Readmissions Reduction Programs mandated by the Affordable Care Act (ACA), as calculated by staff at KHN.

As the KHN article points out, “The Value-Based Purchasing payments for the 2014 federal fiscal year are determined by how hospitals scored on three sets of measures. The first are 13 ‘measures of timely and effective care’ also known as ‘process measures. These rate how often hospitals adhered to these clinical guidelines,” such as the percentage of heart attack patients given medication to avert blood clots within 30 minutes of arrival at the hospital. The second set of eight measures are taken from patient satisfaction surveys, and focus primarily on such elements as clinician and staff communication with patients, and other aspects of the patient experience. And the third set of measures uses Medicare mortality rates for heart attack, heart failure, and pneumonia.

For this year, the process measures account for 45 percent of a hospital’s score; the patient satisfaction measures account for 30 percent; and the mortality rates, for 25 percent. Hospitals stand to lose or gain up to 1.25 percent of their regular Medicare reimbursement based on those calculations.

In addition, for the readmissions program, CMS calculated an excess readmission rate for patients first presenting with one or more of three conditions: heart failure, heart attack, and pneumonia. Hospitals in FY 2014 face up to a 2-percent payment reduction for what CMS considers avoidable readmissions.

The figure of nearly 1,500 hospitals nationwide derives from calculations made by staff at Kaiser Health News, and has not been publicly confirmed by CMS.