Value-based purchasing gives CMs chance to shine

OPPS final rule steps toward quality measures

The Centers for Medicare & Medicaid Services (CMS) took additional steps toward value-based purchasing and transparency in health care in the final rule for Medicare payment for outpatient services issued Nov. 1.

In the final rule for the Outpatient Prospective Payment System (OPPS), which takes effect Jan. 1, CMS also announced its intentions to tie outpatient payments to quality reporting in 2009 and announced additional measures on the inpatient side that hospitals must report beginning in fiscal 2008.

"All of these changes spring from the idea of value-based purchasing and transparency in health care. CMS believes that patients have the right to make an informed decision about their medical care and that they should have easy access to the data they need to make that decision," says Deborah Hale, CCS, president, of Administrative Consultant Services, LLC, a health care consulting firm based in Shawnee, OK.

Outpatient quality measures and additional inpatient measures make it more important than ever for the hospital to implement strategies that facilitate appropriate care in a timely manner and that ensure that what is done for the patients is documented. These responsibilities often are delegated to case managers, Hale says.

The federal Deficit Reduction Act of 2005 calls for additional quality measures to be added to the Hospital Quality Data Payment Update Program and requires CMS to develop a value-based purchasing program by 2009.

"We have been hearing a lot about quality measures and value-based purchasing on the inpatient side. Because of the rapid increase in the cost of outpatient services, CMS wants to move in that direction for outpatient services as well," Hale says.

CMS estimates that between 2005 and 2006, hospital expenditures increased by nearly 12% due mainly to growth in the volume and intensity of services and that expenditures under the OPPS in calendar year 2007 will be approximately 9.2% higher than the estimated expenditures for 2006.

"The final rule places a lot of focus on the increase in payments for outpatient services. Because those services are increasing so rapidly, CMS is taking a close look at quality and cost measures," Hale says.

"In this final rule, we are taking one more step toward rewarding hospitals for providing quality care, not just in the inpatient setting but also in the outpatient department. The steps we are adopting today are a major step in our efforts to improve health care quality and help beneficiaries make informed health care decisions," according to Leslie V. Norwalk, Esq., acting CMS administrator.

In the final rule for the OPPS, CMS announced its intention to tie the Outpatient Prospective Payment System payments to quality reporting beginning in 2009 based on data from calendar year 2008. Hospitals that fail to report the quality measures would receive the OPPS update minus two percentage points in 2009.

CMS has announced its intentions to develop a set of cost and quality measures specifically for outpatient services. In the meantime, the initial OPPS quality measures will be some of the same measures that hospitals already are tracking for inpatient care. The initial set of outpatient measures includes the inpatient core measures for pneumonia, congestive heart failure, and surgical antibiotics.

"Many of the measures that hospitals are reporting for the inpatient core measures are the same as procedures that patients receive on an outpatient basis, such as appropriate administration of medications in the emergency department and antibiotics to prevent complications following surgery. If the hospital is collecting data on the inpatient side, they often find that the actual compliance with the core measures begins in the inpatient setting," Hale says.

The outpatient data are likely to focus on patients that hospitals don't capture in their inpatient data collection, such as those with pneumonia or congestive heart failure who might have been admitted under observation status or treated in the emergency department and released.

CMS initially proposed making quality reporting effective as of Jan. 1, but changed the date to 2009 in the final rule, according to Hale.

"Some of the people who commented felt like it would be unfair to start basing reimbursement on quality measures without giving the hospital a chance to improve. CMS agreed to wait and use the 2008 data," Hale says.

At the same time it announced the final rule for outpatient reimbursement, CMS announced the expansion of hospital reporting of quality measure for inpatient care, beginning in fiscal 2008 with the addition of four patient satisfaction measures and three new measures from the Surgical Care Improvement Project (SCIP) related to the process of care for patients undergoing surgical procedures.

Hospitals must report data on four measures on the 27-item Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS), a survey instrument developed jointly by the Agency for Healthcare Research and Quality (AHRQ) and CMS.

The four measures, which measure patient perception of the care they received during an inpatient stay are:

  • communication with doctors and nurses;
  • responsiveness of staff;
  • pain management;
  • discharge information.

For the first time, in fiscal year 2008, hospitals will be required to report risk-adjusted outcomes measures to receive the full payment update. These include 30-day mortality rate measures for patients hospitalized with acute myocardial infarction or heart failure and following surgery.

"While hospitals can't control things that happen after discharge, a high mortality rate might be an indication that the patient was sent home too soon, or it could be related to quality of care or adequate documentation to reflect the severity of illness," Hale says.

CMS made no significant changes to the payments for patients who are treated in observation status, although the MedPAC subcommittee had suggested adding syncope and dehydration to the list of diagnoses that qualify for observation status, Hale says. Chest pain, congestive heart failure, and asthma remain the only diagnoses that qualify for separate observation payments. Observation payments for other diagnoses are packaged into the payment for the emergency department or surgical procedure.

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