Medicare launches pay-for-performance efforts under health law

Medicare is launching new initiatives to reward hospitals for good clinical practices and penalize them for high readmission rates.

The efforts, mandated by President Obama's healthcare reform law, are meant to encourage better and more standardized care in the Medicare program.

Starting Monday, Medicare will retain 1 percent of its hospital reimbursements and redistribute the money based on how well hospitals adhere to clinical guidelines and score on patient-satisfaction surveys.


If a hospital tends to follow a recorded protocol, for example, it is more likely to receive some of the estimated $850 million in play this year.

Such a protocol might be giving heart attack patients medication to avert blood clots within 30 minutes, or taking a blood culture from pneumonia patients before administering antibiotics.

Patient surveys, meanwhile, will assess issues like doctor-patient communication and the quality of guidance given upon discharge.

Also on Monday, as part of a separate effort, Medicare will begin penalizing hospitals with high readmission rates among heart attack, heart failure and pneumonia patients.

Hospitals that do poorly will lose 1 percent of their reimbursements, or about $280 million total this year, according to Kaiser Health News.

Both initiatives — to reward hospital quality and discourage high readmission rates — will expand in the coming years to involve greater financial incentives, or penalties, and stricter performance standards.