CMS names hos­pi­tal win­ners, losers on qual­ity in­cen­tives

Modern Healthcare - - NEWS - By Gregg Blesch, Sabriya Rice and Mau­reen McKinney

Ideas writ­ten into law in 2010 to push hos­pi­tals to­ward bet­ter and safer care are now a per­va­sive part of do­ing business with Medi­care.

Next year, for the first time, the CMS will im­pose a 1% penalty on hos­pi­tals that fall within the worst-per­form­ing quar­tile on mea­sures of bad things that hap­pen to pa­tients dur­ing their stays, such as pres­sure ul­cers, pul­monary em­bolisms and in­fec­tions.

Last week, the agency iden­ti­fied 724 hos­pi­tals that will get hit with the first round of penal­ties im­posed un­der the Hos­pi­tal-Ac­quired Con­di­tion Re­duc­tion Pro­gram. They in­clude in­sti­tu­tions such as North­west­ern Memo­rial Hos­pi­tal in Chicago and the Cleve­land Clinic. The CMS es­ti­mated that over­all Medi­care pay­ments would drop by roughly $330 mil­lion in 2015 due to the HAC pro­gram.

It’s part of the health­care re­form law’s wide-rang­ing ef­fort, along with the read­mis­sions re­duc­tion and val­ue­based pur­chas­ing pro­grams, to make Medi­care pay­ments re­flect the qual­ity of care de­liv­ered. In fis­cal 2015 the pro­grams to­gether put 5.5% of in­pa­tient Medi­care pay­ments at risk.

“There’s a ten­dency to think it’s a bonus here or penalty there, but th­ese are pretty sig­nif­i­cant when you add them all to­gether,” said Eric Fon­tana, prac­tice man­ager for re­search and in­sights at the Ad­vi­sory Board Co.

The CMS also just posted the third it­er­a­tion of data for Medi­care’s val­ue­based pur­chas­ing pro­gram. In the lat­est round, the num­ber of hos­pi­tals get­ting a bonus ex­ceeds the num­ber be­ing pe­nal­ized by about 340, a re­ver­sal from last year. Still, more than 1,300 are in neg­a­tive ter­ri­tory.

The HAC pro­gram has drawn sharp crit­i­cism from hos­pi­tals and some ex­perts who warned that it would dis­pro­por­tion­ately af­fect hos­pi­tals that serve poorer and sicker pa­tient pop­u­la­tions. Those con­cerns were borne out by the data the CMS posted last week.

A chief com­plaint is that many of the mea­sures rely on claims data that isn’t con­sis­tent or re­li­able. Another is that the mea­sures aren’t ap­pro­pri­ately ad­justed to re­flect the sever­ity of pa­tients’ con­di­tions or so­cio-eco­nomic fac­tors.

Hos­pi­tals are scored across two mea­sure­ment do­mains. The first, weighted at 35%, is a com­pos­ite pa­tient-safety mea­sure de­vel­oped by the Agency for Health­care Re­search and Qual­ity that in­cludes in­di­ca­tors such as post­op­er­a­tive hip frac­ture rate. The sec­ond do­main, weighted at 65%, con­sists of two hos­pi­tal-ac­quired in­fec­tion mea­sures drawn from data re­ported to the Cen­ters for Dis­ease Con­trol and Preven­tion’s on­line in­fec­tion re­port­ing sys­tem.

About 140 hos­pi­tals nar­rowly dodged get­ting hit with the HAC penalty in 2015. The law calls for a 1% cut to be ap­plied to the hos­pi­tals scor­ing in the low­est quar­tile. The CMS ap­par­ently gave hos­pi­tals just over the thresh­old this year a pass be­cause ap­ply­ing the cut to all of them would have moved too many into the penalty box, ac­cord­ing to the Ad­vi­sory Board’s anal­y­sis of the data.

The re­lease of the HAC data comes weeks after HHS an­nounced an “un­prece­dented de­cline” in avoid­able hos­pi­tal harm from 2010 to 2013, which of­fi­cials said pre­vented an es­ti­mated 50,000 deaths and saved nearly $12 bil­lion. HHS at­trib­uted much of that progress to its own qual­ity-im­prove­ment ini­tia­tives, in­clud­ing the $1 bil­lion Part­ner­ship for Pa­tients.

In the value-based pur­chas­ing pro­gram, about 70 hos­pi­tals im­proved their pay­ment adjustment by a full per­cent­age point com­pared with last year’s re­sults. Only a few swung a per­cent­age point or more in the other di­rec­tion.

The Ad­vi­sory Board’s Fon­tana ob­served that many of the hos­pi­tals get­ting penal­ties are big ones. Be­cause the pro­gram is rev­enue-neu­tral, those penal­ties are gen­er­at­ing bonuses for a larger num­ber of smaller hos­pi­tals.

The pro­gram is funded by a $1.4 bil­lion pool gen­er­ated by an across-the­board re­duc­tion in base op­er­at­ing DRG pay­ments. For 2015, that cut rose to 1.5% from 1.25% in 2014. It will grow in­cre­men­tally an­nu­ally un­til reach­ing 2% in 2017. The ad­just­ments are based on hos­pi­tals’ per­for­mance across 26 mea­sures of ef­fi­ciency, clin­i­cal pro­cesses, pa­tient sat­is­fac­tion and out­comes.

The fis­cal 2017 pro­gram will add two safety mea­sures to the value-based pur­chas­ing pro­gram—for hos­pi­ta­lac­quired MRSA and Clostrid­ium dif­fi­cile in­fec­tions—and one new clin­i­cal process mea­sure for early elec­tive de­liv­er­ies. Six mea­sures will be re­moved be­cause they’ve been iden­ti­fied as “topped out.”

“Some mea­sures are get­ting to the point where we’ve achieved such high lev­els that there’s very lit­tle room for ad­di­tional im­prove­ment,” said Nancy Foster, the Amer­i­can Hos­pi­tal As­so­ci­a­tion’s vice pres­i­dent for qual­ity and pa­tient safety pol­icy.

North­west­ern Memo­rial Hos­pi­tal in Chicago is one of the hos­pi­tals be­ing hit by penal­ties in the CMS’ Hos­pi­ta­lAc­quired Con­di­tion Re­duc­tion Pro­gram.

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