P4P is a new value-based health care purchasing concept that, if permanently adopted by CMS and state agencies, will change the way nursing homes are reimbursed under Medicare and Medicaid, respectively. P4P has the potential to transform Medicare and Medicaid payment systems. At this time the industry is cautiously optimistic about this new concept.

P4P is based on the theory that offering monetary incentives for high quality care will modify the behavior of care providers. CMS plans to have a Medicare (Part A and B) P4P program in conjunction with each state having a state-specific Medicaid P4P payment system. CMS indicates intent to roll out its Medicare P4P demonstration program in 2008.

Four states ( Iowa, Kansas, Vermont and Ohio) have initiated Medicaid P4P demonstration programs, and the concept is reported to be taking hold in hospitals, physician offices and with private health plans. Each state agency will employ outcome measure criteria as determined to be needed to improve quality of care in the given State.

Iowa, since 2002, has been using P4P to reward its state’s high-quality-of-care providers. The Iowa state agency reports that 83% of the state’s nursing homes have received reimbursement rewards.

CovetCare automated medical record system is imbedded with proposed high quality care approaches and data integrity cross checking. Through its simple point and click process, CovetCare fosters thorough and high-level documentation that is consistent with each clinical discipline’s standards of professional practice, federal and state regulations and the RUG III reimbursement system. CovetCare staff are closely tracking P4P, for that time – if and when -- upgrades to the electronic medical record system are needed to explicitly lock down P4P documentation requirements and to cue users through message screens.

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