New regulation seeks to reward hospitals for quality of care

The Medicare agency on Friday issued a proposed rule spelling out how hospitals will be rewarded for providing high-quality care for patients, as required by Democrats' healthcare reform law. Under the program, known as value-based purchasing, hospitals that perform well on measures relating to quality of care and patient experience would get higher Medicare payments.

"Today's proposal is a huge leap forward in improving the quality and safety of America’s hospitals for both Medicare beneficiaries and all Americans," Centers for Medicare and Medicaid Services (CMS) Administrator Donald Berwick said in a statement. "The hospital value-based purchasing program will reward hospitals for improving patients' experiences of care, while making care safer by reducing medical mistakes."

Blair Childs, senior vice president for the Premier healthcare alliance, immediately praised the development in a statement Friday afternoon.

"The Premier healthcare alliance learned firsthand through [its] Hospital Quality Incentive Demonstration (HQID) pilot project that a well-designed value-based purchasing program can achieve better outcomes for patients," he said.

"We are eager to see these results spread nationwide as all hospitals receive added incentives to improve the quality and reliability of care."

The new program is set to start in 2013. CMS is accepting comments until March 8 and will issue a final rule next year.