The unintended consequences of The Centers for Medicare and Medicaid Services pay-for-performance structures on safety-net hospitals and the low-income, medically vulnerable population

Abstract

Safety-net hospitals are hospitals with patient mix that is substantially composed of the uninsured, underinsured, and low-income, medically vulnerable patient populations. They are the hospitals of last resort for poor patients. This article examined the impact of The Centers for Medicare and Medicaid Services pay-for-performance reimbursement policies on the financial viability of safety-net hospitals. Studies showed that these policies, which are based on the principle of reward and punishment, might have unintentionally placed safety-net hospitals on financial disadvantage compared to other hospital organizations. Several studies implied that these payment structures might have resulted in a situation where safety-net hospitals that are serving poor patient populations become more susceptible to penalties than hospitals that are serving affluent patients.

Keywords: hospital readmission; hospital-acquired infection; low-income; medically vulnerable population; pay-for-performance; safety-net hospital; value-based purchasing.