Nursing Home Quality Based Purchasing Demonstration
U.S. Department of Health and Human Services
Abt Associates will assist the U.S. Department of Health and Human Services — Centers for Medicare and Medicaid Services (CMS) in the design and implementation of a Nursing Home Value Based Purchasing (NHVBP) demonstration.
The NHVBP demonstration is a CMS "pay-for-performance" initiative to improve the quality of care furnished to Medicare beneficiaries in nursing homes (i.e., those that receive only Part B benefits as well as those that receive Part A benefits, many of whom are also eligible for Medicaid). Under this three-year demonstration project, CMS will assess the performance of nursing homes based on selected quality measures, and then make additional payments to those nursing homes that achieve a higher performance based on those measures. Quality will be assessed based on the following four domains: staffing, appropriate hospitalizations, outcome measures from the minimum data set (MDS), and survey deficiencies.
In the first year of the NHVBP Demonstration, CMS will award points to each nursing home based on how they perform on the quality measures within each of the four domains. Each domain will count towards the nursing home's overall score. The staffing and appropriate hospitalization domains will each be assigned 30 percent of the total score, and the MDS outcomes and survey deficiencies domains will each be assigned 20 percent of the total score. Additional quality measures may be added in the second and third years of the demonstration as deemed appropriate.
CMS will determine which nursing homes qualify for a performance payment based on their overall performance scores. Those homes with the highest scores and those that show the most significant improvement in their scores from the prior year will be eligible to receive incentive payments.
The demonstration will be budget neutral to Medicare. CMS anticipates that certain avoidable hospitalizations may be reduced as a result of improvements in quality of care. The reduction of avoidable hospitalizations and subsequent skilled nursing home stays is expected to result in savings to Medicare. These savings will constitute a pool for each demonstration state which will be used to fund performance payments.
In 2005, CMS contracted with Abt Associates to develop the initial NHVBP demonstration design. The resulting report, based on research results, public stakeholder feedback, and technical expert feedback, presents Abt Associates' recommendations for the NHVBP demonstration. Abt Associates and the University of Colorado Denver Health Sciences Center (UCDHSC) have now contracted with CMS to begin the implementation contractor for this three-year demonstration.
During the initial phase of the demonstration, Abt Associates and UCDHSC will refine the demonstration design as necessary, prepare cost estimates, and support the solicitation of sites. During the implementation phase of the demonstration, Abt Associates and UCDHSC will collect and maintain site data, verify the data submitted by the participants, calculate the quality scores for each measure, calculate the annual incentive payments (preliminary and final reconciliations), analyze year 1 developmental measures data and recommend whether to include any new measures for future years, and conduct an assessment of the refinements needed for national implementation of NHVBP.
