Quality Based Impacts to Medicare Inpatient Payments

Quality Based Impacts to Medicare Inpatient Payments

Overview New Developments in Quality Based Reimbursement Recap of programs Hospital acquired conditions Readmission reduction program Value based purchasing Reimbursement impacts 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 2

New Developments in Quality Based Reimbursement 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 3

Socioeconomic Status Many comments to CMS about the lack of socioeconomic status (SES) [or sociodemographic status (SDS)] CMS has continued to push back against comments that SES makes a significant difference risk scoring 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 4

Socioeconomic Status 2013 Medicare Hospital Quality Chartbook 2011 Data Hospital wide Risk-standardized Readmission Rate High proportion of Medicaid (>= 28%) Low proportion of Medicaid (<= 5%) 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 5

Socioeconomic Status CMS comments on SES adjustment We continue to believe that the same care protocols and processes that are successful in caring for nonlow-ses patient populations may also be successful in caring for low-ses patient populations. We continue to have concerns about holding hospitals to different standards for the outcomes of their patients of low SES we do not want to mask potential disparities or minimize incentives to improve the outcomes of disadvantaged populations. 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 6

Socioeconomic Status CMS committed to working with NQF and other stakeholder communities to continuously refine our measures and to address the concerns associated with SES and risk adjustment. 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 7

Socioeconomic Status National Quality Forum (NQF) Technical Report: Risk Adjustment for Socioeconomic Status or Other Sociodemographic Factors Released August 15, 2014 Important because NQF initiatives drive the data collection used by CMS for quality reporting 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 8

Socioeconomic Status NQF sees measures used for accountability programs and pay-forperformance and responds: Getting the measures right is important given that they are being used to determine which providers to include in networks, how to determine financial rewards or penalties, where to go for healthcare services, and where to focus improvement efforts 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 9

Socioeconomic Status Ten recommendations, important take-aways SES factors should be included in risk adjustment unless conceptual reason or empirical evidence to indicate such adjustment is inappropriate. Transition period should include periods of reporting both SES adjusted and unadjusted scores Consensus Standards Approval Committee recommended, and the NQF Board of Directors approved, a trial period that lifts restrictions against SES adjustments Created a Disparities Committee 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 10

Socioeconomic Status From the NQF Report, traits of a sociodemographically challenged patient: Poverty Low income and/or no liquid assets Low levels of formal education, literacy, or health literacy Limited English proficiency Minimal or no social support not married, living alone, no help available for essential health-related tasks Poor living conditions homeless, no heat or air conditioning in home or apartment, unsanitary home environment, high risk of crime No community resources social support programs, public transportation, retail outlets 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 11

Source of Performance Data Medicare claims are a significant source of data used in benchmarking CMS often marries claims data from other sources (e.g. physician office) Introduces additional context to consider when auditing HIM activity 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 12

Hospital Acquired Conditions HACs become a penalty in FFY 2015 Composite score from three sources of infection tracking Composite Medicare safety indicators Two types of CDC hospital acquired infection measures (Medicare and non-medicare) 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 13

Hospital Acquired Conditions 1% reduction in payment for hospitals in the top quartile. This is an all-or-nothing penalty. 99 percent of the amount of payment that would otherwise apply. Reduction applies to add-on payments such as outliers, DSH, uncompensated care, and IME 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 14

Hospital Acquired Conditions Two domains If volume minimums met, 1 through 10 score based on percentile of performance. Domain 1 AHRQ Patient Safety Indicators (PSI): 35% Domain 2 CDC National Healthcare Safety Network (NHSN) measures: 65% 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 15

Hospital Acquired Conditions Domain 1 AHRQ Patient Safety Indicators (PSI) PSI-90 composite measure Claim extracted measure FFY 2015 period: July 2011 June 2013 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 16

Hospital Acquired Conditions Domain 2 CDC National Healthcare Safety Network (NHSN) measures Standardized Infection Ratio (SIR) for each Healthcare associated infection (HAI) Measure counts if SIR predicts at least 1 HAI event. Chart abstracted measures FFY 2015 period: CY 2012 & 2013 Sample includes Medicare and non-medicare 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 17

Hospital Acquired Conditions Domain 2 Measures Central line associated blood stream infection (FFY 2015) Catheter associated urinary tract infection (FFY 2015) Two surgical site infection (FFY 2016) Two infectious diseases (FFY 2017) 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 18

