The Current State of CMS Payfor-Performance. HFMA FL Annual Spring Conference May 22, 2017

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1 The Current State of CMS Payfor-Performance Programs HFMA FL Annual Spring Conference May 22,

2 AGENDA CMS Hospital P4P Programs Hospital Acquired Conditions (HAC) Hospital Readmissions Reduction Program (HRRP) Value Based Purchasing (VBP) Conclusion 2

3 HIGH-LEVEL PRIMER THE BIG 3 MEDICARE P4P PROGRAMS Hospital Value-Based Purchasing Program (VBP) Hospital-Acquired Conditions Reduction Program (HAC) Hospital Readmissions Reduction Program (HRRP) Incentive Structure Penalty or bonus depending on performance, 2% at risk. Penalty only, 1% for worst performing quartile. Penalty only, 3% maximum Specific Payment Targeted Base Operating DRG Payment Amount Total DRG Payment Amount Base Operating DRG Payment Amount Comment Budget neutral, creates winners vs. losers scenario Most significant financial impact; different from HAC Present on Admissions (POA) Each hospital compared to national average; performance based on retrospective three year period 3

4 HOSPITALS RECEIVING FY2017 PENALTIES Source: Advisory Board Analysis 4

5 MOVEMENT INTO/OUT OF PENALTY STATUS FFY2015 FFY2016 Source: CMS, Advisory Board 2016 Analysis 5

6 Hospital Acquired Conditions (HAC) Reduction Program 6

7 HAC PERFORMANCE IN FLORIDA 200 HAC Penalty Performance By Year Percentage of FL Hospitals receiving at Least 1 HAC Penalty From FY2015-FY % 84% 78% 36% Penalty 80 64% No Penalty % 16% 22% 0 FY 2015 FY 2016 FY 2017 FL Hospitals Receiving HAC Penalty FL Hospitals Receiving No Penalty 7

8 HAC PERFORMANCE IN FLORIDA HAC Penalty By Amount No Penalty $1K to $500K $501K to $999K $1.0M and over NOTE: FFY2017 analysis 8

9 HAC PENALTY VERSUS HRRP/VBP PENALTY 9

10 HAC PERFORMANCE PERIODS 10

11 HAC SUMMARY: MEASURES, PERFORMANCE PERIODS, WEIGHTS 11

12 HAC DOMAIN BASICS DOMAIN 1- AHRQ Measures Claims based (captures adverse events for Medicare discharges only) PSI measures calculated using ICD-10 codes and, for the secondary diagnosis, the present on admission (POA) value associated with each secondary diagnosis in the claim is N or U N = Diagnosis not present at inpatient admission U = Documentation insufficient to determine if the condition present at admission DOMAIN 2- CDC HAI Measures CDC HAI measures are chart-abstracted CDC measures calculated by dividing the total facility number of HAI events by the number of predicted HAI events 12

13 HAC WEIGHTING COMPARE FFY 2017 HAC Program FFY 2018 HAC Program Domain 1 Domain 2 13

14 FY2018 HAC CHANGE: MODIFIED PSI-90 Takeaway- Confusion! 14

15 MODIFIED PSI-90 COMPOSITE WEIGHTING (RECALIBRATED V6.0.2) PSI % PSI % PSI % PSI % PSI % PSI % PSI % PSI % PSI % PSI 08, 1.09% 15

16 FY2018 HAC CHANGE: REBASING OF SIR CALCULATION SIRs under the new baseline can be calculated starting with 2015 data Will be used by CMS: FFY2018 HAC program SIRs under the original baselinescan continue to be calculated through 2016 data Will be used by CMS: FFY2018 VBP program Starting with 2017 data, SIRs will only be calculated with new baseline 16

17 EXAMPLE: IMPACT OF SIR REBASING 2014 SIR: 0.50 National Median: 0.45 Interpretation: Hospital saw 50% CLABSIs than predicted, compared to national experience but just worse than 2014 median 2015 SIR: 1.20 National Median: 1.0 Interpretation: Hospital saw 20% CLABSIs than predicted, compared to 2015 national experience but just worse than 2015 median 17

18 FY2018 HAC CHANGE: SCORING METHODOLOGY 18

19 FY2018 HAC CHANGE: WINSORIZED Z-SCORE METHODOLOGY 19

20 CMS FY2018 IPPS PROPOSED RULE HAC CHANGES CMS HACRP Hospital Specific Reports for FY2018 available late Summer 2017 New risk adjustments for social and disability/medical complexity? Current risk factors: age, gender, comorbidities and complications Example social factors: low-income, race/ethnicity, geographic area of residence Example disability/medical complexity factors: prior hospitalization, nursing home residence, frailty, functional limitations Potential new FY2020 HAC measures: Inpatient falls w/ injury Adverse Drug Events (ADEs) Glycemic Events Ventilator Associated Events (VAEs) 20

