1. Humphrey, Carolyn J. MS, RN, FAAN

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Moves to increase quality through mandated activities such as OASIS collection have grown increasingly important. When PPS was tied to some OASIS items, payment was linked to the patient's condition and care needs. Then OBQI arrived, measuring a patient's outcomes at discharge compared to his or her OASIS admission data. Agencies raced to ensure OASIS data were collected uniformly and that their outcomes, as measured in various reports, favorably compared with others in their state, region, and on a national level. When Home Health Compare was launched, outcome data were published on the Web for consumers to examine when choosing a home health agency. This left many still thinking: How else could all this information be used?


Pay-for-Performance is the answer to that question and is the next step in ensuring payers get quality results for what they have purchased. How do we know?


[black small square]The Medicare Modernization Act of 2003 provided a system that allows hospitals to be paid more based on positive patient outcomes.


[black small square]Congress is considering legislation that would pay nursing homes with better outcome scores up to 2% above their yearly rate while reducing pay adjustments for facilities not meeting quality benchmarks.


[black small square]The Centers for Medicare and Medicaid Services (CMS) recently announced a 3-year test of payment bonuses to physician groups starting April 1.


[black small square]CMS Administrator Mark McClellan stated that he intends to implement home care pay for performance in 2005.


[black small square]President Bush's budget proposals emphasize the need for Congressional authorization of quality-based Medicare payments across delivery systems.


[black small square]The Joint Commission on Accreditation of Healthcare Organizations has issued principles to guide the development of these programs.


[black small square]The National Quality Forum is meeting in early 2005 to develop benchmarks for best practices for pay for performance programs.


[black small square]In June, the Institute of Medicine is to make recommendations to Congress on linking provider reimbursement to better outcomes.



The physician demonstration programs are designed to anticipate patient needs, prevent chronic disease complications, avoid hospitalizations, and improve quality of care. Currently, CMS is considering a similar test of home health payments based on "patient-focused...quality improvements" that "cut across settings of care." No one knows how home health agency performance will be measured, although hospitalizations and emergency department visits are potential choices.


Look for more about Pay-for-Performance in upcoming issues.






Remington, L. (2005). 2005 industry trends. The Remington Report, Jan/Feb, 7-13. Schorr, B. (February 4, 2005). Pay-for-quality demos: Today physician groups, tomorrow HHAs . Home Health Line, XXX (5), 1-2.