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Centers for Medicare & Medicaid Services Update Hospital Value Based Purchasing. Howard Shaps, MD, MBA Medical Director Health Care Excel August 7, 2013. Agenda. History Background Measures Past Present Future Conclusions and Questions. Core Measure. - PowerPoint PPT Presentation
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Centers for Medicare & Medicaid Services UpdateHospital Value Based Purchasing
Howard Shaps, MD, MBAMedical DirectorHealth Care ExcelAugust 7, 2013
Hospital Value Based Purchasing
Howard Shaps, MD MBA
Agenda• History
• Background
• Measures
• Past Present Future
• Conclusions and Questions
2
Hospital Value Based Purchasing
Howard Shaps, MD MBA
Core Measure
• An evidenced-based performance measure • The basic core measure principles
• Every patient with the given diagnosis….• Will receive the baseline (core) care • Scientific research
• Diagnosis• High volume• High cost • Increased rate of morbidity or mortality
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Hospital Value Based Purchasing
Howard Shaps, MD MBA
Quality Measures• Evidence based
• Measure or quantify • Healthcare processes• Outcomes• Patient perceptions• Organizational structure and/or systems
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Goal: Provide care that is…..
Effective Patient CenteredSafe EquitableEfficient Timely
Hospital Value Based Purchasing
Howard Shaps, MD MBA
Hospital Quality Initiative• 2003
• Goals and Objectives• National public reporting activities – Quality Measures
• Private and public purchasers of healthcare• Oversight and accrediting entities • Providers of hospital care
• Empower consumers• To make more informed decisions about their healthcare
• Encourage providers and clinicians • To improve the quality of healthcare
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Howard Shaps, MD MBA
Hospital Value Based Purchasing
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Hospital Value Based Purchasing
Howard Shaps, MD MBA
Hospital Compare• 2005• A Website developed to publicly report information:
• Valid • Credible• User-friendly
• 4,000 Medicare-certified Hospitals• Displays quality information
• Can help make decisions about where patients obtain health care• Encourages hospitals to improve the quality of care they provide
http://www.medicare.gov/hospitalcompare7
Hospital Value Based Purchasing
Howard Shaps, MD MBA
Hospital Quality Initiative: Data Sets
Clinical Data • Centers for Medicare & Medicaid Services (CMS) aligned with the National Quality
Forum (NQF)
• Evidence-based hospital quality measures
• Research and evidenced-based medicine affects:• Mortality and morbidity• Disability• Length of stay• Readmissions
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Howard Shaps, MD MBA
Hospital Value Based Purchasing
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Hospital Value Based Purchasing
Howard Shaps, MD MBA
Hospital Quality Initiative: Data Sets
Patient Perspectives
• CMS worked with the Agency for Healthcare Research and Quality (AHRQ) • Hospital-Consumer Assessment of Healthcare Provider and Systems (HCAHPS) survey
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Hospital Value Based Purchasing
Howard Shaps, MD MBA
Inpatient Quality Reporting (IQR) Program
• Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003
• Section 5001(a) of Pub. 109-171 of the Deficit Reduction Act (DRA) of 2005 • Requirements for the Hospital IQR program• Built on the Hospital Quality Initiative
• This section of the MMA authorized CMS to…• Pay hospitals that successfully report designated quality measures a higher annual update
to their payment rates as part of the Inpatient Prospective Payment System (IPPS)
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Hospital Value Based Purchasing
Howard Shaps, MD MBA
Inpatient Quality Reporting (IQR) Program
• Requires "sub-section (d)" hospitals to submit data for specific quality measures for health conditions common among people with Medicare
• Quality Measure Data found on Hospital Compare
• Targets consumers
• Encourage hospitals and clinicians• Improve the quality of inpatient care
• 2.0 percentage point reduction • If do not participate 12
Hospital Value Based Purchasing
Howard Shaps, MD MBA
CMS Payment Reduction Programs• Hospital Value Based Purchasing
• Hospital Readmission Reduction Program• Higher than expected readmission rates
• Lower payments
• Payment Adjustment for Hospital Acquired Conditions• Bottom quartile affected
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Howard Shaps, MD MBA
Hospital Value Based Purchasing
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FY 2013 FY 2014 FY 2015 FY 2016 FY 2017
Hospital Value Based Purchasing 1.00% 1.25% 1.50% 1.75% 2.00%
Hospital Readmission Reduction Program 1.00% 2.00% 3.00% ? ?
