Trial run will help hos­pi­tals the real test, which starts Oct.1

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The start of the CMS’ val­ue­based pur­chas­ing pro­gram is ap­proach­ing fast, and anx­ious hos­pi­tals got a wel­come glimpse of whether they’ll get paid more or less when the fed­eral gov­ern­ment be­gins ty­ing hospi­tal in­cen­tive pay­ments to per­for­mance on se­lected qual­ity mea­sures.

Much is at stake both for fis­cal 2013 and fu­ture years when the gov­ern­ment will be rolling out ad­di­tions to the pro­gram.

The hospi­tal value-based pur­chas­ing pro­gram is bud­get-neu­tral, so there will be win­ners and losers. In­cen­tive pay­ments for the first year of the pro­gram, es­ti­mated at $850 mil­lion, will come from an across-the-board 1% cut in base op­er­at­ing DRG pay­ments, in­creas­ing in­cre­men­tally to 2% by 2017.

El­i­gi­ble hos­pi­tals whose to­tal per­for­mance is above the na­tional me­dian will see their pay­ments go up, while those who are on the bot­tom half will see a loss.

“Com­pe­ti­tion is so high that even if you are above the 90th per­centile, you could still have a very poor score and leave money on the ta­ble,” said Tami Lewis, di­rec­tor of ser­vice ex­cel­lence at 141-bed Robin­son Me­mo­rial Hospi­tal, Ravenna, Ohio. “How do you con­vey a mes­sage like that to em­ploy­ees?”

On Feb. 29, the CMS re­leased on the Qual­i­tynet web­site, qual­i­, sim­u­lated value-based pur­chas­ing re­ports for all hos­pi­tals, in­clud­ing those that would be in­el­i­gi­ble for the pro­gram. The CMS says these re­ports, which are not avail­able to the public, are meant to ed­u­cate hos­pi­tals about value-based pur­chas­ing be­fore it ac­tu­ally be­gins. A day ear­lier, the CMS hosted a 90-minute provider call dur­ing which of­fi­cials re­viewed por­tions of a sam­ple dry-run re­port, the scor­ing method­ol­ogy and key dates for this year.

Di­vided into seven sec­tions, the dry-run re­ports pro­vide a gen­eral over­view of the pro­gram as well as hospi­tal-spe­cific data for the 12 clin­i­cal process-of-care mea­sures and eight “di­men­sions” of pa­tient ex­pe­ri­ence that will be used to cal­cu­late 2013’s in­cen­tive pay­ments, of­fi­cials said dur­ing the call. The re­port also in­cludes the hospi­tal’s es­ti­mated in­cen­tive pay­ment per­cent­age. An ex­am­ple pro­vided by the CMS showed a hospi­tal with an es­ti­mated net change in base op­er­at­ing DRG pay­ment of 0.119%, putting it in the top half of hos­pi­tals in the na­tion.

Im­por­tantly, the CMS said, the dry-run re­ports are based on a dif­fer­ent time pe­riod than the ac­tual pro­gram. The value-based pur­chas­ing pro­gram for 2013 uses a base­line pe­riod from July 1, 2009, through March 31, 2010, and a per­for­mance pe­riod that runs from July 1, 2011, through March 31, 2012. The base­line pe­riod for the sim­u­lated re­ports, on the other hand, is April 1, 2008, through Dec. 31, 2008, and the per­for­mance pe­riod is April 1, 2010, through Dec. 31, 2010.

“The re­port does not in­di­cate how your hospi­tal will ac­tu­ally per­form in fis­cal year 2013, or whether your hospi­tal will be el­i­gi­ble for the fis­cal year 2013 value-based pur­chas­ing pro­gram,” the CMS said dur­ing the call.

Still, the sam­ple re­port is an­other tool

hos­pi­tals can use as they try to pre­pare, said Re­becca Thur­man, di­rec­tor of qual­ity as­sur­ance and risk man­age­ment for Cof­fey Health Sys­tem, Burling­ton, Kan., which in­cludes 36bed Cof­fey County Hospi­tal. Thur­man was on the Feb. 28 provider call, and she down­loaded her hospi­tal’s sim­u­lated re­port as soon as it be­came avail­able.

“To be frank, it’s bet­ter than I had ex­pected,” Thur­man said in an in­ter­view as she skimmed the 27-page doc­u­ment, which she said fea­tured graphs, charts and other il­lus­tra­tions.

Although she de­clined to of­fer spe­cific de­tails about the con­tent of the re­port, Thur­man did say Cof­fey County Hospi­tal had scored high on the process-of-care mea­sures and higher than she had an­tic­i­pated on the over­all Hospi­tal Con­sumer As­sess­ment of Health­care Providers and Sys­tems mea­sure, an area she pre­dicted many hos­pi­tals would strug­gle with. “As it stands, it looks like we prob­a­bly won’t be in the neg­a­tive when the pro­gram starts,” Thur­man said, re­fer­ring to the in­cen­tive pay­ment ad­just­ment. “It’s some­thing we’ll have to work on over time.”

The CMS will base in­cen­tive pay­ment ad­just­ments on hos­pi­tals’ scores for each mea­sure, tak­ing into ac­count both achieve­ment and im­prove­ment. Hos­pi­tals earn achieve­ment points based on how well they do on each mea­sure dur­ing the per­for­mance pe­riod, com­pared with how all hos­pi­tals per­formed dur­ing the base­line pe­riod. Im­prove­ment points are de­ter­mined by each hospi­tal’s progress from its own base­line rate.

