Press release



The vast majority of the nation’s hospitals are reporting valuable data about the quality of the care they provide to Medicare beneficiaries and will receive a full payment rate increase of 3.3 percent next year according to an announcement today by Kerry Weems, acting administrator of the Centers for Medicare & Medicaid Services.


            Under the Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) program, hospitals that reported certain quality measures and met other requirements are entitled to receive the full market basket update for FY 2008.  Although participation in the program is voluntary, section 5001(a)(2) of the Deficit Reduction Act of 2005 (DRA) provides that the market basket update under the inpatient prospective payment system (IPPS) will be reduced by 2.0 percentage points for hospitals that do not participate in quality reporting or do not meet the requirements associated with reporting the quality measures (for FY 2008, this reduces the update to 1.3 percent).  The market basket, a fixed-weight index, is a hospital-specific measure of inflation for the costs of goods and services used by hospitals to furnish inpatient services to Medicare beneficiaries.


The reporting of hospital quality data under the RHQDAPU program is part of a program-wide effort to transform Medicare from being a passive payer of health care services to a prudent purchaser of high quality care for people with Medicare.  The program was originally authorized under section 501(b) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) and was launched by CMS in FY 2005 with 10 reportable measures and a 0.4 market basket percentage point reduction for IPPS hospitals that did not meet program requirements.


            In the DRA, Congress reinforced CMS’s efforts by increasing to 2.0 percentage points the market basket reduction for IPPS hospitals that do not report on certain quality measures in accordance with program requirements, and directed CMS to increase the number of measures.  During FY 2007, participating hospitals reported on measures related to the quality of care they provided to patients with heart failure, heart disease, and pneumonia, and patients having surgery.


            “Medicare payment must encourage reliable, efficient care, rather than reimbursement based on the quantity of services provided and resources consumed,” Weems said. “Quality of care is critical and we must continue our efforts to provide appropriate measures that are clearly defined and widely agreed upon and which benefit all consumers of health care.”


CMS has continued to refine the quality measures since it launched the RHQDAPU program.  For FY 2008, hospitals will be required to report on 27 quality measures, including 24 processes of care measures for discharges on or after January 1, 2007. The new quality measures for FY 2008 include mortality data, as well as data collected from patient surveys about their perceptions of the care they received during an inpatient stay. 


            “Our beneficiaries pay attention to quality measures.  Indeed, in 2006, our Hospital Compare Web site received 36 million hits, nearly 100,000 a day.  This activity demonstrates consumers are interested in this information – and we have more information on patient satisfaction coming soon,” added Weems. 


            CMS implemented the patient satisfaction survey, known as the Hospital Consumer Assessment of Healthcare Providers and Systems, or HCAHPS, as part of the RHQDAPU program for FY 2008.  The survey asks about consumer perceptions of the care they have received during a hospital stay, such as responsiveness of hospital staff, cleanliness and the overall rating of the hospital.  Beginning with discharges on or after July 1, 2007, this survey will be one of the quality measures that must be reported by IPPS hospitals in order to receive the full update.


            “Consumers are encouraged to use this information as a snapshot of the quality of care being delivered,” said Barry M. Straube, M.D., CMS chief medical officer and director of the Office of Clinical Standards and Quality. “Consumers should use the information to have a conversation with their doctors and visit the hospital to better understand performance of the measures and actions taken to improve performance.” 


            Of the nation’s 3,506 acute care hospitals eligible to participate in the RHQDAPU program in FY 2007, 93 percent participated and met requirements; 6 percent failed to meet requirements; and 1 percent chose not to participate.  Information gleaned from the reporting will be made available to the public on the Medicare beneficiary Web site,, under the “Hospital Compare” topic.


            All of the nation’s IPPS hospitals are eligible to participate in the RHQDAPU program. The program does not, however, apply to other types of hospitals, or to hospital departments that are not paid under the IPPS.  Hospitals not meeting RHQDAPU program requirements for FY 2007 may submit a letter to CMS outlining reasons for requesting reconsideration by November 1, 2007. 


