NYC pub­lic hos­pi­tals get into the pay-for-per­for­mance game

NY pub­lic sys­tem tries its own pay-for-per­for­mance

Modern Healthcare - - NEWS - Mau­reen Mckinney

The na­tion’s largest pub­lic hospi­tal sys­tem is rip­ping a page from the CMS’ playbook, link­ing in­cen­tive pay­ments to physi­cians’ per­for- mance on qual­ity in­di­ca­tors and, in the process, try­ing to shore up its abil­ity to cap­ture rev­enue un­der new fed­eral pro­grams.

The New York City Health and Hos­pi­tals Corp., a 14-hospi­tal safety net sys­tem, re­cently an­nounced the launch of a pay-for-per­for­mance pro­gram for its 3,500 af­fil­i­ated physi­cians that will award up to $59 mil­lion in bonus pay­ments over three years. Physi­cians will earn those in­cen­tives by reach­ing tar­gets on a num­ber of mea­sures, in­clud­ing 30-day read­mis­sion rates for heart fail­ure, av­er­age acute length of stay and ad­min­is­tra­tion of an­tibi­otics prior to surgery.

The pro­gram is sig­nif­i­cant not only be­cause of HHC’s size and pres­ence in the re­gion, but also be­cause it could mo­ti­vate other pub­lic hos­pi­tals and sys­tems to fol­low suit, ex­perts say.

“I think it’s a good model that will have im­pli­ca­tions for the whole mar­ket­place,” said Dr. Bruce Siegel, pres­i­dent and CEO of the Na­tional As­so­ci­a­tion of Pub­lic Hos­pi­tals and Health Sys­tems. “It’s a sign of things to come, and I ex­pect that now that one large sys­tem has taken the plunge, oth­ers will fol­low.”

It’s not the first time a hospi­tal has en­tered into an in­cen­tive pro­gram with physi­cians, Siegel said. But past agree­ments have usu­ally in­cluded one physi­cian group or a sin­gle de­part­ment, such as car­di­ol­ogy. “We’ve never seen any­thing this com­pre­hen­sive,” he said.

The ini­tia­tive has been in the works for more than a year, when ne­go­ti­a­tions be­gan with HHC’s three af­fil­i­ate physi­cian groups: the Physi­cian Af­fil­i­ate Group of New York, the Mount Si­nai School of Medicine and the NYU School of Medicine.

Past con­tracts with the groups al­ways in­cluded rou­tine cost-of-liv­ing in­creases, but

those pay hikes were ab­sent this time around. Alan Aviles, HHC’s pres­i­dent, ar­gued such au­to­matic in­creases are no longer fi­nan­cially fea­si­ble.

“If we pro­vide any ad­di­tional com­pen­sa­tion for physi­cians, it has to be de­rived by new rev­enues gen­er­ated or losses avoided,” he said.

HHC pat­terned its pay-for-per­for­mance pro­gram on the CMS’ value-based pur­chas­ing pro­gram and read­mis­sions re­duc­tion pro­gram, both of which launched in Oc­to­ber. For in­stance, HHC in­cluded mea­sures such as physi­cian-provider com­mu­ni­ca­tion and dis­charge in­struc­tions for heart-fail­ure pa­tients.

Also, the health sys­tem tied a por­tion of each af­fil­i­ate’s bonus pay­ments to whether HHC re­tains its Level 3 des­ig­na­tion un­der the Na­tional Com­mit­tee for Qual­ity As­sur­ance’s Pa­tient-Cen­tered Med­i­cal Home Recog­ni­tion Pro­gram.

Each of the three af­fil­i­ate groups’ con­tracts con­tains a slightly dif­fer­ent set of mea­sures, based on ne­go­ti­a­tions. But they draw from a ba­sic list of 13. PAGNY is set to re­ceive $31.3 mil­lion over the next three years, while physi­cians at Mount Si­nai and NYU will re­ceive $13.75 mil­lion and $14 mil­lion, re­spec­tively.

The pro­gram is struc­tured to help HHC stay out of the penalty range on both CMS pro­grams, no easy feat for a pub­lic sys­tem with a tight bud­get and a large pop­u­la­tion of poor and unin­sured pa­tients. Aviles ac­knowl­edged that physi­cians weren’t happy about los­ing their cost-ofliv­ing in­creases, but he said they weren’t sur­prised.

“They are mis­sion-driven and they un­der­stand the tremen­dous fis­cal pres­sure faced by safety net providers,” he said.

Dr. Jas­min Moshirpur, dean of the Ic­ahn School of Medicine at Mount Si­nai, agreed that physi­cians were ex­pect­ing such changes. She also pre­dicted that most doc­tors could meet the pro­gram’s tar­gets fairly eas­ily, although she said re­cent events such as su­per­storm Sandy and the in­fluenza out­break could make that more dif­fi­cult on some mea­sures, such as emer­gency de­part­ment triage-to-ad­mis­sion times.

Union hur­dle ahead

The pay-for-per­for­mance pro­gram faces an­other hur­dle. While the con­tracts with the three af­fil­i­ate groups are fi­nal, the Doc­tor’s Coun­cil SEIU, a union that rep­re­sents many of HHC’s physi­cians, is still ne­go­ti­at­ing col­lec­tive-bar­gain­ing agree­ments with the physi- cian groups.

The union was ini­tially re­cep­tive to the idea of an in­cen­tive pay­ment pro­gram but says the devil is in the de­tails. The Doc­tor’s Coun­cil has taken is­sue with sev­eral of the pro­gram’s mea­sures, in­clud­ing the one that ad­dresses ED triage-to-ad­mis­sion time. Such mea­sures place re­spon­si­bil­ity for qual­ity di­rectly on physi­cians, de­spite the role other clin­i­cians and staff mem­bers play in en­sur­ing beds are avail­able, a union spokes­woman said.

The union has also pushed for changes to the pro­gram that would give a dif­fer­ent weight for read­mis­sions among spe­cial-needs pop­u­la­tions, such as the home­less.

The on­go­ing union ne­go­ti­a­tions have not stalled HHC’s in­cen­tive pro­gram—it of­fi­cially launched Jan. 1, Aviles said—but un­less a con­tract is reached that in­cludes the pro­gram, physi­cians won’t be paid at the end of this year, as sched­uled.

“The clock has started tick­ing, and we’re col­lect­ing data. But if there are not col­lec­tive bar­gain­ing agree­ments in place that au­tho­rize the groups to dis­trib­ute the ad­di­tional rev­enue, that money will re­vert back to HHC,” Aviles said.

Moshirpur said ne­go­ti­a­tions are go­ing smoothly and she ex­pects a con­tract soon.

Other pub­lic hos­pi­tals are tak­ing no­tice, said Dr. Ram Raju, CEO of Cook County Health & Hos­pi­tals Sys­tem, Chicago. He said such pro­grams are much more likely to work when, like HHC, they take costof-liv­ing in­creases off the ta­ble. “Peo­ple will take the bird in the hand over the two in the bush,” he said. “When the au­to­matic in­creases go away, physi­cians are much more likely to ac­cept the pro­gram.”

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