Hospital Value-Based Purchasing

The CMS Hospital Inpatient and Hospital Outpatient Quality Reporting Programs provide financial incentives to hospitals that provide higher levels of quality care to patients.

Inpatient Quality Reporting

The Hospital Inpatient Quality Reporting (IQR) program was developed as a result of the Medicare Prescription Drug, Improvement and Modernization Act of 2003. Section 5001(a) of Public Law 109-171 of the Deficit Reduction Act of 2005 provided new requirements for the Hospital IQR program, which built on the voluntary Hospital Quality Initiative.

The Hospital IQR program is intended to equip consumers with quality of care information to make more informed decisions about health care options. It is also intended to encourage hospitals and clinicians to improve the quality of inpatient care provided to patients. The hospital quality of care information gathered through the program is available to consumers on the Hospital Compare website.

Outpatient Quality Reporting

The Hospital Outpatient Quality Reporting (OQR) quality data reporting program was implemented by CMS for outpatient hospital services. Under this program, hospitals report data using standardized measures of care to receive the full annual update to their Outpatient Prospective Payment System (OPPS) payment rate.

The OQR program is modeled on the current quality data reporting program for inpatient services, the Hospital Inpatient Quality Reporting Program.

Summary of Hospital OQR Requirements
To meet hospital OQR requirements and receive the full Annual Payment Update (APU) under the OPPS, hospitals must meet administrative, data collection and submission, and data validation requirements. The current measure set for the Hospital OQR Program includes measures that assess processes of care, imaging efficiency patterns, care transitions, ED throughput efficiency, the use of health information technology, care coordination, patient safety and volume. Participating hospitals agree that they will allow CMS to publicly report data for the quality measures (as stated in the current OPPS Final Rule).

Hospitals that meet data reporting requirements during a given calendar year (CY) receive their full OPPS payment update for the upcoming CY; hospitals that do not participate or fail to meet these requirements may receive a two percent reduction of their payment update.

Imaging Efficiency Measures
For CY 2022 payment determinations, four Outpatient Imaging Efficiency (OIE) measures are publicly reported within the OQR program: OP-8, OP-10, OP-13, and OP-23. 

The measures listed below are calculated from hospital Medicare fee-for-service claims data paid under the OPPS. Hospitals need not submit any additional data for the six measures.

Measure #

Measures for CY 2022 Payment Determination
OP-8 MRI Lumbar Spine for Low Back Pain
OP-10 Abdomen CT — Use of Contrast Material
OP-13 Cardiac Imaging for Preoperative Risk Assessment for Noncardiac Low-Risk Surgery
OP-23  Head CT or MRI Scan Results for Acute Ischemic Stroke or Hemorrhagic Stroke who Received Head CT or MRI Scan Interpretation Within 45 minutes of ED Arrival

For more information on all Hospital OQR measures, visit the CMS QualityNet website.