Centers for Medicare & Medicaid Services Update Hospital Value Based Purchasing

Centers for Medicare & Medicaid Services UpdateHospital Value Based Purchasing

Howard Shaps, MD, MBAMedical DirectorHealth Care ExcelAugust 7, 2013

Hospital Value Based Purchasing

Howard Shaps, MD MBA

Agenda• History

• Background

• Measures

• Past Present Future

• Conclusions and Questions

Core Measure

• An evidenced-based performance measure • The basic core measure principles

• Every patient with the given diagnosis….• Will receive the baseline (core) care • Scientific research

• Diagnosis• High volume• High cost • Increased rate of morbidity or mortality

Quality Measures• Evidence based

• Measure or quantify • Healthcare processes• Outcomes• Patient perceptions• Organizational structure and/or systems

Goal: Provide care that is…..

Effective Patient CenteredSafe EquitableEfficient Timely

Hospital Quality Initiative• 2003

• Goals and Objectives• National public reporting activities – Quality Measures

• Private and public purchasers of healthcare• Oversight and accrediting entities • Providers of hospital care

• Empower consumers• To make more informed decisions about their healthcare

• Encourage providers and clinicians • To improve the quality of healthcare

Hospital Compare• 2005• A Website developed to publicly report information:

• Valid • Credible• User-friendly

• 4,000 Medicare-certified Hospitals• Displays quality information

• Can help make decisions about where patients obtain health care• Encourages hospitals to improve the quality of care they provide

http://www.medicare.gov/hospitalcompare7

Hospital Quality Initiative: Data Sets

Clinical Data • Centers for Medicare & Medicaid Services (CMS) aligned with the National Quality

Forum (NQF)

• Evidence-based hospital quality measures

• Research and evidenced-based medicine affects:• Mortality and morbidity• Disability• Length of stay• Readmissions

Hospital Quality Initiative: Data Sets

Patient Perspectives

• CMS worked with the Agency for Healthcare Research and Quality (AHRQ) • Hospital-Consumer Assessment of Healthcare Provider and Systems (HCAHPS) survey

Inpatient Quality Reporting (IQR) Program

• Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003

• Section 5001(a) of Pub. 109-171 of the Deficit Reduction Act (DRA) of 2005 • Requirements for the Hospital IQR program• Built on the Hospital Quality Initiative

• This section of the MMA authorized CMS to…• Pay hospitals that successfully report designated quality measures a higher annual update

to their payment rates as part of the Inpatient Prospective Payment System (IPPS)

Inpatient Quality Reporting (IQR) Program

• Requires "sub-section (d)" hospitals to submit data for specific quality measures for health conditions common among people with Medicare

• Quality Measure Data found on Hospital Compare

• Targets consumers

• Encourage hospitals and clinicians• Improve the quality of inpatient care

• 2.0 percentage point reduction • If do not participate 12

CMS Payment Reduction Programs• Hospital Value Based Purchasing

• Hospital Readmission Reduction Program• Higher than expected readmission rates

• Lower payments

• Payment Adjustment for Hospital Acquired Conditions• Bottom quartile affected

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Hospital Value Based Purchasing 1.00% 1.25% 1.50% 1.75% 2.00%

Hospital Readmission Reduction Program 1.00% 2.00% 3.00% ? ?

Hospital Acquired Conditions Adjustment 1.00% ? ?

Hospital Value-Based Purchasing Program • Hospital Inpatient Quality Reporting Program

• Authorized by Section 501(b) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003

• Affordable Care Act• Congress authorized the Hospital inpatient Value-Based Purchasing (VBP) program in Section

3001(a)

• Next step in promoting higher quality care for Medicare• Pays for care that rewards better value and patient outcome

• Instead of just volume of services

• Measures specified under the Hospital IQR Program• Results published on Hospital Compare for at least one year 19

Intentions• Promote better clinical outcomes for hospital patients• Improve patient’s experience of care during hospital stays

• Encourage hospitals to improve the quality and safety of care • Eliminating or reducing the occurrence of adverse events • Adopting evidence-based care standards and protocols• Re-engineering hospital processes

