GOVERNMENTNew Jersey court derails Medicare incentive pay projectHospitals and CMS are reviewing the ruling to determine the next step.By Tanya Albert, amednews staff. May 10, 2004. A federal court in New Jersey put the brakes on a Medicare demonstration project that would have let physicians and hospitals work together to cut health care costs -- while still preserving quality -- and then share in the savings. The eight New Jersey hospitals chosen for the "Hospital Performance-Based Incentives Demonstration" had lined up physicians to participate. Doctors and hospitals would cut spending through such activities as developing more efficient ways of doing medical and surgical procedures and preventing Medicare patients from getting duplicative services. The New Jersey Hospital Assn., which applied to test the program, estimated that savings could amount to as much as 25% of Medicare Part B fees at each hospital. Based on the savings, the hospitals would make incentive payments to physicians as a reward for a combination of high quality and efficient care. These awards would be similar to incentives managed care organizations pay. Three New Jersey hospitals, each part of the Robert Wood Johnson Health System, that were not chosen to participate in the pilot program sued Dept. of Health and Human Services Secretary Tommy G. Thompson and other government officials in federal court to expand the project. "Our goal in bringing this case wasn't to end the demonstration project, but to expand it to other hospitals and doctors throughout the state, improve its design and protect nonparticipating hospitals from an adverse economic impact," said Harvey A. Holzberg, president of Robert Wood Johnson University Hospital in New Brunswick and president of the Robert Wood Johnson Health System. [...]Full text of American Medical News content is available to AMA members and paid subscribers.
Copyright 2004 American Medical Association. All rights reserved.
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