Hospital Acquired Conditions For CDC hospital acquired infections, sample size matters Score based on performance relative to predicted number of infections (risk adjusted) For 12 month period, if only 10 infections projected, impact of a few infections: 0 infections: 100 th percentile (higher is better) 4 infections: ~60 th percentile 10 infections: ~39 th percentile 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 19

Hospital Acquired Conditions Data for FFY 2015 penalty is not yet available, though providers have received hospital specific reports Proxy data on Hospital Compare shows 20 NJ providers in danger of 1% penalty 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 20

Hospital Readmission Reduction Program CMS Goal: Reduce readmissions related to costliest conditions Providers with high numbers of readmissions in targeted areas will have reduced reimbursement Max of 1% in FFY 2013, 2% in FFY 2014 and 3% in FFY 2015 Risk-adjusted Based on three-year rolling averages 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 21

Hospital Readmission Reduction Program Excess readmission ratio = Predicted Readmission Rate / Expected Readmission Rate Excess readmission ratio greater than 1 means too many readmissions per CMS metrics Large excess readmission ratio does not mean huge penalty. Penalty is proportional to excess readmissions * volume 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 22

Hospital Readmission Reduction Program Targeted areas for FFY 2015 Heart attack (AMI) Heart failure (HF) Pneumonia (PN) Total hip / knee arthroplasty (HK) (new) Chronic obstructive pulmonary disease (COPD) (new) 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 23

Hospital Readmission Reduction Program For FFY 2017, new measure: Coronary Artery Bypass Graft (CABG) Annual cost of readmissions $151 million Isolated CABG procedures only. Patients with other cardiac procedures in same encounter are excluded. Unlike other measures, CABG readmission methodology includes cases transferred to acute care hospital after procedure Presumption is that provider who is transferring the case will be encouraged by this measure to work closely with the institutions they transfer patients to, to provide optimal continuity of care for their patients 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 24

Hospital Readmission Reduction Program Planned Readmission Algorithm updated Identifies procedures that are always considered planned (and therefore not an unplanned readmission) Identified primary discharge diagnoses that are always planned Procedures considered planned unless accompanied by an acute (or unplanned) primary diagnosis For example, ongoing treatments such as maintenance chemotherapy for cancer or cardiac device placement for cardiovascular disease patients are excluded from the calculation (exception: therapeutic radiation is somehow usually unplanned) Clinical Classification Software (CCS) used 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 25

Hospital Readmission Reduction Program Change to v3.0 from v2.1 did not significantly change readmission rates; however, introduction of v2.1 reduced the readmission rates by ~1% for AMI, HF, & PN in FFY 2014 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 26

Distribution of Readmission Reduction Penalties (All US Providers) -2.8% -2.4% -2.0% -1.6% -1.2% -0.8% 60% 50% 40% 30% 20% 10% 0% Distribution of Readmission Reduction Penalties (NJ Providers) 50% 40% 30% 20% 10% 0% -2.8% -2.4% -2.0% -1.6% -1.2% -0.8% -0.4% 0.0% -0.4% FFY 2013 FFY 2014 FFY 2015 0.0% Percent Distribution Percent Distribution FFY 2013 FFY 2014 FFY 2015 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 27

Hospital Readmission Reduction Program Reimbursement Impact Penalty is proportional to volume in risk areas Financial impact could be small for very low volume risk areas with excessive readmissions Medicare HMOs are taking action to deny payment for readmissions Looks like QIO program, but applies different standards 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 28

Value Based Purchasing CMS goal: Pay for value Incentivize providers to meet quality standards by tying reimbursement to performance metrics Achieve quality scores OR Improve score quality Performance Period ( Current period) Baseline Period (Two years prior to Performance) 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 29

Value Based Purchasing Reimbursement impact Revenue neutral program for CMS All hospitals will see a reduction in the operating payment, then add back based on performance 1.5% for FFY 2015 1.75% in FFY 2016 2.00% in FFY 2017 and beyond. CMS has no plans to increase financial impact. 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 30