• Improve patients’ experience of care• Improve clinical outcomes

Concepts• Buyers should hold providers of health care accountable for both cost and quality of

• Value-based purchasing brings together• Information on the quality of health care

• Patient outcomes• Health status

• Data on the dollar outlays going towards health

• Managing the use of the health care system• Reduce inappropriate care• Identify and reward the best performing providers 21

End Point• CMS is changing the way it pays hospitals

• Rewarding hospitals for the quality of care they provide to Medicare patients, not just the quantity of procedures they perform

• Hospitals are rewarded • How closely they follow best clinical practices – core or quality measures• How well hospitals enhance patients’ experiences of care• Patient outcomes

• When hospitals follow proven best practices, patients receive higher quality care and see better outcomes

Eligibility• How is “hospital” defined for this program?

• The Hospital VBP Program applies to subsection (d) hospitals: • Statutory definition of subsection (d) hospital found in Section 1886(d)(1)(B) of the Social

Security Act

• Hospitals in all 50 states, the District of Columbia• Acute Care Hospitals• Including Maryland

• More than 3,000 hospitals across the country are eligible to participate

Who is Excluded?• Exclusions Under Section 1886(o)(1)(C)(ii):

• Payment reductions under Hospital IQR Program• Excluded from the Inpatient Prospective Payment System (IPPS) • Deficiencies during the Performance Period that pose immediate jeopardy to the health or

safety of patients • Without the minimum number of cases, measures, or surveys in the performance period • Exemption from the Secretary of the Department of Health and Human Services (HHS)

• Maryland received a waiver for the FY 2013 Program Year

Hospitals excluded from the Hospital VBP Program will not be subject to the base operating DRG reduction for the applicable fiscal year

Funding• Via regular fees Medicare pays hospitals through its Diagnosis-Related Group (DRG)

system

• DRG payments for each patient discharge across all hospitals reduced each year• Money will be used to fund incentive payments

• Roughly half of participating hospitals will receive a net increase in payments • The rest will receive a net decrease in payments

• Possible increases depend on the distribution of hospitals’ performance scores

Budget Neutral27

Base Operating DRG Percent Reduction

FY 2013 FY 2014 FY 2015 FY 2016 FY 20170

So……

Where are we?

Where are we going?

Key TermsDomainsMeasuresTime PeriodsPointsFloorsThresholdsBenchmarksPercentagesAchievementPerformance

Total Performance Score

Fiscal Year 2013

Clinical Process of Care

Patient Experienceof Care

Fiscal Year 2014

Outcome

Clinical Process of Care

Patient Experience of Care

Fiscal Year 2015

Patient Experience of Care

Outcomes

Efficiency

Clinical Processof Care

Baseline Performance Data

Baseline: April 1, 2010 to December 31, 2010

Fiscal Year 2014

Baseline and Performance Periods

Clinical Process of Care and Patient Experience of Care

Outcome

Baseline: July 1, 2009 to June 30, 2010

Baseline: July 1, 2011 to June 30, 2012

Performance: April 1, 2012 to December 31, 2012

Achievement Points

• Achievement Points are awarded by comparing an INDIVIDUAL hospital’s rates during the Performance Period with ALL hospitals’ rates from the Baseline Period

• How are Achievement Points awarded? • Hospital rate at or above the Benchmark: 10 Achievement Points • Hospital rate less than the Achievement Threshold: 0 Achievement Points • If the rate is equal to or greater than the Achievement Threshold and less than the

Benchmark: 1-9 Achievement Points

Improvement Points• Improvement Points are awarded by comparing one hospital’s rates during the

Performance Period to that same hospital’s rates from the Baseline Period • How are Improvement Points awarded?

