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Medicare Offers Financial Incentives to Hospitals for Improved Care, Error Reduction

The Los Angeles Times reported that the “Obama administration issued a final regulation to reward hospitals that provide high-quality care, the first in a series of steps that are designed to fundamentally transform the way that the federal government pays for healthcare.” Indeed, the practice is “commonplace in many industries,” but “setting quality benchmarks and tying them to compensation will be new for many of the nation’s hospitals. It is a strategy that Medicare has never used before on a systematic basis.”

Yet, says CMS Administrator Donald Berwick, “it is the most important answer to the healthcare sustainability issue, achieving lower costs through high quality is the right way to do it,” Reuters reports. According to CMS data, nearly $4.4 billion was spent caring for patients who were harmed while hospitalized in 2009.

Readmissions to the “hospital cost Medicare another $26 billion,” CQ “Healthbeat” reported. But the new program “will save up to $35 billion in health costs over the next three years, including $10 billion in Medicare,” CMS estimates. “Starting Oct. 1, 2012, hospitals will get paid more if they ensure patients get care within 90 minutes of possibly having a heart attack,” as will “those that provide care within a 24-hour window to surgery patients to prevent blood clots; communicate detailed instructions to heart failure patients on follow-up care once they leave the hospital; and ensure their facilities are clean and well-maintained.”

The agency “will take into account how well patients rank the quality of the care they received during their hospital stay,” MedPage Today reports. “Adherence to the quality care measures will be weighted at 70% and patient satisfaction scores will be weighted at 30% in determining payments, CMS officials said.” In short, the “release of the Hospital Value-Based Purchasing Program rule brings the Obama administration one step closer to something it has long proposed: paying hospitals for improvements in patient health, rather than for the number of services received during a hospital stay.”

According to the Hill “Healthwatch” blog, “some 3,500 hospitals will be eligible for $850 million in performance incentives for fiscal 2013.” And “Berwick said the new regulations would acknowledge both achievements and improvements, so that cash-strapped hospitals that serve poor areas aren’t at a disadvantage.” He added, “We need all boats to rise on the rising tide of quality.”

From the American Association for Justice news release.

Bob Kraft

I am a Dallas, Texas lawyer who has had the privilege of helping thousands of clients since 1971 in the areas of Personal Injury law and Social Security Disability.

About This Blog

The title of this blog reflects my attitude toward those government agencies and insurance companies that routinely mistreat injured or disabled people. As a Dallas, Texas lawyer, I've spent more than 45 years trying to help those poor folk, and I have been frustrated daily by the actions of the people on the other side of their claims. (Sorry if I offended you...)

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