Value-Based Purchasing & Payment Reform How Will It Affect You? HFAP Webinar September 21, 2012 Nell Buhlman, MBA VP, Product Strategy Click to view recording.
Agenda Payment Reform Landscape Current & future Hospital exposure under payment reform Value-based Purchasing How are hospitals doing? Strategies for Success Under Payment Reform Taking an integrated approach The methodology is your friend (really) Using the methodology to prioritize improvement opportunities 2
The Impact and Challenge of Ever-Increasing Initiatives Medicare Payment at Risk Under CMS Quality-based Payment Reform Initiatives 2010 2011 2012 2013 2014 2015 2016 2017 Inpatient Quality Reporting Requirement (IQR, formerly RHQDAPU) 2% of APU VBP VBP Value-based Purchasing (VBP) 2% Readmissions 3% Hospital Acquired Conditions (HAC) Hospital Acquired Conditions 1% Meaningful Use Meaningful Use 1% 3
Challenges Common to all the Reform Initiatives Fluid scope Expanding area of interest Removal of topped-out measures Shared measures Limited pool from which to draw Double jeopardy for poor performers Thresholds and benchmarks set extremely high Rising over time as performance improves across the board 4
Inpatient Quality Reporting Initiative (IQR) Incentive / Penalty 2% of Annual Payment Update (Pay for Reporting) Clinical Chart-abstracted Measures ( Core Measures ) AMI Heart Failure Pneumonia Surgery ED Immunizations VTE Stroke Measurement Areas of Interest Patient Experience Structural Measures HCAHPS Registry participation Claims-based Measures Mortality Readmissions AHRQ composite measures Considerations List of included measures changes from year to year. Data must be on time, complete and accurate to avoid penalty. 5
Value-based Purchasing (VBP) Incentive / Penalty 1% of Base DRG operating payment in FY13, rising to 2% in FY17 FFY 2013 Core Measures Patient Experience AMI, HF, PN, SCIP HCAHPS FFY 2014 Core Measures HCAHPS Outcomes (Largely unchanged) (Unchanged) 30d risk- adjusted mortality AMI, HF, PN Measurement Areas of Interest FFY 2015 (proposed) Core Measures Patient Experience Outcomes Efficiency of Care (Largely unchanged) (Unchanged) Adding AHRQ PSI composite and CLABSI Average spending per M/care Beneficiary FFY 2016 (proposed) Clinical Care Person & Caregiver Experience & Outcomes Safety Efficiency & Cost Reduction Care Coordination Community/Population Health Considerations Domain weighting for score calculation changes as new domains added Measures within domains subject to change (additions, deletions) Proposal for FY16 is a realignment of all measures 6
HCAHPS in VBP: Relatively Greater Going Forward HCAHPS 30% 2013 Core Measures 70% Outcomes 25% 2014 HCAHPS 30% Core Measures 45% Efficiency 20% 2015 HCAHPS 30% Outcomes 30% Core Measures 20% 7
Readmissions Reduction Initiative Incentive / Penalty Capped at 1% of base DRG operating payment in FFY 2013, 2% in FFY 2014, and 3% in FFY 2015 Measurement Areas of Interest FFY 2013 FFY 2015 Excess readmissions for AMI, HF, PN Adding Chronic Obstructive Pulmonary Disorder Several cardiac and vascular surgical procedures Other conditions or procedures the Secretary chooses Considerations Future measures require exclusions for certain types of readmissions (e.g., readmissions unrelated to original admission), but current measures are all cause CMS will compare observed rates to expected rates to determine: 1) number of excess readmissions and 2) excess payments associated with excess readmissions. Regardless of amount of excess payments associated with excess readmissions, penalty cannot exceed the stated cap for the FFY. 8
Focus: Excess costs associated with excess readmission 9
Hospital Acquired Conditions Incentive/Penalty Measurement Areas of Interest Considerations Currently: Non-payment for specified HACs FFY 2015: 1% reduction of base DRG operating payment for hospitals in the top quartile of HAC occurrence Foreign Object Retained After Surgery Air Embolism Blood Incompatibility Stage III and IV Pressure Ulcers Falls and Trauma Manifestations of Poor Glycemic Control Catheter-Associated Urinary Tract Infection Vascular Catheter-Associated Infection Surgical Site Infection Following specified surgical procedures Deep Vein Thrombosis (DVT)/Pulmonary Embolism (PE) following certain orthopedic procedures List of conditions likely to change (additions and deletions) Composite score calculation (weighting) not yet determined There is always a top quartile! 10
Meaningful Use Incentive / Penalty Measurement Areas of Interest Considerations Currently: Incentive payments and grants available for early adopters FFY 2015: Initially a portion of APU at risk, eventually entire APU at risk Established by HITECH provision of ARRA, requires hospitals to use certified EHR technology: In a meaningful manner (e.g., e-prescribing) For electronic exchange of health information to improve quality of care To submit clinical quality measures and other such data as required by the Secretary Three stages of criteria. Progressively complex/stringent Increasing number of quality measures over time. EHRs can be certified as full EHRs with providing all the necessary data elements for quality measures submission 11
Example of Potential Hospital Impact Dollars subject to Medicare P4P programs at a 146-bed hospital in Florida FFY13 FFY14 FFY15 FFY16 FFY17 % $ % $ % $ % $ % $ VBP 1 $ 210,054 1.25 $ 262,568 1.5 $ 315,081 1.75 $ 367,595 2 $ 420,108 Readmits 1 $ 210,054 2 $ 420,108 3 $ 630,162 3 $ 630,162 3 $ 630,162 HAC 1 $ 210,054 1 $ 210,054 1 $ 210,054 MU 1 $ 210,054 1 $ 210,054 1 $ 210,054 Sum 2 $ 420,108 3.25 $ 682,676 6.5 $ 1,365,351 6.75 $ 1,417,865 7 $ 1,470,378 5yr Total $ 5,356,377 Using MedPar 2010 data 12
Example of Potential Hospital Impact Dollars subject to Medicare P4P programs at a 550-bed hospital in Kansas FFY13 FFY14 FFY15 FFY16 FFY17 % $ % $ % $ % $ % $ VBP 1 $ 668,940 1.25 $ 836,175 1.5 $ 1,003,410 1.75 $ 1,170,645 2 $ 1,337,880 Readmits 1 $ 668,940 2 $ 1,337,880 3 $ 2,006,820 3 $ 2,006,820 3 $ 2,006,820 HAC 1 $ 668,940 1 $ 668,940 1 $ 668,940 MU 1 $ 668,940 1 $ 668,940 1 $ 668,940 Sum 2 $1,337,880 3.25 $ 2,174,055 6.5 $ 4,348,110 6.75 $ 4,515,345 7 $ 4,682,580 5yr Total $ 17,057,970 Using MedPar 2010 data 13
VBP: How are Hospitals Doing?