Hospital Acquired Conditions Adjustment 1.00% ? ?
Howard Shaps, MD MBA
Hospital Value Based Purchasing
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Hospital Value Based Purchasing
Howard Shaps, MD MBA
Hospital Value Based Purchasing
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Howard Shaps, MD MBA
Hospital Value Based Purchasing
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Howard Shaps, MD MBA
Hospital Value Based Purchasing
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Hospital Value Based Purchasing
Howard Shaps, MD MBA
Hospital Value-Based Purchasing Program • Hospital Inpatient Quality Reporting Program
• Authorized by Section 501(b) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003
• Affordable Care Act• Congress authorized the Hospital inpatient Value-Based Purchasing (VBP) program in Section
3001(a)
• Next step in promoting higher quality care for Medicare• Pays for care that rewards better value and patient outcome
• Instead of just volume of services
• Measures specified under the Hospital IQR Program• Results published on Hospital Compare for at least one year 19
Hospital Value Based Purchasing
Howard Shaps, MD MBA
Intentions• Promote better clinical outcomes for hospital patients• Improve patient’s experience of care during hospital stays
• Encourage hospitals to improve the quality and safety of care • Eliminating or reducing the occurrence of adverse events • Adopting evidence-based care standards and protocols• Re-engineering hospital processes
• Improve patients’ experience of care• Improve clinical outcomes
20
Hospital Value Based Purchasing
Howard Shaps, MD MBA
Concepts• Buyers should hold providers of health care accountable for both cost and quality of
care
• Value-based purchasing brings together• Information on the quality of health care
• Patient outcomes• Health status
• Data on the dollar outlays going towards health
• Managing the use of the health care system• Reduce inappropriate care• Identify and reward the best performing providers 21
Howard Shaps, MD MBA
Hospital Value Based Purchasing
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Hospital Value Based Purchasing
Howard Shaps, MD MBA
End Point• CMS is changing the way it pays hospitals
• Rewarding hospitals for the quality of care they provide to Medicare patients, not just the quantity of procedures they perform
• Hospitals are rewarded • How closely they follow best clinical practices – core or quality measures• How well hospitals enhance patients’ experiences of care• Patient outcomes
• When hospitals follow proven best practices, patients receive higher quality care and see better outcomes
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Howard Shaps, MD MBA
Hospital Value Based Purchasing
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Hospital Value Based Purchasing
Howard Shaps, MD MBA
Eligibility• How is “hospital” defined for this program?
• The Hospital VBP Program applies to subsection (d) hospitals: • Statutory definition of subsection (d) hospital found in Section 1886(d)(1)(B) of the Social
Security Act
• Hospitals in all 50 states, the District of Columbia• Acute Care Hospitals• Including Maryland
• More than 3,000 hospitals across the country are eligible to participate
25
Hospital Value Based Purchasing
Howard Shaps, MD MBA
Who is Excluded?• Exclusions Under Section 1886(o)(1)(C)(ii):
• Payment reductions under Hospital IQR Program• Excluded from the Inpatient Prospective Payment System (IPPS) • Deficiencies during the Performance Period that pose immediate jeopardy to the health or
safety of patients • Without the minimum number of cases, measures, or surveys in the performance period • Exemption from the Secretary of the Department of Health and Human Services (HHS)
• Maryland received a waiver for the FY 2013 Program Year
Hospitals excluded from the Hospital VBP Program will not be subject to the base operating DRG reduction for the applicable fiscal year
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Hospital Value Based Purchasing
Howard Shaps, MD MBA
Funding• Via regular fees Medicare pays hospitals through its Diagnosis-Related Group (DRG)
system
• DRG payments for each patient discharge across all hospitals reduced each year• Money will be used to fund incentive payments
• Roughly half of participating hospitals will receive a net increase in payments • The rest will receive a net decrease in payments
• Possible increases depend on the distribution of hospitals’ performance scores
Budget Neutral27
Hospital Value Based Purchasing
Howard Shaps, MD MBA
Base Operating DRG Percent Reduction
FY 2013 FY 2014 FY 2015 FY 2016 FY 20170
0.5
1
1.5
2
2.5
Perc
ent R
educ
tion
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Howard Shaps, MD MBA
Hospital Value Based Purchasing
So……
Where are we?
Where are we going?
