The Centers for Medicare and Medicaid Services has issued a final rule to establish the Hospital Value-Based Purchasing program that will tie acute care Medicare payments to quality of care beginning in fiscal year 2013.

CMS estimates that $850 million in Medicare payments to hospitals during FY 2013 will be based on meeting a set of quality measures. The size of the value-based payments fund will increase over time as Medicare shifts from payment based on the quantity of services provided to performance-based payments.

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