Value Based Purchasing FFY 2013 FFY 2014 FFY 2015 FFY 2016 Clinical Process of Care 70% 45% 20% 10% Patient Experience of Care 30% 30% 30% 25% Outcomes 25% 30% 40% Efficiency 20% 25% CMS believes that domains need not be given equal weight, and that over time, scoring methodologies should be weighted more towards outcomes, patient experience of care, and functional status measures (for example, measures assessing physical and mental capacity, capability, well-being and improvement). 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 31

Value Based Purchasing Clinical process of care Clinical measures historically reported through the IQR program National standard is near 100% compliance for many measures Weight of this component is decreasing, very little separation in scores across providers 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 32

Value Based Purchasing Patient Experience of care 8 dimensions in the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS). For example, Communications with Nurses, Doctors Responsiveness of staff Communication about medicines Cleanliness & quietness 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 33

Value Based Purchasing Outcomes Measures FFY 2014: Three 30-Day mortality measurements: AMI, HF & PN FFY 2015: Add AHRQ Patient Safety Indicators (PSI) composite and CDC Central Line Associated Blood Stream Infections (CLABSI) FFY 2016: Add CDC catheter associated urinary tract infections (CAUTI) and Surgical Site Infection (SSI) for Colon and Abdominal Hysterectomy 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 34

Value Based Purchasing Efficiency Domain Only one measure: Medicare Spending per Beneficiary Begins FFY 2015 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 35

Value Based Purchasing Medicare Spending per Beneficiary Three periods: Three days prior to admission, the inpatient encounter, and 30 days after discharge Standardized payment that removes IME, DSH, and any wage related factors Includes all spending, physicians, hospital readmissions, DME, and most importantly, post-acute care providers 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 36

Value Based Purchasing Medicare Spending per Beneficiary Spending per episode is risk adjusted across 95 risk factors Expected spending for an average episode based on nationwide data for each DRG Expected spending then adjusted + / - for each risk factor 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 37

Value Based Purchasing Medicare Spending per Beneficiary Comparative Benchmarks New Jersey U.S. Average Spending per Episode $20,918 $19,578 MSPB Amount (Avg. Risk-Adjusted Spending) $21,011 $19,239 U.S. National Median MSPB Amount $19,546 $19,546 Average MSPB Measure 1.07 0.98 Note: Medicare Spending refers to funds spent by Medicare to treat patients having an index admission in a hospital setting. This does NOT refer to provider s cost to treat the patient. 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 38

Value Based Purchasing Spending by segment and provider type MSPB 2013 Data New Jersey Average Spending per Episode Percent of Spending per Episode Nation Average Spending per Episode Percent of Spending per Episode 3 Days Prior to Admission $607 2.9% $627 3.2% Inpatient Admission $10,271 49.1% $10,533 53.8% Inpatient Hospital $8,451 40.4% $9,006 46.0% Carrier (Professionals) $1,799 8.6% $1,508 7.7% Others $21 0.1% $20 0.1% 30 Days Post Discharge $10,062 48.1% $8,419 43.0% Home Health Agency $628 3.0% $764 3.9% Hospice $84 0.4% $117 0.6% Inpatient Hospital* $2,678 12.8% $2,604 13.3% Outpatient $648 3.1% $666 3.4% Skilled Nursing Facility $4,393 21.0% $3,093 15.8% DME $105 0.5% $98 0.5% Carrier (Professionals) $1,506 7.2% $1,077 5.5% Total $20,918 $19,578 *Includes 09/09/2014 LTACH, IRF, IPF CBIZ KA Consulting Services, LLC for NJ HFMA 39

Value Based Purchasing Number of Providers (All US) 500 450 400 350 300 250 200 150 100 50 0 Distribution of VBP Net Impacts (FFY 2014) 20 18 16 14 12 10 8 6 4 2 0 Number of Providers (NJ Only) All US NJ Only 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 40

Value Based Purchasing Realignment of Measures Safety Clinical Care Outcomes Clinical Care Processes Efficiency and cost reduction Patient experience FFY 2017 Measures 20% CAUTI, CLABSI, C. difficile, MRSA, PSI-90, SSI (All were in Outcomes Measure) 25% Mortality (AMI, HF, PN) 5% AMI-7a, IMM-2, PC-01 25% MSPB 25% HCAHPS 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 41

Questions? Contact information Brian Herdman Thank You bherdman@cbiz.com (609) 918-0990 x131 09/09/2014 CBIZ KA Consulting Services, LLC for NJ HFMA 42