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Hospital Value Based Purchasing
Howard Shaps, MD MBA
Key TermsDomainsMeasuresTime PeriodsPointsFloorsThresholdsBenchmarksPercentagesAchievementPerformance
Total Performance Score
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Howard Shaps, MD MBA
Hospital Value Based Purchasing
Fiscal Year 2013
Clinical Process of Care
70%
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Patient Experienceof Care
30%
Howard Shaps, MD MBA
Hospital Value Based Purchasing
Fiscal Year 2014
Outcome
Clinical Process of Care
Patient Experience of Care
25%
30%
45%
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Howard Shaps, MD MBA
Hospital Value Based Purchasing
Fiscal Year 2015
Patient Experience of Care
30%
Outcomes
30%
Efficiency
20%
Clinical Processof Care
20%
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Hospital Value Based Purchasing
Howard Shaps, MD MBA
Baseline Performance Data
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Howard Shaps, MD MBA
Hospital Value Based Purchasing
Baseline: April 1, 2010 to December 31, 2010
Fiscal Year 2014
Baseline and Performance Periods
Clinical Process of Care and Patient Experience of Care
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Outcome
Baseline: July 1, 2009 to June 30, 2010
Baseline: July 1, 2011 to June 30, 2012
Performance: April 1, 2012 to December 31, 2012
Howard Shaps, MD MBA
Hospital Value Based Purchasing
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Hospital Value Based Purchasing
Howard Shaps, MD MBA
Achievement Points
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• Achievement Points are awarded by comparing an INDIVIDUAL hospital’s rates during the Performance Period with ALL hospitals’ rates from the Baseline Period
• How are Achievement Points awarded? • Hospital rate at or above the Benchmark: 10 Achievement Points • Hospital rate less than the Achievement Threshold: 0 Achievement Points • If the rate is equal to or greater than the Achievement Threshold and less than the
Benchmark: 1-9 Achievement Points
Hospital Value Based Purchasing
Howard Shaps, MD MBA
Improvement Points• Improvement Points are awarded by comparing one hospital’s rates during the
Performance Period to that same hospital’s rates from the Baseline Period • How are Improvement Points awarded?
• Hospital rate at or above the Benchmark: 9 Improvement Points • Hospital rate less than or equal to Baseline Period Rate: 0 Improvement Points • If the hospital’s rate is between the Baseline Period Rate and the Benchmark: 0-9
Improvement Points
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Hospital Value Based Purchasing
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Eligible to earn between 0 to 20 possible points
Based on the hospital’s lowest dimension score in Performance PeriodRelative to the lowest performing hospital on this dimension (floor)
Consistency Points:How My Hospital Compares to the Floor
Hospital Value Based Purchasing
Howard Shaps, MD MBA
How are Hospitals Measured?• Points for Achievement and Improvement for each measure or dimension
• Greater number used
• Points are added across all measures to reach the Clinical Process of Care and Outcome domain scores
• Points are added across all dimensions and are added to the Consistency Points to reach the Patient Experience of Care domain score
• Fiscal Year 2014• 45% of Total Performance Score based on Clinical Process of Care measures • 25% of Total Performance Score based on Outcome measures• 30% of Total Performance Score based on Patient Experience of Care dimensions
Total Performance Score 41
Hospital Value Based Purchasing
Howard Shaps, MD MBA
Normalized• Occurs when the total number of cases for a measure was not met
• Total Performance Score is adjusted to account for missing measures
42
CMS will normalize a domain score by converting the hospital’s points earned to a percentage of possible points
Hospital Value Based Purchasing
Howard Shaps, MD MBA
Who is eligible in FY 2014?• Clinical Process of Care domain score
• If they have at least 10 cases for each of at least 4 applicable measures during the Performance Period
• Patient Experience of Care domain score• At least 100 completed Hospital Consumer Assessment Healthcare Providers and System
(HCAHPS) surveys during the Performance Period
• Outcome domain score• Need 10 cases in two of three measures to be scored
For FY 2014 providers must have had a score for all three domains to be eligible 43
Howard Shaps, MD MBA
Hospital Value Based Purchasing
Fisc
al Y
ear 2
014
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ear 2
014
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ear 2
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Reports and Calculations
Howard Shaps, MD MBA
Hospital Value Based Purchasing
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Hospital Value Based Purchasing
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Consistency Points Apply Here
Howard Shaps, MD MBA
Hospital Value Based Purchasing
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Value Based Multiplier Calculation
Howard Shaps, MD MBA
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Value Based Multiplier Calculation
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Hospital Value Based Purchasing
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Value Based Multiplier Calculation
Howard Shaps, MD MBA
Hospital Value Based Purchasing
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Value Based Multiplier Calculation
Howard Shaps, MD MBA
Hospital Value Based Purchasing
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Value Based Multiplier Calculation
Howard Shaps, MD MBA
Hospital Value Based Purchasing
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Value Based Multiplier Calculation
Howard Shaps, MD MBA
Hospital Value Based Purchasing
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Value Based Multiplier Calculation
Howard Shaps, MD MBA
Hospital Value Based Purchasing
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Hospital Value Based Purchasing
Howard Shaps, MD MBA
Value Based Multiplier Calculation
• Base operating DRG = $1,000,000
• Fiscal Year 2013 Base Operating DRG Payment Amount Reduction = $10,000
• Linear Exchange Function = 2.0
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Howard Shaps, MD MBA
Hospital Value Based Purchasing
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Now Pretend….