• Hospital rate at or above the Benchmark: 9 Improvement Points • Hospital rate less than or equal to Baseline Period Rate: 0 Improvement Points • If the hospital’s rate is between the Baseline Period Rate and the Benchmark: 0-9

Improvement Points

Eligible to earn between 0 to 20 possible points

Based on the hospital’s lowest dimension score in Performance PeriodRelative to the lowest performing hospital on this dimension (floor)

Consistency Points:How My Hospital Compares to the Floor

How are Hospitals Measured?• Points for Achievement and Improvement for each measure or dimension

• Greater number used

• Points are added across all measures to reach the Clinical Process of Care and Outcome domain scores

• Points are added across all dimensions and are added to the Consistency Points to reach the Patient Experience of Care domain score

• Fiscal Year 2014• 45% of Total Performance Score based on Clinical Process of Care measures • 25% of Total Performance Score based on Outcome measures• 30% of Total Performance Score based on Patient Experience of Care dimensions

Total Performance Score 41

Normalized• Occurs when the total number of cases for a measure was not met

• Total Performance Score is adjusted to account for missing measures

CMS will normalize a domain score by converting the hospital’s points earned to a percentage of possible points

Who is eligible in FY 2014?• Clinical Process of Care domain score

• If they have at least 10 cases for each of at least 4 applicable measures during the Performance Period

• Patient Experience of Care domain score• At least 100 completed Hospital Consumer Assessment Healthcare Providers and System

(HCAHPS) surveys during the Performance Period

• Outcome domain score• Need 10 cases in two of three measures to be scored

For FY 2014 providers must have had a score for all three domains to be eligible 43

Reports and Calculations

Consistency Points Apply Here

Value Based Multiplier Calculation

• Base operating DRG = $1,000,000

• Fiscal Year 2013 Base Operating DRG Payment Amount Reduction = $10,000

• Linear Exchange Function = 2.0

Now Pretend….

The Total Performance Score is 41

What happens?

Calculate the Hospital Value Based Incentive Payment Percentage

0.01 x 41/100 x 2.0 = .0082 or 0.82%

This number is less than 1.00%

Calculate the hospital’s net percentage change in base operating DRG payment for each discharge……

0.0082% - 1.00% = - 0.18%

With this Total Performance Score……

-0.18 x 1,000,000 = -$1,80063

The hospital’s Value Based Multiplier….

1.00 + -0.18/100 = 0.9982

And each DRG payment will be multiplied against 0.9982 and thus

The hospital loses money

Future…….

(Kind of)

Medicare Spending Per Beneficiary (MSPB)

• Assesses Medicare Part A and Part B payments • From three days prior to an inpatient hospital admission through 30 days after discharge• Price standardized and risk adjusted

• Numerator• Hospital’s average MSPB Amount

• Defined as the sum of standardized, risk-adjusted spending across all of a hospital’s eligible episodes divided by the number of episodes for that hospital

• Denominator• The median MSPB Amount across all hospitals

• CMS hopes to • Increase the transparency of care for consumers• Recognize hospitals that are involved in the provision of high-quality care at lower 70

Future?• Acute Care Hospitals

• Methicillin resistant Staphylococcus aureus• Clostridium difficile• Adverse Drug Events• Imaging measures• Joint Replacement Surgeries• Electronic Health Records

• Non Acute Care Hospitals• Long-Term Care Hospitals• Critical Access Hospitals• Inpatient Rehabilitation Facilities

• Nursing homes

• Physician Practices

Quality Improvement Organizations (QIOs)

• Intimate knowledge of CMS activities

• Assist providers• Inpatient Quality Reporting• Outpatient Quality Reporting• Hospital-Consumer Assessment of Healthcare Systems and Providers

• Educational Resources• Evidenced-Based

• Assist with Quality Improvement endeavors 73

Contact Information

Howard Shaps, MD, MBAMedical DirectorHealth Care Excel1941 Bishop Lane, Suite 400Louisville, Kentucky 40218hshaps@hce.org502.454.5112 x 2202

This material was prepared by Health Care Excel, the Medicare Quality Improvement Organization for Kentucky, under contract with the Centers for Medicare & Medicaid Services (CMS), an agency of the U.S. Department of Health and Human Services. The contents presented do not necessarily reflect CMS policy. Created on July 31 2013. 10SOW-KY-INDPAT-13-024

Centers for Medicare & Medicaid Services Update Hospital Value Based Purchasing

quality of care

quality of healthcare

quality of inpatient

based medicine

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designated quality measures

specific quality measures

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