Medicare Bill Contains Important Quality Reporting, Pay-For-Performance Provisions

11/25/2003

From: Brian Schilling or Barry Scholl, 202-955-5104 or 202-955-5197 both of the National Committee for Quality Assurance

WASHINGTON, Nov. 25 -- The Medicare Reform bill passed by the Senate today includes important provisions related to quality oversight, aligning pay with performance and improving care for the chronically ill. In particular, the bill introduces new incentives to promote pay-for-performance initiatives and extends requirements for private Medicare plans to publicly report on their performance.

"This bill emphasizes quality improvement strategies that work," said NCQA President Margaret E. O'Kane. "A reward system tied to performance is a good foundation for a smarter and more effective Medicare program."

Pay for Performance

Notably, the Medicare bill includes language directing the National Academy of Sciences' Institute of Medicine to evaluate existing performance measures and develop a strategy for aligning payment and performance within Medicare. NCQA is a leader in the growing move toward rewarding high-quality performers in the health care system and participates in both the Bridges to Excellence coalition and the Pay-for-Performance initiative in California. Other Important Provisions

-- Extending Quality Reporting Requirements to Preferred Provider Organizations (PPOs): Currently under the Medicare program, participating health maintenance organizations (HMOs) and local PPOs are required to report selected Health Plan Employer Data and Information Set (HEDIS() clinical measures and Consumer Assessment of Health Plans (CAHPS() member satisfaction information on a regular basis. The bill passed today would extend reporting requirements to new regional PPOs scheduled to join the program in 2006.

-- Additional Deeming Arrangements: HMOs participating in Medicare currently have the option of undergoing an annual quality audit by Medicare staff or, alternately, by private accrediting organizations such as NCQA that have been approved or "deemed" by Medicare. The bill calls for Medicare to consider deeming NCQA and others to review PPOs as well.

-- Encouraging Hospitals to Report on Performance: The bill includes a substantial financial incentive designed to encourage hospitals to participate in the Centers for Medicare & Medicaid Services' (CMS) voluntary Hospital Quality Incentive Data initiative. Hospitals that participate in the project will receive slightly larger (0.4 percent) payments for inpatient care than those that do not.

-- Research on Changing Physician Behavior: To help inform Medicare's efforts to drive future improvements, the bill includes funding for a 5-year demonstration project to evaluate how providing financial incentives or distributing guidelines can change the way physicians practice.

-- Improving Care for the Chronically Ill: The bill calls for the Secretary of Health and Human Services to study and develop demonstration programs to improve care for the chronically ill while reducing associated costs. Study after study has shown that the chronically ill frequently do not receive best practice care.

NCQA is a private, non-profit organization dedicated to improving health care quality. NCQA accredits and certifies a wide range of health care organizations and manages the evolution of HEDIS, the tool the nation's health plans use to measure and report on their performance. NCQA is committed to providing health care quality information through the Web, media and data licensing agreements in order to help consumers, employers and others make more informed health care choices.