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Quality and Finance: The Stars Align

Explore the intersection of quality and finance in healthcare, including topics like pay for reporting, never events, hospital acquired conditions, and value-based purchasing.

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Quality and Finance: The Stars Align

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  1. 2010-2011 SC HFMA - Annual InstituteEmbassy Suites HotelColumbia, SCJuly 30, 2010 Quality and Finance: The Stars Align Jason Sanders, Budget and Reimbursement, Sisters of Charity Providence Karen Reeves, VP Quality Compliance and Risk Management, SCHA Barney Osborne, VP Finance, SCHA

  2. Institute of Medicine and AHRQ RHQDAPU and HCAHPS Pay for Reporting Never Events Hospital Acquired Conditions Quality and Finance: The Stars Align MS DRGs ARRA HITECH Meaningful Use Value Based Purchasing Bundling 30 Day Readmissions Medicaid HACs

  3. Quality or Finance

  4. Quality or Finance • The DRG and Case Management • Case management: clinical • Medical Records: clinical • Forced hospitals manage physicians • Counterbalance • Hospital’s risk: physician discharge • Value Based Purchasing • Hospitals manage physicians and hospital • Shared risk

  5. Before the math, a brief summary of VBP … just in case you haven’t heard

  6. A Brief History of Pay for Performance (P4P) • 1980s and 1990s • Increase in HMOs and managed care • Capitated payment models • Physician incentives based on financial performance • 2000-Present • Institute of Medicine reports • To Err is Human and Crossing the Quality Chasm • Rewarding provider Performance • Physician and hospital incentives based on clinical performance • Legislated changes • Pay for Reporting (2% penalty) • Senate and CMS models for value-based purchasing

  7. What are the simple rules for the 21st Century Healthcare System

  8. Never Events 1. Wrong Surgical or Other Invasive Procedure 2. Surgical or Other Invasive Procedure Performed on the Wrong Body Part 3. Surgical or Other Invasive Procedure Performed on the Wrong Patient Medicare will not cover hospitalizations and other services related to these non-covered procedures. All services provided in OR when an error occurs are considered related and therefore not covered. All providers in OR who could bill individually are not eligible for payment. All related services provided during same hospitalization are not covered. http://www.cms.gov/transmittals/downloads/R101NCD.pdf

  9. Hospital-Acquired Conditions • These are conditions that are: high cost/volume, resulting in higher paying DRG when present as a secondary diagnosis, and which could reasonably have been prevented • 1. Foreign Object Retained After Surgery • 2. Air Embolism • 3. Blood Incompatibility • 4. Pressure Ulcers (Stage III and IV) • 5. Falls and Trauma • (Fractures, Dislocations, Intracranial Injuries, Crushing Injuries, Burns, Electric Shock)

  10. Hospital-Acquired Conditions • 6. Manifestations of Poor Glycemic Control • (Diabetic Ketoacidosis, Nonketotic Hyperosmolar Coma, Hypoglycemic Coma, Secondary Diabetes with Ketoacidosis, Secondary Diabetes with Hyperosmolarity) • 7. Catheter-Associated Urinary Tract Infection (UTI) • 8. Vascular Catheter-Associated Infection • 9. Surgical Site Infection Following: • Coronary Artery Bypass Graft (CABG), Bariatric Surgery, Certain Orthopedic Procedures • 10. Deep Vein Thrombosis (DVT)/Pulmonary Embolism (PE) • Following total hip/knee replacement

  11. POA Indicator Descriptor • Y Indicates that the condition was present on admission. • W Affirms that the provider has determined based on data and clinical judgment that it is not possible to document when the onset of the condition occurred. • N Indicates that the condition was not present on admission. • U Indicates that the documentation is insufficient to determine if the condition was present at the time of admission. • 1 Signifies exemption from POA reporting. CMS established this code as a workaround to blank reporting on the electronic 4010A1. A list of exempt ICD-9-CM diagnosis codes is available in the ICD-9-CM Official Source: Federal Register

  12. CMS Example Baseline (829.45) Source: CMS’ Progress Toward Implementing Value-Based Purchasing: Lisa Graberth

  13. Payment Implications • More impact on accounts where the HAC was a CC/MCCs • More impact on accounts with few CC/MCCs • Heavier impact on small/rural facilities • Less impact on accounts with many other CC/MCCs • Impact on large facilities will increase as more CC/MCCs become HACs

  14. SC Example With Few MCC/CCs 28% Source: SC ORS

  15. SC Example With Many MCC/CCs Y Y Y No Impact Source: SC ORS

  16. Hypothetical With Many HACs $3,068.22

  17. Pay-for-ReportingQuality Measurements Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) and Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS)

  18. RHQDAPU: Heart Attack Hospital Compare 10/01/2008 to 09/30/2009

  19. RHQDAPU: Heart Attack Hospital Compare 10/01/2008 to 09/30/2009

  20. RHQDAPU: Heart Failure Hospital Compare 10/01/2008 to 09/30/2009

  21. RHQDAPU: Pneumonia Hospital Compare 10/01/2008 to 09/30/2009

  22. RHQDAPU: Surgical Care Hospital Compare 10/01/2008 to 09/30/2009

  23. RHQDAPU: Surgical Care Hospital Compare 10/01/2008 to 09/30/2009

  24. HCAHPS Hospital Compare 10/01/2008 to 09/30/2009

  25. HCAHPS Hospital Compare 10/01/2008 to 09/30/2009

  26. Full APU: August 15 Deadline! • As of July 27, 30% of hospitals had not submitted form indicating: • Registry participation (cardiac surgery, stroke, nursing sensitive measures) • Attestation of accuracy and completeness of quality data • 2% APU at risk; participation in registry not required, but form must be submitted through QNet Exchange

  27. New Measures and Changes (total = 46 for FY 2011 APU) • Participation in registries (stroke, cardiac surgery) • Re-admissions: 30-day readmissions for heart attack, heart failure and pneumonia. • Re-admission payment reductions start in 2013 and will apply to all Medicare discharges • Beginning in FY 2015, the Secretary is able to expand the list of conditions to include chronic obstructive pulmonary disorder and several cardiac and vascular surgical procedures, as well as any other condition or procedure the Secretary chooses. • 2015 Hospitals in top quartile for Hospital-acquired conditions will have payment reduction for all Medicare discharges. Will be posted to CMS Hospital Compare website before 2015. • Physician Quality Reporting System-$ incentive for reporting through 2014. Penalty of 1.5% in 2015, and 2% penalty in 2016.

