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