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The List: Top NJ Hospitals Getting Medicare Bonuses for Quality, Efficiency

‘Value-based purchasing’ features bonuses and penalties to hospitals, part of shift toward outcomes rather than services rendered

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The federal government is increasing the amount of the Medicare payments it makes to hospitals according to their performance on variety of measures.

The federal Hospital Value-Based Purchasing program is one of three initiatives specified by the 2010 Affordable Care Act used to adjust hospitals’ Medicare reimbursements.

In this program, the amount that hospitals receive for Medicare patients is moved up or down based on how the facilities perform in four areas: how patients rated their experiences with the hospital; the patients’ outcomes for heart attacks, heart failure and, pneumonia, as well as the bloodstream infection rate from hospital-installed catheters; efficiency, as measured by spending per Medicare beneficiary; and whether hospitals are following appropriate processes to treat certain serious conditions.

The initiative affects up to 1.5 percent of Medicare payments, up from 1.25 percent last year. It is being phased in over a five-year period, reaching 2 percent in 2016-2017.

The program is being implemented alongside two other programs: one that penalizes hospitals up to 3 percent of Medicare payments for having high rates of readmitting patients, and another that hits hospitals with a 1 percent penalty if they have a relatively high rate of hospital-acquired infections -- including bloodstream infections and other infections -- as well as other conditions.

Hospital Value-Based Purchasing is the only one of the three ACA programs that provides a bonus to good performers.

New Jersey had the second-lowest rate of any state for hospitals that received a bonus, behind only Nevada, as well as the District of Columbia, according to a Kaiser Health News analysis.

Still, there were some good performers, led by Deborah Heart and Lung Center in Browns Mills, which received a bonus of 0.74 percent. It is one of only seven New Jersey hospitals that have received bonuses in all three years of the program and one of three hospitals -- along with Cape May Regional Medical Center and Inspira Medical Center Elmer -- to receive more in Value-Based Purchasing bonuses than it lost in readmissions penalties.

Deborah President and CEO Joseph P. Chirichella said his hospital has been focused on the factors that affect the payments for several years.

Chirichella said the incentives have the potential to positively influence the care that patients receive. However, he said that hospitals have limited control over some of the factors that influence the program’s formula, such as spending efficiency -- which includes data from all of the providers that a patient visits in a given year.

“I would hope that statewide and nationwide, the average achievement has been creeping up,” as a result of the focus on quality, Chirichella said.

The hospitals that received the largest bonuses come from a wide variety of areas, including those that serve large urban, suburban and rural populations.

Here is the list of the 12 hospitals receiving the largest Hospital Value-Based Purchasing bonuses (Because of ties, there are only seven slots on the list.):

1. Deborah Heart and Lung Center, Browns Mills: 0.74 percent.

2. HackensackUMC Mountainside, Montclair: 0.49 percent

3. Virtual West Jersey Hospitals Berlin: 0.32 percent

4. Chilton Medical Center, Pompton Plains: 0.27 percent

5. CentraState Medical Center, Freehold: 0.26 percent; East Orange General Hospital: 0.26 percent; Valley Hospital, Ridgewood: 0.26 percent

6. Hackettstown Regional Medical Center: 0.22 percent; Kennedy University Hospital, Stratford: 0.22 percent

7. Inspira Medical Center, Elmer: 0.18; percent; Jersey City Medical Center: 0.18 percent; St. Luke's Warren Hospital: 0.18 percent

The data was drawn from the Centers for Medicare and Medicaid Services. A hospital-by-hospital summary, along with information about readmissions and hospital-acquired-condition penalties, is available from Kaiser Health News.

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