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December 5, 2006

Medicare Home Health Pay for Performance Demonstration

The Centers for Medicare and Medicaid Services (CMS) is working with Abt Associates to design a Home Health Pay-for-Performance demonstration to determine the impact of incentive payments to Home Health Agencies (HHAs) for improving the quality of care of Medicare beneficiaries who receive home health services.

Pay-for-Performance (P4P) initiatives are a CMS priority. CMS believes that the Medicare program should seek opportunities to encourage improvements in the quality of care provided to all Medicare beneficiaries.  For purposes of this demonstration, P4P can be defined as any purchasing effort aimed at improving health care quality, efficiency and outcomes. Theoretically, as the quality of care is improved for those under the care of an HHA, there is an expectation that patients will be less likely to require additional, more costly services, such as emergency care or acute hospitalization. Reductions in the need for additional, more costly care should result in overall cost savings to Medicare.

This demonstration will introduce an initiative to apply P4P incentive payment methodology to a representative sample of Medicare home health agencies. It is the purpose of this demonstration to determine the impact of offering incentive payments to quality of care results in reduced need for additional services and, consequently, reduces cost. The demonstration design shall be budget neutral, which means incentive funds conducted over a 48-month period in two phases beginning in September 2006.

Phase I will cover demonstration design, implementation and reporting tasks of a 30-month period, beginning October 1, 2006 and continuing until March 31, 2009. Phase II will entail ongoing monitoring of the demonstration, completing the collection and analysis of HH P4P data, determining final incentive payment amounts and ensuring appropriate incentive payments have been made by the fiscal intermediary. The period of performance for Phase II will be for 18-months, from April 1, 2009 through September 30, 2010.

This P4P demonstration is the topic of the December 13, 2006 CMS Open Door Forum. Click here for the presenation.





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