Finding value in proposed PPS regs
Annual Medicare payment reg focuses on quality
The CMS may have taken steps initially to ease providers into its valuebased purchasing program, but those days are over. In a 1,313-page proposed rule detailing payment policies for acute-care and longterm-care hospitals, released April 24, the agency included a slew of provisions related to quality improvement and patient safety.
The proposed rule, which would increase operating payments to acute-care hospitals by about 0.9% in 2013, includes changes to the CMS’ Inpatient Quality Reporting Program, new quality measures for long-term care, updates to the list of hospital-acquired condi- tions, and more details about the government’s Hospital Readmissions Reduction Program.
“It is part of a comprehensive strategy to use Medicare’s payment systems to foster better care and better value in all settings, thereby reducing overall Medicare spending,” CMS acting Administrator Marilyn Tavenner said of the rule, in a news release.
For its Inpatient Quality Reporting Program, the CMS proposed reducing the number of measures from the current set of 72 to 59 for fiscal 2015’s payment update. Under the Hospital IQR program, hospitals voluntarily submit quality data or receive a 2% reduction in their annual payment update. More than 99% of hospitals are now participating in the program, the CMS said.
The CMS also proposed lowering its annual random sample from 800 hospitals to 400 under the IQR, as previous data has shown high accuracy rates.
For its value-based purchasing program, the CMS proposed adding several new measures for 2015, including one clinical process-of-care measure: statin prescribed at discharge for heart attack patients. Additionally, that year’s program would include two new outcome measures, one of which targets central line-associated bloodstream infections and another composite patient-safety indicator from the Agency for Healthcare Research and Quality.
Finally, 2015’s value-based purchasing program would also mark the introduction of an efficiency measure that tracks Medicare spending per beneficiary. The proposed rule should allay some fears about the efficiency measure, said Nancy Foster, vice president of quality and patient-safety policy
for the American Hospital Association.
“They have taken care to craft a measure that recognizes that some hospitals have higher costs for case mixes they serve but also for accounts for policy-related adjustments like disproportionate share and indirect medical education,” Foster said. “They removed those from the comparisons, which is appropriate.”
Still, Foster said the measure won’t show why some areas have lower per-beneficiary spending than others and what providers can do to emulate high-performers.
“It’s hard to tell what’s going on and whether there are higher costs in some regions because patients don’t have ready access to primary care,” she added. “It is critically important to have this information out and available, and it’s the first time we are seeing this kind of thoughtful comparison. Now we need to understand what it means.”
The CMS also proposed adding care coordination and population health as new measurement domains for 2016’s program.
But the agency didn’t stop there. As mandated by the healthcare reform law, the CMS also proposed new quality reporting programs for cancer hospitals and inpatient psychiatric hospitals, and it proposed new requirements for the Ambulatory Surgery Center Quality Reporting Program.
Coding cuts also included in the proposed rule drew the ire of hospital groups. In a statement released April 25, Richard Umbdenstock, AHA president and CEO, said the cuts were based on “outdated data and a flawed methodology,” and would result in lower payments for hospitals.
Chip Kahn, president and CEO of the Federation of American Hospitals, also took issue with the cuts.
“They have a methodology that shows them that part of the growth in spending was due to coding, rather than to real case-mix growth and—consistently—the industry has had different findings,” Kahn said in an interview. “And also with the sequester looming, we think this was a terrible time to apply this reduction.”
Industry groups also expressed concern about provisions affecting long-term acutecare hospitals, including a proposed 3.75% cut in funding.
“Even with a three-year phase-in, this new reduction will have a negative effect on (longterm acute-care hospitals’) ability to care for patients,” Umbdenstock said in the statement. “Now is not the time to further reduce fund- To improve the quality of hospital care Medicare pays for, the CMS plans to: Measure Reward reductions in Add Survey patients about Implement
in value- based purchasing to inpatient quality reporting
in HCAHPS ing for critical hospital services.”
The Association of American Medical Colleges, meanwhile, criticized an adjustment to the way teaching hospitals would be paid under the prospective payment system. The change would include labor and delivery beds when calculating total bed counts for the indirect medical education adjustment, meaning hospitals would get paid less for the same number of residents, Lori Mihalich-levin, the AAMC’S director of hospital and graduate medical education payment polices, said in an interview.
“We don’t believe this is an appropriate policy decision,” Mihalich-levin said, adding that the CMS had predicted the proposed change would result in an overall decrease of $170 million in payments to teaching hospitals.