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CMS Awards High Scorers in Pay-For-Performance Demo Project

By Reed Cooley, CQ Staff

June 17, 2008 -- The Centers for Medicare and Medicaid Services (CMS) has awarded $24.5 million to the top performers in the first three years of a pay-for-performance demonstration project, Premier Inc., a consortium of care providers, said on Tuesday.

The project, a joint venture by CMS and Premier, gave financial rewards to top-performing hospitals based on 30 "nationally standardized and widely accepted care measures," said a press release. The incentives led to a 15.8 percent average increase in overall quality at 250 hospitals, serving 1.1 million people.

"The findings from the first three years of the . . . project clearly show that transparency with rewards for quality achieves a higher level of performance in American hospitals," said Premier president and CEO Richard Norling.

During the project, researchers have seen the variation in quality scores among hospitals diminish, according to the release. "The range of variance among participating hospitals also is closing, as those hospitals in the lower deciles continue to improve their quality scores and close the gap between themselves and the demonstration's top performers," it said.

Officials say that the successes of the project suggest that pay-for-performances measures should be extended to the entire Medicare reimbursement system. "Given these results, it is time to take the next step and implement hospital Value-Based Purchasing for the Medicare program, so that citizens across the nation can benefit from improved safety and quality get the right care, every time," Acting CMS Administrator Kerry Weems said in an agency press release.

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