            There are other comparative databases available at, including Nursing Home Compare, Home Health Compare, Dialysis Facility Compare and the Medicare Personal Plan Finder.  


            Under another DRA provision, hospitals will be required to report on eight specified conditions when present on admission, which if included on the hospital claim as a secondary diagnosis will result in a higher payment for the inpatient stay.  The reporting requirement is effective for discharges on or after October 1, 2007.  Beginning with discharges on or after October 1, 2008, hospitals will no longer receive the higher payment if these conditions are present as secondary diagnosis at discharge, and were not reported as present on admission.  This provision will give hospitals an incentive to more thoroughly assess patients on admission, and ensure their safety during the hospital stay.


            In another effort to improve quality of care in hospital inpatient stays, CMS is implementing the most comprehensive revision of the diagnosis related groups (DRGs) that serve as the basis for payment for inpatient services since the inception of the hospital inpatient prospective payment system in 1983.  The new Medicare Severity DRGs (or MS-DRGs) have been reconfigured to better reflect the severity of the patient’s condition, so that hospitals will be paid more for treating the complicated cases.


            CMS uses a multi-pronged approach to improve the quality of care furnished to people with Medicare coverage by supporting and providing incentives to facilities – and the clinicians and professionals working in those settings – in their efforts to achieve superior care.  CMS uses:


  • Ongoing enforcement through state survey agencies and CMS;
  • New professional and consumer hospital quality information on our Web sites, and and at 1-800-MEDICARE;
  • Demonstration projects to test the effectiveness of rewards for superior performance on certain measures of quality;
  • Continual, community-based quality improvement programs through our Quality Improvement Organizations; and,
  • Collaboration and partnerships to make full use of available knowledge and resources.


            For more information on Hospital Quality Data for Annual Payment Update, visit


            A complete list of the measures to be reported as part of the FY 2008 RHQDAPU program is attached as an Appendix.







Topic  & Quality Measure

Heart Attack (Acute Myocardial Infarction)

 â— Aspirin at arrival *

 â— Aspirin prescribed at discharge *

 â— ACE inhibitor (ACE-I) or Angiotensin Receptor Blocker (ARBs) for left ventricular systolic dysfunction *

 â— Beta blocker at arrival *

 â— Beta blocker prescribed at discharge *

 â— Fibrinolytic (thrombolytic) agent received within 30 minutes of hospital arrival**

 â— Percutaneous Coronary Intervention (PCI) received within 120 minutes of hospital arrival**

 â— Adult smoking cessation advice/counseling**

Heart Failure (HF)

 â— Left ventricular function assessment *

 â— ACE inhibitor (ACE-I) or Angiotensin Receptor Blocker (ARBs) for left ventricular systolic dysfunction *

 â— Discharge instructions**

 â— Adult smoking cessation advice/counseling**

Pneumonia (PNE)

 â— Initial antibiotic received within 4 hours of hospital arrival *

 â— Oxygenation assessment *

 â— Pneumococcal vaccination status *

 â— Blood culture performed before first antibiotic received in hospital**

 â— Adult smoking cessation advice/counseling**

 â— Appropriate initial antibiotic selection**

 â— Influenza vaccination status**

Surgical Care Improvement Project (SCIP) – named SIP for discharges prior to July 2006 (3Q06)

 â— Prophylactic antibiotic received within 1 hour prior to surgical incision**

 â— Prophylactic antibiotics discontinued within 24 hours after surgery end time**

 â— SCIP-VTE 1:  Venous thromboembolism (VTE) prophylaxis ordered for surgery patients***

 â— SCIP-VTE 2:  VTE prophylaxis within 24 hours pre/post surgery***

 â— SCIP Infection 2:  Prophylactic antibiotic selection for surgical patients***

Mortality Measures (Medicare patients)

 â— Acute Myocardial Infarction 30-day mortality ­Medicare patients***

 â— Heart Failure 30-day mortality ­Medicare patients***

Patients’ Experience of Care

 â— HCAHPS patient survey***


            *Measure included in 10 measure starter set

            **Measure included in 21 measure expanded set

            ***Measure added in Calendar Year 2007 OPPS Final Rule