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lower on quality measures than hospitals serving lower proportions of Medicaid patients.25  Because Medicaid is a joint federal-state program, states are responsible for directing quality improvement programs for their own Medicaid programs with some federal support.  States may launch demonstrations or pilot initiatives or use payment policies such as pay for performance (P4P) as contracting requirements for participation in a public program to implement these initiatives.26 CMS and Medicaid programs have begun to address these issues:

Hospital Quality and Safety. Hospital P4P initiatives in Medicaid are still rare but interest is growing, with Arkansas, Pennsylvania and Massachusetts having the only such initiatives in place to date.27 Since CMS announced that Medicare would no longer pay for 28 “never events”28, the Pennsylvania, Michigan, and Wisconsin Medicaid programs have also adopted this payment practice, other states are in the process of implementation, and some Medicaid health plans are following suit.29

Promoting Patient Safety Beyond Medicaid. States have undertaken a variety of other strategies to protect the public’s health and safety that may directly or indirectly involve the Medicaid program.  These include: launching patient safety reporting systems, creating patient safety centers, making patient safety part of facility licensure requirements, joining purchaser groups devoted to patient safety, and providing patient safety educational materials to consumers and providers.30  Some states also choose to publicly release data to improve accountability by informing consumers and payers about the quality of health care facilities.  As of early 2008, 37 states and the District of Columbia had implemented legislation or regulations that require hospitals or other facilities to report to a state agency on medical errors or adverse events, or require reporting of judgments or settlements related to physician malpractice.31  Eight states have a legislative mandate to publicly report data on measures of patient safety.

Pay-for-Performance (P4P). By 2009, 37 states are expected to have adopted a P4P initiative in managed care. Many states have also adopted P4P in their PCCM programs.  Yet, most P4P incentives are considered “weak signals” compared to the underlying payment system on which they are layered.32  In the absence of broader payment reform, which may be beyond the scope of Medicaid programs, P4P is

25 Goldman, L.E., E. Vittinghoff, and R.A. Dudley, “Quality of Care in Hospitals with a High Percent of Medicaid Patients,” Medical Care 45(6): 579-583.

26 Hess, C. et al. 2008.

27 Center for Health Care Strategies. Descriptions of Selected Performance Incentive Programs, November 2005. http://www.cms.CMS.gov/MedicaidSCHIPQualPrac/Downloads/spic0206.pdf; accessed April 9, 2008.

28 National Quality Forum. www.qualityforum.org. Accessed September 22, 2008.

29 “Medicaid will not cover errors in Pa,” Philadelphia Inquirer, p. C1, January 23, 2008.

30 National Academy for State Health Policy. 2008. States’ Roles in Addressing Patient Safety. www.nashp.org. Accessed September 15, 2008.

31 Kaiser State Health Facts. www.statehealthfacts.org.

32 O’Kane, P. “P4P: Part of a Larger Health Reform Agenda,” presentation to the Third National P4P Summit, Los Angeles, February 28, 2008.

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