  28. The Patient Protection and Affordable Care Act (PPAC)

  29. Health Care Reform Act 2013 Senate Committee Apr. 29, 2009, Page 4 Hospitals that meet or exceed performance standards would receive value-based “bonus” payments. The incentive payments would apply to all MS-DRGs under which a hospital provides services.

  30. PPAC 2010 • Support comparative effectiveness research by establishing a non-profit Patient-Centered Outcomes Research Institute. • Reauthorize and amend the Indian Health Care Improvement Act. BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

  31. PPAC 2011 • Prohibit federal payments to states for Medicaid services related to health care acquired conditions. • Develop a national quality improvement strategy that includes priorities to improve the delivery of health care services, patient health outcomes, and population health. • Prohibit federal payments to states for Medicaid services related to health care acquired conditions. BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

  32. PPAC 2011 • Rewards physicians for participation in the Physician Quality Reporting Initiative (PQRI). BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

  33. PPAC 2012 • Allow providers organized as accountable care organizations (ACOs) that voluntarily meet quality thresholds to share in the cost savings they achieve for the Medicare program. • Reduce Medicare payments that would otherwise be made to hospitals by specified percentages to account for excess (preventable) hospital readmissions. BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

  34. PPAC 2012 • Reduce annual market basket updates for home health agencies, skilled nursing facilities, hospices, and other Medicare providers. • Establish an acute hospital value-based purchasing program in Medicare on or after October 1, 2012. • The baseline data for the initial FFY 2013 calculation in 2013 is April 1, 2010 to March 31, 2011. • The measurement data for FFY 2013 calculations is April 1, 2011 to March 31, 2012. BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

  35. PPAC 2012 • Develop plans to implement value-based purchasing programs for skilled nursing facilities, home health agencies, and ambulatory surgical centers. • Establish VBP demonstration programs for CAHs and hospitals excluded from the VBP program because of insufficient volumes. BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

  36. PPAC 2012 • Develop plans to implement value-based purchasing programs for skilled nursing facilities, home health agencies, and ambulatory surgical centers. • Establish VBP demonstration programs for CAHs and hospitals excluded from the VBP program because of insufficient volumes. BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

  37. ARRA HITECH 2011-2015 • Meaningful Use • Ability to retrieve and accumulate new patient data electronically • ePrescriptions • Patient demo • Lab results • Patient conditions • Ability to communicate quality measures electronically • Additional Quality Measures BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

  38. South Carolina Medicaid • HACs structured by MS-DRG, SC Medicaid still codes by Medicare DRG codes. Since FFS pays per diem, current MMIS could not simply remove the HAC and recalculate the DRG. • Plan is for a third party to crosswalk the DRG to a MS-DRG, recalculate without the HAC and take a percent of total to the original total and apply that percentage to the per diem. • Mandatory MCOs will not completely solve the problem. MHNs remain FFS. BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

  39. 2013 Implementation • “Bonus” • 2% of annual Marketbasket Update set-aside to be earned back as a “reward”. • Budget Neutral

  40. Translating Performance Score into Incentive Payment: Example Full Incentive Earned Penalties Hospital A 57% performance 76% Reimbursement Percent Of VBP Incentive Payment Earned Hospital Performance Score: % Of Points Earned Source: CMS’ Progress Toward Implementing Value-Based Purchasing: Lisa Graberth 18

  41. Budget Neutrality Full Incentive Earned Translating Performance Score into Incentive Payment: Example Savings due to penalties No Bonuses ? Percent Of VBP Incentive Payment Earned Hospital Performance Score: % Of Points Earned Source: CMS’ Progress Toward Implementing Value-Based Purchasing: Lisa Graberth 18

  42. Budget Neutrality How will savings be distributed? • Reimburse above 100% to high ranking hospitals • Fund programs for underachieving hospitals • Fund CMS expansion of the VBC program • Other

  43. Madness to the Method VBP Math

  44. Actual Chart Extracted Data

  45. Scoring Base Period National Scores Base Period Hospital Scores for Improvement Comparisons Actual Scores for Period Score Calculated From Scoring Period Data If Score < 10, Scoring Period Improvement from Base Period Higher of Attainment or Improvement

  46. Case count < 100 is not computed Improvement does not apply once Attainment is maxed out at 19 Higher of Attainment or Improvement

  47. Attainment Score (Period Performance - Threshold) / (Benchmark-Threshold) x 10 The amount you exceeded the threshold compared to the amount the national benchmark exceeded the threshold

  48. Improvement Score (Period Performance – Base Period Performance) / (Benchmark-Threshold) x 10 The amount of your improvement from base compared to the amount the national benchmark exceeded the threshold

  49. Combining Clinical Process and HCAHPS Scoresfor a Total Performance Score The Proration: Source: CMS’ Progress Toward Implementing Value-Based Purchasing: Lisa Graberth 17

  50. Percentage recovery of 2% Withhold CMS Model

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