The Total Performance Score is 41
What happens?
Hospital Value Based Purchasing
Howard Shaps, MD MBA
Value Based Multiplier Calculation
Calculate the Hospital Value Based Incentive Payment Percentage
0.01 x 41/100 x 2.0 = .0082 or 0.82%
This number is less than 1.00%
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Hospital Value Based Purchasing
Howard Shaps, MD MBA
Value Based Multiplier Calculation
Calculate the hospital’s net percentage change in base operating DRG payment for each discharge……
0.0082% - 1.00% = - 0.18%
With this Total Performance Score……
-0.18 x 1,000,000 = -$1,80063
Hospital Value Based Purchasing
Howard Shaps, MD MBA
Value Based Multiplier Calculation
The hospital’s Value Based Multiplier….
1.00 + -0.18/100 = 0.9982
And each DRG payment will be multiplied against 0.9982 and thus
The hospital loses money
64
Howard Shaps, MD MBA
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Future…….
(Kind of)
Howard Shaps, MD MBA
Hospital Value Based Purchasing
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Fisc
al Y
ear 2
015
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Fisc
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015
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Fisc
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015
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Hospital Value Based Purchasing
Howard Shaps, MD MBA
Medicare Spending Per Beneficiary (MSPB)
• Assesses Medicare Part A and Part B payments • From three days prior to an inpatient hospital admission through 30 days after discharge• Price standardized and risk adjusted
• Numerator• Hospital’s average MSPB Amount
• Defined as the sum of standardized, risk-adjusted spending across all of a hospital’s eligible episodes divided by the number of episodes for that hospital
• Denominator• The median MSPB Amount across all hospitals
• CMS hopes to • Increase the transparency of care for consumers• Recognize hospitals that are involved in the provision of high-quality care at lower 70
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Hospital Value Based Purchasing
Howard Shaps, MD MBA
Future?• Acute Care Hospitals
• Methicillin resistant Staphylococcus aureus• Clostridium difficile• Adverse Drug Events• Imaging measures• Joint Replacement Surgeries• Electronic Health Records
• Non Acute Care Hospitals• Long-Term Care Hospitals• Critical Access Hospitals• Inpatient Rehabilitation Facilities
• Nursing homes
• Physician Practices
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Hospital Value Based Purchasing
Howard Shaps, MD MBA
Quality Improvement Organizations (QIOs)
• Intimate knowledge of CMS activities
• Assist providers• Inpatient Quality Reporting• Outpatient Quality Reporting• Hospital-Consumer Assessment of Healthcare Systems and Providers
• Educational Resources• Evidenced-Based
• Assist with Quality Improvement endeavors 73
Hospital Value Based Purchasing
Howard Shaps, MD MBA
Contact Information
Howard Shaps, MD, MBAMedical DirectorHealth Care Excel1941 Bishop Lane, Suite 400Louisville, Kentucky [email protected] x 2202
74
This material was prepared by Health Care Excel, the Medicare Quality Improvement Organization for Kentucky, under contract with the Centers for Medicare & Medicaid Services (CMS), an agency of the U.S. Department of Health and Human Services. The contents presented do not necessarily reflect CMS policy. Created on July 31 2013. 10SOW-KY-INDPAT-13-024