Annals of Health Law
READY OR NOT
create disincentives for overuse, under-use or misuse of care. 3 CMS does,
however, recognize that these trends jeopardize the high quality care it
expects to purchase and that the current payment model is not sustainable. 4
Value-based purchasing (“VBP”) is the centerpiece of the HHS mission
to improve quality and achieve value for Medicare. In response to
mandates set forth in the Patient Protection and Affordable Care Act of
2010 (“PPACA”), 5 CMS is implementing this innovative concept by
incentivizing quality improvement through payment reform. 6 VBP allows
CMS to reward providers for care delivered in a safe, effective and efficient
manner. 7 CMS is positioning VBP programs to be instrumental in
accomplishing its three-pronged strategy to shape its quality of care agenda
for the Medicare program. This agenda is comprised of incentivizing
quality through payment reforms, driving quality of care through public
reporting, and enforcing quality of care through the False Claims Act
(“FCA”). 8 Thus, CMS aims to improve the quality of the health care it
purchases by enticing providers to change their behaviors, and likewise
holding them accountable for care delivered through a transparency
VBP programs serve as the reimbursement vehicle that ties government
payment to how well providers adhere to evidence-based practice standards
3. See Inst. of Med. of the Nat’l Acads., Rewarding Provider Performance: Aligning
Incentives in Medicare (Sept. 2006), available at http://www.iom.edu/~/media/Files/
4. See, e.g., CMS ROADMAP, supra note 1; Daniel F. Shay, PQRS and its Penumbra, in
HEALTH LAW HANDBOOK (Alice G. Gosfield, ed., 2012), available at http://
5. See Patient Protection and Affordable Care Act, Pub. L. 111-148, §3001, 124 Stat.
119 (2010) (enacting VBP for inpatient hospital care for discharges occurring on or after
October 1, 2012).
6. See CMS ROADMAP, supra note 1.
7. See id.
8. See, e.g., Janice A. Anderson & Susan M. Nedza, Quality of Care: Transforming
Health Care Through Payment Reform, Public Reporting and Enforcement, Address at the
12th Annual HCCA Conference (Aug. 13-16, 2008), available at
(discussing the three-pronged quality strategy); see also Cheryl L. Wagonhurst, Pay for
Performance Documentation and Coding, Address at the HCCA Quality of Care Compliance
Conference (Oct. 11, 2009) (this material is no longer publicly available but was last
accessed on Apr. 19, 2012 at http://www.hcca-qualitycare-conference.org/
past/2009/502_Wagonhurst.pdf); Cheryl L. Wagonhurst et al., The Government’s Three-Prong Approach to Quality of Care and Practical Strategies for Operational Improvement
and Risk Reduction (Mar. 2009) (this material is no longer publicly available but was last
accessed on Apr. 23, 2012 at http://hcca-info.org/AM/Template.cfm?
Section=Home&TEMPLATE=/CM/ ContentDisplay.cfm&CONTENTID=8297) (also
discussing the three-pronged quality strategy).