Two key high-ranking members of the U.S. Senate, Sens. Max Baucus (D-Mont.) and Charles Grassley (D-Iowa), have proposed that Medicare Part A payments for myocardial infarction and other conditions be linked to hospital performance on a variety of quality measures. In addition to myocardial infarction, the proposal would apply to heart failure, pneumonia and surgical care, and the measures would be based on guidelines issued by organizations such as the National Quality Forum. The program, which will gradually be phased in over four years beginning in 2012, would also measure overall patient satisfaction of hospital care. Each hospital would have a different value-based incentive payment percentage, calculated by multiplying the hospital's current DRG and performance score. The proposal is a continuation of the Medicare hospital pay-for-reporting program started in 2003 that increased reimbursement to hospitals that reported on compliance with identified quality measures. The new proposal focuses not just on reporting, but on how well the hospitals actually perform on these quality measures. Currently, the Centers for Medicare & Medicaid Services (CMS) is running a demonstration project to test the pay-for-performance principles in Medicare Part B. You can read the draft legislation here.