21 CONCERNS & CRITICISMS OF HAC Design that penalizes 25% of hospitals every year, even if all hospitals significantly reduce HAC rates MedPAC HACRP comments- Teaching, DSH, high-acuity hospitals penalized a disproportionate amount 21

22 CONCERNS & CRITICISMS OF HAC DOUBLE DIPPING? 22

23 Hospital Readmissions Reduction Program (HRRP) 23

24 HOSPITAL READMISSIONS REDUCTION PROGRAM (HRRP) To reduce preventable and unplanned hospital readmissions that occur within 30 days of discharge Excess readmissions ratio (Predicted/Expected) using 30-day riskstandardized readmission rate Maximum penalty is 3% for being worse than expected in any of the conditions (penalty applied to MS-DRG operating payments) 24

25 HRRP: TARGETED CONDITIONS Readmission Measure FY FY FY AMI HF PN COPD THA/TKA CABG 25

26 HRRP: FINANCIAL IMPACT (FY 2017) TOP 10 HIGHEST PENALIZED NATIONALLY Provider Number Name State Penalty Total Operating Payment % Penalty FLORIDA HOSPITAL FL (6,414,479) 350,518, % YALE-NEW HAVEN HOSPITAL CT (3,424,306) 179,283, % BEAUMONT HOSPITAL, ROYAL OAK MI (2,871,447) 181,737, % LAKELAND REGIONAL MEDICAL CENTER FL (2,807,422) 102,460, % SOUTHCOAST HOSPITAL GROUP, INC MA (2,578,789) 115,124, % THOMAS JEFFERSON UNIVERSITY HOSPITAL PA (2,549,688) 120,268, % FORREST GENERAL HOSPITAL MS (2,489,849) 98,413, % VIDANT MEDICAL CENTER NC (2,373,618) 172,001, % ST JOSEPH'S REGIONAL MEDICAL CENTER NJ (2,348,997) 78,299, % CJW MEDICAL CENTER VA (2,287,065) 89,338, % 26

27 HRRP: FINANCIAL IMPACT (FY 2017) TOP 10 HIGHEST PENALIZED (FLORIDA) Provider Number Name Penalty Total Operating Payment % Penalty FLORIDA HOSPITAL (6,414,479) 350,518, % LAKELAND REGIONAL MEDICAL CENTER (2,807,422) 102,460, % LEE MEMORIAL HOSPITAL (2,063,845) 119,297, % NORTH FLORIDA REGIONAL MEDICAL CENTER (1,749,897) 90,200, % HOLMES REGIONAL MEDICAL CENTER (1,408,496) 97,812, % LEESBURG REGIONAL MEDICAL CENTER (1,325,503) 67,284, % ST LUCIE MEDICAL CENTER (1,286,372) 42,879, % LAWNWOOD REGIONAL MEDICAL CENTER & HEART INSTITUTE (1,238,664) 47,458, % AVENTURA HOSPITAL AND MEDICAL CENTER (1,058,625) 53,465, % JFK MEDICAL CENTER (1,053,112) 84,928, % 27

28 HRRP: FINANCIAL IMPACT (FY 2017) 28

29 HRRP: FINANCIAL IMPACT (FY 2017) Region Region Name n Penalty Total Operating Payment % Penalty 1 New England (CT, ME, MA, NH, RI, VT) 137 (28,203,022) 4,268,818, % 2 Middle Atlantic (PA, NJ, NY) 369 (90,748,494) 10,937,397, % 3 South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV) 536 (126,199,156) 17,214,736, % 4 East North Central (IL, IN, MI, OH, WI) 505 (84,424,069) 13,648,658, % 5 East South Central (AL, KY, MS, TN) 303 (51,417,089) 6,759,369, % 6 West North Central (IA, KS, MN, MO, NE, ND, SD) 269 (26,823,220) 6,701,541, % 7 West South Central (AR, LA, OK, TX) 550 (45,226,091) 9,886,739, % 8 Mountain (AZ, CO, ID, MT, NV, NM, UT, WY) 237 (15,244,391) 4,422,338, % 9 Pacific (AK, CA, HI, OR, WA) 405 (35,278,368) 8,482,601, % Grand Total 3,311 (503,563,902) 82,322,201, % 29

