How to keep pay­ment re­form mov­ing ahead

Modern Healthcare - - COMMENT - MER­RILL GOOZNER Edi­tor Emer­i­tus

The only sil­ver lin­ing in the mas­sive storm cloud hov­er­ing over the Af­ford­able Care Act is the per­sis­tence of bi­par­ti­san sup­port for pay­ment re­forms aimed at im­prov­ing health­care qual­ity and low­er­ing its cost.

While HHS Sec­re­tary Dr. Tom Price has tem­po­rar­ily post­poned ex­pand­ing the bun­dled-pay­ment pro­gram, the House-passed Amer­i­can Health Care Act left in­tact all the de­liv­ery sys­tem re­forms con­tained in the 2010 land­mark ACA leg­is­la­tion, in­clud­ing fund­ing for the Cen­ter for Medi­care and Med­i­caid In­no­va­tion. The first ver­sion of the Se­nate bill did the same.

But that doesn’t mean the CMS is pro­ceed­ing smoothly to­ward value-based re­im­burse­ment. A new Gov­ern­ment Ac­count­abil­ity Of­fice re­port found se­ri­ous prob­lems with Medi­care’s value-based purchasing pro­gram, which re­wards or pe­nal­izes hos­pi­tals based on a suite of qual­ity and ef­fi­ciency mea­sures.

More­over, the con­stant at­tacks on the ACA may be slow­ing for­ward mo­men­tum. It’s eas­ier for ca­reer of­fi­cials at the CMS to hun­ker down than to pro­ceed ag­gres­sively to­ward achiev­ing the Obama ad­min­is­tra­tion’s goal of hav­ing 50% of Medi­care pay­ments in al­ter­na­tive pay­ment mod­els—ei­ther ac­count­able care or­ga­ni­za­tions or some form of bun­dled pay­ments—by the end of 2018.

The ev­i­dence that is oc­cur­ring on CMS Ad­min­is­tra­tor Seema Verma’s watch can be found in the lat­est draft rule gov­ern­ing im­ple­men­ta­tion of the physi­cian pay­ment re­forms in the bi­par­ti­san Medi­care Ac­cess and CHIP Reau­tho­riza­tion Act. Fewer small prac- tices will be sub­ject to re­port­ing the qual­ity mea­sures

The CMS may be right that the 37% of physi­cians who ac­count for 65% of all Medi­care pay­ments will be gov­erned by MACRA’s new Merit-based In­cen­tive Pay­ment Sys­tem rules. But that still leaves nearly two-thirds of the na­tion’s physi­cians out­side its core qual­ity re­port­ing sys­tem.

Un­til doc­tors take that first baby step, there’s no way they will ever be ready to grad­u­ate into the risk-based con­tract­ing con­tained in al­ter­na­tive pay­ment mod­els such as ACOs.

Smaller prac­tices and hos­pi­tals ob­vi­ously have fewer re­sources to keep track of an ever-chang­ing ar­ray of qual­ity mea­sures. That’s why the CMS must limit its data re­port­ing to mea­sures that clearly help or­ga­ni­za­tions and physi­cians im­prove qual­ity and lower costs.

The GAO re­port on the hos­pi­tal value-based purchasing pro­gram, which tracked per­for­mance by about 3,000 hos­pi­tals over the five years the pro­gram has been in ef­fect, re­veals what can hap­pen when there are too many qual­ity mea­sures.

The re­port doc­u­ments how the CMS heard the crit­i­cism that too many of its early mea­sures fo­cused on clin­i­cal pro­cesses, not on pa­tient out­comes. For 2017, hos­pi­tals were scored on just three process mea­sures, down from a dozen in 2013. On the other hand, the CMS added 10 out­comes mea­sures, leav­ing the to­tal about the same.

But hos­pi­tals don’t have to re­port on all the mea­sures. More­over, they get to choose which mea­sures they will re­port once they’ve hit the thresh­old for par­tic­i­pa­tion, and their scores in the miss­ing cat­e­gories are de­ter­mined by their av­er­age score. No won­der smaller ru­ral and ur­ban hos­pi­tals, which re­port less data, do bet­ter un­der the pro­gram than safety net or large hos­pi­tals.

In 2015, the CMS added a sin­gle ef­fi­ciency mea­sure based on hos­pi­tal’s over­all cost per ben­e­fi­ciary, and gave it a 25% weight for the fi­nal score. It’s im­por­tant to re­ward low-cost providers.

But that sin­gle fac­tor en­abled about 20% of lower-cost hos­pi­tals whose qual­ity scores were below the me­dian to jump into the group re­ceiv­ing re­wards from the pro­gram, which re­dis­tributes up to 2% of Medi­care re­im­burse­ment from poor per­form­ers to bet­ter ones.

Provider groups con­tinue to pound on the CMS for re­quir­ing too many qual­ity in­di­ca­tors. If it’s go­ing to main­tain po­lit­i­cal and provider sup­port for the evo­lu­tion to­ward value-based re­im­burse­ment, the agency in its fi­nal rules pub­lished later this year must stream­line qual­ity re­port­ing re­quire­ments and of­fer a clear ra­tio­nale for ev­ery mea­sure used in its pay­ment re­form pro­grams.

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