Medicare and Medicaid Pay-for-Performance

1 Medicare and Medicaid Pay-for-Performance The use of paper charts in hospitals has a history dating many years. However, paper charts are problematic and hinder practice growth. Paper-based systems require more time to retrieve and analyze data to make practical decisions. Hospitals that use paper charts require more staff to register, store and organize files for easier retrieval. Hoyt and Hersh (2018) noted that paper charts’ storage is not scalable besides having an inconsistent layout. The lack of clear audit trails and version history is also a significant issue with paper recording systems.

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2 It is sometimes impossible to include changes in the patients’ records or identify the person who made specific changes. These problems make it hard for insurance companies to reimburse certain services. Recently healthcare facilities are slowly overhauling their system and implementing a competent system backed by health information technology to enhance service delivery and reimbursements.

Electronic Health Recording System Impact on the Facility The use of a health information technology system in hospitals is a practical solution to the challenges associated with paper charts. The EHRs system is not only secure but also easier to audit. The system enables clinicians to keep track of patients and services delivered to individuals (Wulfovich & Meyers, 2019). EHRs provide a customized format that helps maintain the legibility and accuracy of data.

Importantly, the EHR system helps capture data on a patient’s medical condition, tests, and treatment. This data is crucial in the determination of the severity of illness. Health conditions are classified into four major groups: moderate, minor, major, and extreme (Bredenkamp, Bales & Kahur, 2020). The severity of the disease provides the basis for evaluating the use of resources in hospitals. Hospitals also use this data to establish guidelines for patient care. The consumption of healthcare resources increases with an increase in the severity of illness. These patients also experience a longer stay in hospital than their counterparts with lower severity of illness scores in the same diagnosis-related groups (Bredenkamp, Bales & Kahur, 2020). The severity of illness is commonly utilized throughout the United States for purposes of adjusting for patient complexity. It enables clinicians to compare complication rates, resource use, and length of stay. The EHR helps coders effectively integrate the case-mix index and share health data with relevant parties. It is commonly utilized throughout the United States

3 for purposes of adjusting for patient complexity. It enables clinicians to compare complication rates, resource use, and length of stay (Bredenkamp, Bales & Kahur, 2020). The reimbursement process is easier if all healthcare tasks are accurately captured in the system.

The CMS Pay-for-performance (P4P) Model The pay-for-performance is a reimbursement model adopted by Medicare to ensure providers are reimbursed for quality services delivered to their clients rather than the number of patients served. Szalados (2021) noted that this model was developed to improve the quality of care given to different patient populations through financial incentives. The chief goal of the P4P model is to promote the right of patients to receive the right care. This model help promote safer, more effective, and reliable care for beneficiaries. It can potentially enhance care provider’s compliance with patient care guidelines and improve clinical care outcomes.

The impact of P4P on Health Finance Health financing describes the elements of the healthcare system concerned with the accumulation and allocation of resources to various healthcare activities. It sets the base for sufficient resource allocation to specific health tasks. The pay-for-performance model can positively impact health finance. This model ensures that providers and hospitals are adequately compensated, improving the healthcare system revenue base (NEJM Catalyst, 2018).

Importantly, the P4P provides financial incentives to healthcare facilities once they achieve the pre-specified performance targets. These incentives help to strengthen the financial base of health facilities across low and middle-income settings.

The Impact of the P4P on the Facility The P4P model has a positive impact on health finance. Since the payer redistributes funds to encourage quality service delivery and best patient outcomes, hospitals that achieve

4 these objectives have higher reimbursements (NEJM Catalyst, 2018). The pay-for-performance model improves the quality of healthcare. Care providers redirect their focus of care quality rather than quantity. The model establishes a base where clinicians strive to offer quality care and improve care for their clients. However, as noted by NEJM Catalyst (2018), hospitals can be penalized for poor performance, affecting their financial base. Penalties aim to discourage physicians from practices that might jeopardize care outcomes.

Conclusion Hospitals are shifting towards electronic health recording to facilitate reimbursement for quality services governed by the CMS pay-for-performance model. The electronic system enables providers to capture data that fully represents the services provided to the patients. The P4P encourages the provision of quality care to achieve better care outcomes.

5 References Hoyt, R. E., & Hersh, W. R. (2018). Health informatics: Practical guide. Informatics Education NEJM Catalyst, (2018). What is pay for performance in healthcare? NEJM Catalyst, 4(2). https://catalyst.nejm.org/doi/full/10.1056/CAT.18.0245 Szalados, J. E. (2021). The medical-legal aspects of acute care medicine: A resource for clinicians, administrators, and risk managers. Cham: Springer.

Wulfovich, S., & Meyers, A. D. (2019). Digital health entrepreneurship. Springer Bredenkamp, C., Bales, S., & Kahur, K. (2020). Transition to diagnosis-related group (DRG) payments for health: Lessons from case studies. world Bank Group