Hospital Quality Incentive Demonstration (HQID)
Quality Incentive Payment
Calculation of Incentive Award
CMS will use the MedPAR database Fiscal Year 2004, for HQID year 1,
MedPAR year 2005, for HQID year 2, and MedPAR year 2006, for HQID year
3) to determine the dollar incentive amount for each hospital eligible
for an incentive payment. The payment population will be those patients
identified as in the HQID clinical area topics/population determined by
the principal diagnosis or principal procedure (as applicable for the
clinical focus area). The payment populations are those who fall into in
the HQID clinical area population without exclusions being applied and
for the demonstration project year have 30 cases in the HQID clinical
area.
Some hospitals may have patients that fall into more than one disease
area. The same logic is applied and the hospital is paid based on the
clinical area determined by the principal ICD. Example: CABG – 36.10,
36.11, 36.12, 36.13, 36.14, 36.15, 36.16, 36.17, 36.19: Use all CABG
patients as identified by these ICD-9 procedure codes in the principal
procedure field and pay based on the number of CABG patients the
hospital treated. Apply the appropriate 1% or 2 % to the total Medicare
fee for service of these patients.
Note – the clinical measure definition includes these codes in principal
or secondary positions. Just to clarify, the intention of CMS is to
identify patients for payment only by the applicable ICD-9 codes present
in the principal diagnosis or procedure fields. This would ignore any
patients who had the procedure / diagnosis in secondary fields but would
also ignore patients who had any exclusionary criteria (e.g., in the
case of CABG would include patients who did not have an isolated CABG
but would not include patients who had CABG in the secondary procedure
field).
For the top decile hospitals, the bonus was 2 percent of the Diagnosis
Related Group (DRG) based prospective payment for the patients in the
measured condition for all Medicare fee for service beneficiaries.
Hospitals in the second decile were paid a bonus incentive of 1 percent
of the DRG based prospective payment amount. The DRG – based prospective
payment consists of the operating and capital prospective payment for
each Medicare fee for service case, as adjusted for local costs.
The DRG payment does not include payments for disproportionate share
hospitals (DSH), indirect medical education (IME), or any pass-through
payments such as direct graduate medical education (GME). It does not
include outlier payments. Incentive payments will be made annually in a
lump sum. For hospitals not paid using the DRG-based prospective payment
system, CMS will calculate a bonus (or payment adjustment reduction in
year 3) when appropriate using a simulation of DRG-based payments.