Benchmarking

Defining key terms:

  • Benchmark: a point of reference that serves as a basis for evaluation or from which a measurement may be made (Merriam-Webster)
     
  • Financial Benchmark (health care): an established price for health care services; also known as a “target price"
     
  • Quality Performance Benchmark (health care): an established standard of care provided to patients

Paying for Quality

The CMS Innovation Center often uses financial benchmarks and quality performance benchmarks to monitor the effectiveness of its models. Specifically, these benchmarks are used to determine whether models enhance or maintain quality of care while reducing (or not increasing) spending.

Benchmarking can support providers, practices and others participating in model tests by giving them measurable goals. By tying these goals to payments from CMS, participants are encouraged to provide the best care possible while managing unnecessary costs. This approach is often referred to as “paying for quality.” 

Further, benchmarking helps the CMS Innovation Center to identify high-performing model participants, determine what contributes to their success, communicate lessons-learned, and ultimately advance best practices. 

Financial Benchmarks in CMS Innovation Center Models

Within CMS Innovation Center models, financial benchmarks are used to calculate a price for health care services such as lab testing and diagnostic care, preventive care such as screenings, as well as therapies, treatments, and medical procedures. 

A number of CMS Innovation Center models use financial benchmarks to calculate a price for multiple services bundled together or the total cost of care – across doctors and treatments – during a particular health episode.

The CMS Innovation Center typically sets financial benchmarks for a model test based on 

  • How much CMS has historically paid for the related health care service(s)
  • How payments might change during the testing of the model 
  • The characteristics and health of the patients served by the model

In some CMS Innovation Center models, model participants, such as doctors and hospitals, use these benchmarks to measure whether they can improve quality of care while decreasing or not increasing costs. CMS may make additional payments to model participants who maintain or improve the quality of care while keeping costs below the benchmark by making improvements such as better care coordination.

Quality Performance Benchmarks in CMS Innovation Center Models

The CMS Innovation Center determines quality performance benchmarks by first identifying which factors will best define quality in the model. Some quality measures may relate to health outcomes, such as:

  • How well a treatment works for patients 
  • How frequently and how long patients stay in the hospital
  • How often visits are made to the emergency department

Other quality performance benchmarks may relate to things providers do during a patient visit, such as preventive screenings or how satisfied a patient is with their doctor’s care, as reported in surveys.  The CMS Innovation Center uses these benchmarks to gauge how health care providers are performing in a model and ensure they are delivering quality care.

Originally posted on: August 14, 2023  |  Reviewed and revised on: August 21, 2024

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