VBP National Baseline Performance FFY13 30 55 15
VBP Change since Baseline FFY13 48 69 16
Distribution of Predicted Overall 2013 VBP Scores 56 74 17
Communication with Doctors: Change in Performance since Baseline 18
Communication with Nurses: Change in Performance since Baseline 19
Responsiveness: Change in Performance Since Baseline 20
VBP Baseline Performance FFY14 Average score decreases by 15 points. (Ugh.) 29 47 21
Success Under Payment Reform: Take an Integrated Approach
Separate but Related IQR HAC 23
Separate but Related Ample published evidence that improvement in metrics subject to P4P offer benefits that cut across multiple P4P initiatives Higher overall patient satisfaction associated with lower 30-day hospital readmission rates (AMI, HF, PN). Higher percentage of patients responding Always to discharge instructions question associated with lower readmission rates High Likelihood to Recommend and Overall Rating associated with fewer decubiti and nosocomial infections Better performance on HQA measures correlated with lower riskadjusted 30 mortality on same conditions Higher patient satisfaction associated with adherence to standards of care and lower inpatient mortality Higher scores on perception of cleanliness, blood-draw skills, and nurse responsiveness associated with lower infection rates and infection mortality. 24
Example: Readmission in the context of HCAHPS performance (by facility) 25
Example: Readmission in the context of HCAHPS performance (by group) 26
Addressing Quality-based Payment Reform (In Four Easy Steps)
1. 28
2. Stakeholder Awareness and Involvement Who What they need to know and do Quality Leadership Opportunityspecific Stakeholders Process Drivers Methodology. Data analysis and drill down. Identify potential opportunities for improvement. Compliance with standards. Executive Leadership Clinical Leadership Shape the culture. Set the tone. Evaluate opportunities for improvement. Strategy-setting. Board Degree of exposure. Overall scores. Progress to goals. Drive change. 29
3. Use the Methodology to Prioritize Opportunities Financial Analysis Estimate exposure: total incentive ( Withhold ) Incentive earned/lost given current performance Gap Analysis Identify aspects of performance driving the greatest losses Determine incremental improvement necessary to drive additional points/ payments Opportunity Analysis Look for aspects of performance affecting multiple P4P initiatives Look for measures that move in tandem and Rising tide measures What does drill-down show? What s the effort required to improve? Who needs to be involved? 30
3. Use the Methodology to Prioritize Opportunities Scenario Planning Create improvement scenarios with prioritized opportunities Realistic, Achievable goals (base, target, stretch) Identify and evaluate scenarios providing maximum yield 31
3. Use the Methodology to Prioritize Opportunities Things to consider Relative weight of metrics and effort required to improve In VBP, measures can drive identical incentive losses Sample size: small number of misses can drive big losses A HAC is not a HAC is not a HAC Rising Targets: rate improvement needs to outpace aggregate improvement Rising VBP thresholds Hard to get out of the HAC penalty box Role of stakeholders: Change takes place at the person level Readmissions, Mortality sensitive to practice at post-acute providers Physician engagement, Patient engagement, Coordination of care 32
Not all opportunities are created equal 33
Effect of Rising Targets 34
Effect of Rising Targets 35
Rising Tide measure: Nurse Communication This cluster of measures makes up 15% of a hospital s VBP score 36
4. Best Practices Identify and Emulate Best Practices for Top Improvement Opportunities Concurrent management of core measures patients Hourly Rounding Physician Engagement Collaboration with post-acute providers Make the case for change with evidence-based WIIFM Demonstrate how the best-practices are aligned with professional goals and personal interests of the individual whose practice, processes or behavior you are trying to change 37
Make the case Hourly Rounding Impact on Top Box % Yes=4723 38 No=1950
A Practical Example
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Clinical Performance Misses on 4 patients, Loses $102,493 Misses on 7 patients, Loses $102,493 Misses on 11 patients, Loses $102,493 41 Misses on 4 patients, Loses $71,745
Satisfaction Performance 42 What you don t see: 19% of patients responded Usually
Gap & Opportunity Analysis 43
Concluding Thoughts Success under Payment Reform: 1. Understanding Financial impact Performance: where we are, where need to be Methodologies: now and next 2. Take an integrated approach Seven flies with one blow 3. Real change happens at the person-level Facilitate consistency Make the case (WIIFM) 44