Look ahead to succeed under VBP
Executive Summary
The Centers for Medicare & Medicaid Services (CMS) is adding new metrics to its Value-based Purchasing Program each year, and case managers should look ahead to ensure that their hospital performs well on the measures.
• CMS automatically withholds a percentage of the Medicare base operating payment each year (1.5% in fiscal 2015), and hospitals can earn back what was deducted or more by performing well.
• Value-based purchasing for 2015 includes four domains: clinical processes of care, outcomes, Hospital Consumer Assessment of Healthcare Programs and Systems (HCAHPS), and hospital efficiency of care.
• Any measure that is in the Inpatient Quality Reporting Program is considered to be on deck for value-based purchasing.
New metrics are being added every year
It’s too late for case managers to affect their hospitals’ reimbursement under the Centers for Medicare & Medicaid Services Value-based Purchasing Program for fiscal 2015. Instead, case managers should look to the future and take a proactive approach to ensuring that patients receive cost-efficient care, says Danielle Lloyd, MPH, vice president, policy development and analysis for Premier healthcare alliance.
The performance periods for value-based purchasing that affects reimbursement for fiscal 2015 all concluded by Dec. 31, 2013. The performance period ends by Dec. 31, 2014, for everything included in the fiscal year 2016 payment period.
"Value-based purchasing is fairly new, and new metrics are being added every year. Hospitals can’t wait until the payment year to take steps to improve their quality. Any measure in the Inpatient Quality Reporting Program is considered to be on deck for inclusion in value-based purchasing," Lloyd says. She advises case managers to be aware of what measures are being tracked because they are likely to become part of value-based purchasing.
The goal of Medicare’s Value-based Purchasing Program is to reward hospitals for providing higher-quality care. Here’s how it works: For fiscal 2015, starting with admissions on or after Oct. 1, 2014, CMS will automatically deduct 1.5% of the Medicare base operating payment.
The program is budget-neutral so the total withheld from all hospitals will be distributed as incentive payments to hospitals that perform well. "Hospitals can earn back what was deducted and more. Those that score well can do really well," says Susan Wallace, MEd, RHIA, CCS, CDIP, CCDS, director of inpatient compliance for Administrative Consultant Services, a Shawnee, OK-based healthcare consulting firm.
In the value-based purchasing program, hospitals are given an achievement score and an improvement score, with the higher score used to determine whether hospitals will get a bonus and how much it will be, Wallace says. The achievement score compares the hospital’s scores during the performance period with the scores of all hospitals from the baseline period. The improvement score compares the hospital’s score in the performance period with the same hospital’s score during the baseline period.
For fiscal 2015, value-based purchasing includes four domains, 12 clinical processes of care measures, five outcomes domain measures, the eight Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey measures, and one efficiency measure. For fiscal 2015, the payment is based on the following ratios: HCAHPS 30%; processes of care 20%; outcomes 30%; and efficiency of care 20%. Efficiency of care makes up 25% of the scores in 2016.
CMS is expanding value-based purchasing each year, points out Deborah K. Hale, CCS, CCDS, president of Administrative Consultant Services. "The first year, hospitals were rated on processes of care and some patient satisfaction measures. In 2014, CMS added outcomes. The efficiency measure is an added slice of the pie," she says.
The program started in 2013 with a 1% reduction in Medicare base operating payments and will rise to 1.75% in fiscal 2016 and 2% in fiscal 2017, she adds.
"Value-based purchasing is not going away. Hospitals have to develop the mindset that this is the way it is and act accordingly," Hale says.
In the Value-based Purchasing Program, CMS is moving away from emphasizing process-of-care measures to an emphasis on outcomes measures, Lloyd points out. "Process measures will make up only 5% of value-based purchasing in 2017, down from 70% when the program started. Value-based purchasing is becoming less about whether the physician or nurse did certain things at the proper time and more about the care team being successful," she says.
For fiscal 2018, CMS has announced plans to add three care transition measures in the HCAHPS to the value-based purchasing program. They already are part of the Inpatient Quality Reporting Program, Lloyd says.
"These care transition measures are yet another example of the emphasis on care coordination and care transitions," Lloyd says.
CMS also has announced possible new episodes of care measures that may be added into the efficiency domain in future years. These six new measures include three medical episodes: kidney/urinary tract infection, cellulitis and gastrointestinal hemorrhage, and three surgical episodes: hip replacement/revision; knee replacement/revision; and lumbar spine fusion/refusion.
"This is a signal from CMS that they are continuing to emphasize efficiency measures that cross domains. This is always a place where case managers can play a role," she says.