30 HRRP: FINANCIAL IMPACT (FY 2017) Teaching Status n Penalty Total Operating Payment % Penalty Non-Teaching 2,347 (349,486,494) 56,421,615, % Minor Teaching 642 (106,550,318) 17,210,646, % Major Teaching 322 (47,527,090) 8,689,939, % Grand Total 3,311 (503,563,902) 82,322,201, % Urban/Rural Status n Penalty Total Operating Payment % Penalty Large Urban 1,337 (264,125,439) 40,334,780, % Other Urban 1,137 (190,297,662) 34,519,055, % Rural 837 (49,140,801) 7,468,365, % Grand Total 3,311 (503,563,902) 82,322,201, % Ownership Type n Penalty Total Operating Payment % Penalty Not-for-Profit 1,791 (281,957,975) 46,057,399, % For-Profit 1,040 (161,684,562) 25,327,756, % Government 480 (59,921,365) 10,937,045, % Grand Total 3,311 (503,563,902) 82,322,201, % 30

31 HRRP P4P Programs Target Safety-Net Hospitals (ASPE report to Congress) 21 st Century Cures Act (December 13, 2016) Use dual eligible patients as a proxy for socioeconomic status (SES) Applies only to a hospital s Medicare population Effective in FY 2019 Budget Neutral 31

32 HRRP: FUTURE CHANGES (FY 2019) 1 Dually Eligible Inpatient Stays Total Medicare Inpatient Stays 2 ERR > Median Cohort ERR = Penalty ERR = Excess Readmission Ratio for measured condition Source: 81 FR (April 28, 2017) 32

33 HRRP: FUTURE CHANGES (FY 2019) CMS to stratify hospitals into 5 peer groups (also considering 2 or 10) Factoring in Dual Eligible Patients Proportion of full-benefit dual eligible inpatient stays (numerator) to hospital s Medicare inpatient stays (denominator) Patient must be a full-benefit dual eligible patient for the month of discharge Data obtained from State MMA file of dual eligibility Includes both Medicare FFS and Medicare Advantage stays CMS soliciting comments on 3-year or 1-year data period Source: 81 FR (April 28, 2017) 33

34 HRRP: TACTICS TO REDUCE READMISSIONS Early discharge planning Patient education Depression screening Care transitions support Timely PCP follow-up Source: CMS guide 34

35 HRRP: TACTICS TO REDUCE READMISSIONS Capture data to size the problem Meaningfully increase language access Leverage cultural values Engage Community Partners Source: Advisory Board 35

36 Hospital Value-Based Purchasing (VBP) 36

37 HOSPITAL VALUE-BASED PURCHASING (VBP) Created by the Affordable Care Act Shifts payments from lower performing to higher performing based upon quality scores (incentive or penalty) Quality scores based upon: Performance to national benchmarks (achievement) Performance to a baseline period (improvement) Total Performance Score 37

38 HVBP: CONTRIBUTION FROM ELIGIBLE HOSPITALS Federal Fiscal Year Contribution % % % % 2017 and after 2.00% $1.8B for

39 HVBP: WEIGHTING OF DOMAINS Domains FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Process of Care 70% 45% 20% 10% 5% Outcomes 25% 30% 40% 25% 25% Safety of Care 20% 25% Patient Experience 30% 30% 30% 25% 25% 25% Efficiency 20% 25% 25% 25% Total 100% 100% 100% 100% 100% 100% 39

40 HVBP: FINANCIAL IMPACT (2017) 40

41 HVBP: FINANCIAL IMPACT (2017) 41

42 HVBP: FUTURE CHANGES Safety Domain Removes PSI-90 (v 5.0.1) for FY Modified PSI-90 (v 6.0.1) for FY 2023 Efficiency and Cost Domain 30-day PN Episodic Payment for FY

43 HVBP: FUTURE CHANGES HCAHPS Changes Pain management questions will focus on the hospital s communications with patient about the patient s pain Effective January 1, 2018 Projected to be incorporated into VBP in FY 2022 SES Factors CMS request for feedback on accounting for social risk factors 43

44 HVBP: KEY DRIVERS OF SUCCESS TPS TPS n n Process of Care Process of Care Outcomes NATIONAL Outcomes Patient Experience Safety Efficiency Total >= , < , FLORIDA Patient Experience Safety Efficiency Total >= <

45 QUESTIONS? 45

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