The Centers for Medicare and Medicaid Services (CMS) recently issued final rules for its value-based purchasing program for hospitals. Beginning in fiscal year 2013, which starts on Oct. 1, 2012, CMS will offer hospitals an incentive payment for achievement or improvement in 13 key measures.
Under the final rules, “Hospitals will lose part of their annual increase but get the chance to earn it back.” The incentive payments will be funded by a 1 percent decrease in base operating DRG payments, starting in fiscal year 2013, and then increase to 2 percent in fiscal year 2017.
The program’s 13 measures are divided between clinical process of care, weighted at 70 percent of the payment, and patient experience of care, weighted at 30 percent. Clinical process of care covers 12 performance measures focused on:
- Acute myocardial infarction
- Heart failure
- Pneumonia
- Healthcare-associated infections and
- Surgical care
Patient experience of care focuses on a Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) score, which is based on eight different components. Some hospitals are concerned that HCAHPS measures have too much weight. “People say there is a lot of variability in HCAHPS scores,” and “Urban hospitals are also concerned about the huge diversity among urban populations.”
The hospital will be scored on both its achievement and improvement during a performance period. To determine each hospital’s incentive payment, CMS will calculate its total performance for each measure during a baseline period from July 1, 2009 to March 31, 2010. Those measures will then be compared to a performance period lasting from July 1, 2011 through March 31, 2012. Scores are combined within each domain and each measure will be given equal weight.
To address these changes, hospitals can examine their performance right now. The measures are included in CMS’ core measures, which have been available since 2007. “Private companies have tools to manage this information,” and “there are a number of programs that would be good for hospitals to target, such as pneumonia.”
It was noted that, “value-based purchasing is not simply for hospitals.” Congress is considering legislation that would extend VBP to ambulatory surgery centers. In the future, home health agencies, physician offices and other parts of hospital-owned networks of services may also be added. As a result, many believe that these other groups should start researching the measures.
Additionally, the article noted that Accountable Care Organizations (ACOs), which will be measured on 65 quality measures, will have similar measures to VBP, such as patient experience of care, but others are quite different, such as care coordination and preventive health. CMS’ bundled payment pilots also measure quality, but over episodes of care.
The article also noted that, “private payors are starting VBP-like systems. For example, WellPoint recently announced it will begin tying hospital reimbursement increases to quality measurements through its Blue Cross Blue Shield plans in 14 states. Terms of the program will be introduced in the company’s next contract negotiations with each provider. WellPoint’s weighting percentages are different from the Medicare program.”
WellPoint plans to weight 55 percent of the payment on health outcomes, 35 percent on meeting patient safety measures and 10 percent patient satisfaction. The incentive for the hospital will be to get an increase in reimbursement every year, which in the past has amounted to 8 percent a year.
American Hospital Association Response
The American Hospital Association (AHA) submitted comments to CMS in regard to the value-based purchasing component of the proposed 2012 hospital outpatient prospective payment system, saying “CMS has not met its requirements with respect to certain measures. This failure will unfairly and adversely impact the hospital field and even undermine the intent of the law,” according to an AHA News Now report.
In a letter to CMS Administrator Donald Berwick, MD, the AHA contends that CMS’ inpatient VBP rule fails to meet requirements outlined by the Patient Protection and Affordable Care Act (PPACA) and “is exacerbated in the outpatient PPS rulemaking cycle because it builds on policies that fail to comply with the law’s requirements.”
Specifically, the AHA argues that a number of measures — including new Inpatient Quality Reporting measures included in VBP, hospital-acquired condition measures and AHRQ composite measures — were not made publicly available on Hospital Compare one year prior to the beginning of the performance period for the measure (as required by the PPACA) and therefore including them in the 2012 VBP program does not meet the law’s requirements. As such, the AHA argues that these measures cannot be included in the 2012 VBP.
Additionally, the AHA takes issue with CMS’ alleged failure to provide a specification document outlining how CMS arrived at the efficiency measure (Medicare spending per beneficiary) included in the VBP. According to the AHA, the specifications have not been made available one year in advance on Hospital Compare as required, and further, CMS has not taken the appropriate steps outlined in the PPACA to include measures not endorsed by the National Quality Forum.
In regards, to the outpatient VBP program, the AHA argues that because certain measures have still yet to be posted on Hospital Compare, the effective date of the VBP program needs to be pushed back in order to meet the one-year requirement. It also restated its opposition to including HAC measures in the VBP program because hospitals may be punished twice for higher-than-average HAC rates and urged CMS to reconsider weighting for its FY 2014 VBP measures.