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Response is mixed on CMS value-based purchasing paper
Some question whether all ramifications have been considered
If the reaction to the options paper released by the Centers for Medicare & Medicaid Services (CMS) on value-based purchasing does anything, it points out clearly just how difficult — if not impossible — it will be to create a plan that makes everyone happy. The good news is there is still a lot of talking and responding to be done before the final plan is in place.
The options paper, (www.cms.hhs.gov) published April 12, was developed in response to the Deficit Reduction Act of 2005, which authorized CMS to develop an approach to value-based purchasing (VBP) for hospitals for fiscal year 2009. It includes chapters on:
One of the more interesting reactions to the paper is that for once, government may actually be acting too quickly.
"This whole concept got integrated into public law before pay for performance [P4P] had been thoroughly tested so, consequently, Congress jumped on the bandwagon before we had good data that showed its goals could actually be achieved," notes Patrice L. Spath, consultant with Brown-Spath Associates in Forest Grove, OR. "Now, CMS has to move ahead; they can't go back and say there is no value to it, or it has not achieved its intended goals. The hospital industry is stuck with it unless Congress goes back and changes the law."
Is P4P necessary?
One of Spath's main questions is whether, in fact, P4P is necessary to spur performance improvement. "Studies have shown, for example, that public reporting improves performance and has really advanced QI in hospitals. So the question for me is: Is that enough by itself to enable us to achieve the quality goals we have set?" Spath poses.
AHA weighs in
In a letter to CMS, the American Hospital Association (AHA) made a number of comments. For example, it urged CMS to move cautiously to avoid any "unintended consequences that may adversely affect hospitals and the patients they serve." In addition, it voiced concern that some aspects of the program "do not ensure the transparency and predictability that hospitals need for budgeting purposes." Finally, it encouraged CMS to design a program "that ensures all hospitals, including those with a small number of reporting cases, have a fair opportunity to earn the financial incentives."
"We do a lot of work on sharing hospital data publicly as part of the Hospital Quality Alliance," notes Nancy Foster, AHA's vice president for quality and patient safety policy. "That sends a strong signal about what's important and where the opportunities [for improvement] are. Adding a payment link throws even more weight behind these things. We have found that pushing measures strongly has caused some organizations to respond by proactively ensuring that every potential patient that may be eligible for a certain treatment gets that treatment — but if you don't craft the measure carefully, you sometimes end up pushing [the wrong treatment for the patient]."
For example, she notes, there is a requirement for certain pneumonia patients in the ED to receive antibiotics within four hours. "This suggests to some hospitals that they may need to act before they know if the pneumonia the patient has is bacterial," says Foster. "What's important is striking that right balance, choosing measures wisely and making sure they do what they are intended to do."
Affects on budgeting
In terms of budgeting, she continues, "at the beginning of the year, you should have a reasonable way to expect what income you will have so you know what you are able to afford in terms of providing services. For example, will you be able to continue to run your [free] clinic if you are also taking a penalty on some of these quality measures?"
But there are two sides to this issue, says Spath. "AHA says you need to tell us the target ahead of time, but if I'm a consumer, the target should be 100%," she says. "However, if you're a financial person and need to budget based on expected revenue, you do need some expectations."
Spath says she agrees with the need for validation and predictability, "but when you tie it to money, it creates a whole different issue. Now, with Joint Commission or CMS measures, if you do not get the results back for six months, it's no big deal. But here, if the results from last year are what next year's payment is based on, you can't fix [revenue] in the first six months. Still, the consumer would say if you're always working to do the right thing, it shouldn't matter what the lag time is."
When it comes to smaller hospitals, says Foster, "the devil is really in the details." The options paper, she notes, suggests there will be a pool of dollars created by withholding what might have been paid under the DRG system. "There are places in the paper where if you had fewer than 10 cases, a given measure might not work for you," she notes.
