Exploring Episode-Based Approaches for Medicare Performance Measurement, Accountability and Payment Final Report. 3. Performance Measures Reported to Medicare


In 2002, CMS launched the Quality Initiative, an effort designed to assure quality health care for all Americans through performance accountability and public disclosure of performance results (http://www.cms.hhs.gov, 2008).  The roll-out of this program has occurred over the past few years, continues to expand, and includes performance measurement in six different Medicare health care settings:

  • The Nursing Home Quality Initiative (NHQI) in 2002;
  • The Home Health Quality Initiative (HHQI) in 2003;
  • The Hospital Quality Initiative (HQI) in 2003;
  • The End Stage Renal Disease (ESRD) Quality Initiative, in 2004;
  • The Physician Quality Reporting Initiative (PQRI) in 2006; and
  • The Hospital Outpatient Quality Data Reporting Program (HOP QDRP) in 2008.

To understand whether performance measurement is aligned across the various components of the current FFS payment system, we cataloged the six Medicare performance measurement programs and examined the extent to which these programs are aligned in terms of the clinical conditions measured and measures included.

Across the various settings, CMS collects a total of 249 performance measures for hospital inpatient, hospital outpatient, physicians/practitioners/therapists, skilled nursing facilities (SNF), home health agencies, and dialysis facilities through a variety of methods and with varying types and levels of incentives attached. Four settings have financial incentives associated with the reporting of measures (i.e., “pay for reporting” programs). Reporting performance measures for hospital inpatient, hospital outpatient and home health agencies, while voluntary, is required in order for these providers to receive the full annual payment update/market basket update; providers that do not report the measures forgo 2 percentage points of the update.  For the Physician Quality Reporting Initiative (PQRI), participation is voluntary and physicians who submit data on the specified performance measures received a bonus (subject to a cap for reporting in 2007) of 1.5% percent of allowed charges for covered Medicare physician fee schedule services for 2007 and 2008.  For 2009 and 2010, the bonus amount is increased to 2% of allowed charges.

Public reporting of performance results occurs for providers in four of the settings as of March 2008: (1) hospital inpatient, (2) home health agencies (HHAs), (3) skilled nursing facilities (SNFs) and (4) dialysis facilities. At this time, physicians participating in PQRI receive a confidential feedback report containing their reporting and performance information mid-year following the end of the PQRI reporting period. 

The data used to construct the SNF and home health measures are collected through existing assessment and collection tools. Dialysis facility measures are constructed from Medicare administrative data sources, while new HCPC codes have been developed to enable the construction of measures from physician claims data for PQRI.  In 2008, CMS allowed physicians to submit performance data via registries, and seeks to expand registry submissions in 2009 and continue to test data submissions from electronic health records (EHRs) (CMS, 2008). Hospital inpatient and hospital outpatient measures are based on data collected from electronic or paper medical records.

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