Hospital officials probably scratch their heads wondering how they control waste and reign in costs for Medicare beneficiaries after those patients have left the hospital, or even before they come in.
How do they keep private practice physicians from ordering useless tests, providing needless care and not reduce quality in the process?
With the new federal "efficiency" or Medicare spending per beneficiary measure now in its first performance period—affecting 20% of a hospital's value-based purchasing incentive payments starting next October, 2014—that's indeed what the federal government is asking hospitals to do.
Starting this year, hospitals will be scored based on the average amount Medicare spends caring for that facility's patients over an "episode" that spans three days before beneficiaries' inpatient admissions to 30 days after discharge. All Medicare Part A and Part B costs are totaled, from home health, physician services, inpatient, outpatient, skilled nursing, durable medical equipment, and hospice.