Transitioning to a pay-for-performance, health care quality model of care

Delivery System Reform Incentive Payment (DSRIP)


A Delivery System Reform Incentive Payment (DSRIP) program, which may be required by the Centers for Medicare and Medicaid Services (CMS) as an alternative to supplemental payment programs (e.g., upper payment limits, charity care), is a federally-sponsored pay-for-performance initiative with the “Triple Aims” of better care for individuals (including access to care, quality of care, health outcomes), better health for the population and lower cost through improvement and innovation. The DSRIP program transitions supplemental funding to a model rewards-based payment structure contingent on achieving health improvement goals. DSRIP program payments may ultimately replace all traditional supplemental payment programs used in most State Medicaid programs.

Hospitals designated as DSRIP participating hospitals receive funding from both federal and local sources for the development of projects that support the Triple Aims. Projects funded with DSRIP funding include those activities that are directly responsive to the needs and characteristics of the populations and communities served by each hospital.

Participating hospitals develop a hospital-specific DSRIP plan (HDP), consistent with the state’s DSRIP planning protocols, that is rooted in the intensive learning and sharing that will accelerate meaningful improvement. Each HDP is consistent with the hospital’s mission and quality goals, as well as CMS’ goals improving health care through improved quality and efficiency. In its HDP, each hospital will select a pre-defined project and a menu of measurable, structured and progressive set of activities.

Hospitals may qualify to receive incentive payments for fully meeting performance metrics (as specified in the HDP), which represent measurable, incremental steps toward the completion of project activities, or demonstration of their impact on health system performance or quality of care.

In addition to planning protocols, funding and mechanics protocols are also required and subject to CMS review and approval.

Clinical protocols or projects may be completed by participating hospitals that are designed under Core Achievement Themes (CAT) that are specific to a state’s objectives, which may include but are not limited to the following:

  • Improved Care/Case Management
  • Improved Discharge Planning
  • Expansion of Primary Care
  • Improved Quality of Care
  • Improved Access to Care
  • Improved Patient Education
  • Improved Delivery of Care
  • Improved Training and Efficiency

States select focus areas toward which projects are developed. These focus areas could include some of the following: behavioral health, HIV/AIDS, chemical addiction/substance abuse, cardiac care, asthma, diabetes, obesity, pneumonia and other medical conditions unique to a particular hospital.


  • Aggressive timelines for program development and submission to CMS for approval.
  • Weighing an equitable distribution of funding.
  • Possible difficulty reaching a consensus among hospital groups on the funding model (losers vs. winners).
  • Likely will require the development of a significant number of project specific activities and metrics.
  • CMS requires specific details of what the hospitals will be required to submit in order to qualify for process metrics.
  • Creating incentives (and minimizing disincentives) for participating hospital.
  • Developing value-based quality improvement projects that are reflective of the community.
  • Minimizing administrative burden to a state and on the hospital industry.

Myers and Stauffer is one of a small number of firms nationally that has the experience and expertise available to our state Medicaid clients. We have developed a library of project reference materials and project management tools that will enable us to quickly initiate a state-specific work plan. We are knowledgeable of DSRIP best practices and have worked closely with CMS on the design of a DSRIP model. We are available to participate in a no-obligation meeting to discuss how we might assist you with a DSRIP initiative.


Beverly Kelly, CPA/CFF, CFE


9265 Counselors Row
Suite 100
Indianapolis, IN 46240

PH 317.846.9521
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