For in­stance, in an ex­am­ple given dur­ing the provider call, a hospi­tal’s base­line rate on one of the clin­i­cal process-of-care mea­sures—ini­tial an­tibi­otic se­lec­tion for com­mu­nity-ac­quired pneu­mo­nia in an im­muno-com­pe­tent pa­tient—is 0.9702. Dur­ing the per­for­mance pe­riod, the hospi­tal im­proved that rate to 0.9844, earn­ing 7 out of 9 pos­si­ble im­prove­ment points.

But be­cause that hospi­tal’s per­for­mance rate is well above the mea­sure’s thresh­old of 0.9057 and only slightly be­low the bench­mark of 0.9887, the hospi­tal will also re­ceive 9 out of 10 pos­si­ble achieve­ment points. The CMS uses the higher of the two scores—im­prove­ment or achieve­ment—so for that mea­sure, the hospi­tal would re­ceive 9 points. Con­fused? You’re not alone. “There’s so much to learn and any­thing they can do to help us is valu­able,” said Lewis, of Robin­son Me­mo­rial Hospi­tal, who also was on the provider call. “I wish they would do these calls on a quar­terly ba­sis.”

The HCAHPS fac­tor

Like many hos­pi­tals, Robin­son Me­mo­rial is es­pe­cially wor­ried about the over­all mea­sure of pa­tient sat­is­fac­tion, de­ter­mined by per­for­mance on eight HCAHPS di­men­sions, in­clud­ing com­mu­ni­ca­tion with nurses and pain man­age­ment. Lewis said that while she rec­og­nizes the need to take the ex­pe­ri­ences of pa­tients into ac­count, she also is con­cerned about bas­ing re­im­burse­ment on qual­i­ta­tive mea­sures that are based largely on per­cep­tion.

Fur­ther com­pli­cat­ing things, hos­pi­tals say, is the CMS’ use of con­sis­tency points for HCAHPS. Each of the eight di­men­sions of pa­tient ex­pe­ri­ence is scored in the same way as the clin­i­cal process-of-care mea­sures, us­ing both im­prove­ment and achieve­ment points. But the agency also awards each hospi­tal be­tween zero and 20 con­sis­tency points, based on each hospi­tal’s low­est di­men­sion score.

In other words, a hospi­tal could re­ceive all 20 con­sis­tency points if its per­for­mance on each of the eight di­men­sions is greater than the na­tional achieve­ment thresh­old. But con­versely, a hospi­tal can re­ceive zero con­sis­tency points if its score on one or more of the di­men­sions is lower than the low­est per­form­ing hospi­tal’s score on that di­men­sion dur­ing the base­line pe­riod.

And it’s that part of the CMS’ scor­ing method­ol­ogy that could re­ally cause prob­lems, hos­pi­tals say. “I’m hav­ing a hard time even un­der­stand­ing how they came up with it,” said Peggy Jar­rett, di­rec­tor of com­mu­nity out­reach at 70-bed Platte Val­ley Med­i­cal Cen­ter, Brighton, Colo.

Nancy Foster, the Amer­i­can Hospi­tal As­so­ci­a­tion’s vice pres­i­dent for qual­ity and pa­tient-safety pol­icy, expressed sim­i­lar frus­tra­tion with the con­sis­tency frame­work. “It’s a very odd con­struc­tion that in­tu­itively does not make sense to hos­pi­tals and is in­con­sis­tent with the way they have con­structed any other part of the pro­gram,” Foster said. “We would be happy if it went away.”

In spite of the con­cern about the HCAHPS mea­sure and other fea­tures of the pro­gram, hospi­tal of­fi­cials said the dry-run re­ports were a use­ful re­source. Richard Ketcham, pres­i­dent and CEO of 177-bed St. El­iz­a­beth Med­i­cal Cen­ter, Utica, N.Y., said he came to the Feb. 28 provider call seek­ing clar­i­fi­ca­tion, and he felt like he got it.

“Both the call and the re­port were very help­ful,” Ketcham said. “They def­i­nitely added to my knowl­edge of how the HCAHPS sys­tem will work, and my un­der­stand­ing of the con­sis­tency points and the im­por­tance of the low­est-scor­ing in­di­ca­tor. It re­in­forced the need to re­ally pay at­ten­tion.”

The dry run is also im­por­tant, said Lisa Grabert, the AHA’S se­nior as­so­ci­ate di­rec­tor for pol­icy, be­cause many hos­pi­tals have al­ready been us­ing a value-based cal­cu­la­tor or re­port gen­er­a­tor from a pri­vate source like a ven­dor or pro­fes­sional as­so­ci­a­tion, such as the one de­vel­oped by the AHA.

But most of those sources project an over­all gain or loss in a lump sum, rather than the per­cent­age change per DRG that is in­cluded in the sam­ple re­ports from the CMS, Grabert said. “That’s a dif­fer­ent way of think­ing about it and it’s good for our mem­bers to see that ahead of time.”


Medi­care’s val­ue­based pur­chas­ing pro­gram will pick win­ners and losers in dis­tribut­ing in­cen­tive pay­ments for cer­tain qual­ity mea­sures, in­clud­ing sev­eral in­volv­ing sur­gi­cal care.

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