"My issue is, should a patient expect the same level of quality in a rural facility as in a large urban one, and the answer really should be yes," says Spath. "If you have an MI you should be put on a beta-blocker; shouldn't that happen regardless of where you go? The trick is incorporating all payment incentives of score and structure, but the bottom line is the patient should get the same standard of care."
How will data be handled?
The American Health Quality Association (AHQA) also has some issues with the options paper, says David G. Schulke, executive vice president. "It seems to capture what Congress was looking for," he concedes. "But in the paper, CMS says it's important for QIOs [quality improvement organizations] to continue to provide technical assistance to hospitals on quality improvement; but it will eliminate our support to hospitals in correctly submitting data."
QIOs, he says, view that as connected with the help they provide to hospitals in terms of self-measurement. "A key part of that is assessing your own performance," he says, "and that's what CMS perceives — the link to validating hospital public reporting data."
Hospitals, he notes, create files for people to view on Hospital Compare, and receive a financial reward for doing it accurately. "The QIOs' job today is to assist hospitals with ensuring that the data they submit are accurate, and when problems are spotted by auditors, helping hospitals figure out what they did wrong and how not to do it again," says Schulke.
When hospital provider data are to be publicly reported, a small sample is validated by a clinical data abstraction center, or CDAC. "The CDAC, which is funded out of the QIO program, validates the data and sends them back to the hospital," Schulke explains. "Then the QIO teaches the hospital how to eliminate any errors that were found."
There is "quite a bit of interaction" between the hospitals and the QIOs, he continues. "But CMS proposes to treat these two functions in very different ways. It says we should continue to assist hospitals in improving, but remove our support in correctly submitting data." For QIOs, he insists, these are seamless activities. "CMS, however, says it will give this function to a smaller number of contractors — and not necessarily QIOs."
Using two different contractors, says Schulke, "probably introduces some inefficiencies." Beyond this one issue, he says, "what CMS is trying to do with value-based purchasing is good."
For Spath, this new stance of CMS raises an important question. "Who will go in and do validations?" she poses. "The more people who do the validation studies, the more unreliable the validation process becomes — and since it is tied to payment, the validity of the data becomes even more important."
Spath says there must be some logic behind the decision. "Hospitals might have somebody new to interface with; the question is, if CMS is already paying for this function and QIOs are doing it, why have they chosen not to use this pre-existing framework? They may not be all that pleased with what some QIOs are doing. My bet is it will still be done by QIOs, but only those who have had a consistent track record."
Spath notes that CMS also is talking about having a repository for reporting adverse events. "This will be a contract that may be let to QIOs," she offers.
Spath says that for quality managers, the options paper reinforces the inevitability of P4P. "It means this is the way it will be, and therefore, it will be very important to have good quality data that are accurate and timely," she says. "You need to do your own internal validation studies; you need to look at ways to capture the data electronically as much as possible. In fact, you almost have to have a little process improvement project for each of these measures to see how you can make improvements. Measures are the right thing to do, but you've got to control your processes in your own organization."
Where do we go from here? "CMS has taken input and written comments, with an open session to be held on June 12," Foster notes. "It will be incorporating changes based on those comments into a final proposal, which we believe will go forward to Congress in the middle of the summer."
At the same time, she says, the Medicare Payment Advisory Commission is working on its own proposal. "All of that then gets sent to Congress for further deliberation," she explains.
[For more information, contact:
Nancy Foster, Vice President for Quality and Patient Safety Policy, American Hospital Association, One North Franklin, Chicago, IL 60606-3421. Phone: (202) 638-7568.
David G. Schulke, Executive Vice President, American Health Quality Association, 1155 21st Street, NW, Washington, DC 20036. Phone: (202) 331-5790.
Patrice L. Spath, Brown-Spath Associates, P.O. Box 721, Forest Grove, OR 97116. Phone: (503) 357-9185. E-mail: Patrice@brownspath.com.]