On February 28, 2013, the acting principal deputy administrator and director of CMS, Jonathan Blum, provided a progress report to the Senate Finance Committee on CMS’s efforts to reform the healthcare delivery system, particularly, initiatives that link payments with quality outcomes.  As part of his statement to the Finance Committee, Blum noted that as a result of such initiatives, CMS has observed a decrease in hospital readmission rates.  According to Blum, the rate had been fluctuating between 18.5 percent and 19.5 percent for the past five years, but in the final quarter of 2012, the thirty-day all-cause readmission rate dropped to 17.8 percent.  This decrease translates to approximately 70,000 fewer readmissions in 2012.  Blum stated that the “decrease is an early sign that our payment and delivery reforms are having an impact.” 

Blum highlighted the Affordable Care Act’s (ACA) Hospital Readmissions Reduction Program, which reduces Medicare payments to hospitals that have high rates of potentially preventable readmissions.  The program, which began in October 2012, measures the readmission rates for three common conditions (heart attack, heart failure, and pneumonia), publishes hospital performance measures and reduces hospital reimbursement for hospitals with high readmissions for these conditions.

In addition, Blum highlighted CMS’s Hospital Value-Based Purchasing Program, which also began in October 2012.  This program adjusts payments to acute care hospitals according to how well they meet Medicare’s quality standards, which are "consistent with evidence-based clinical practices for the provision of high quality care."  Blum noted several other ACA initiatives during his statement to the Finance Committee, which is available here.  In addition, a CMS fact sheet discussing the progress of various healthcare reform initiatives is available here.

Reporter, Jennifer S. Lewin, Atlanta, +1 404 572 3569, jlewin@kslaw.com.