New Payment Models Bring New Healthcare Data Measurement Requirements

June 30, 2015

The BDO Center for Healthcare Excellence & Innovation and Rivkin Radler explore the rise of quality data as a reimbursement benchmark in this three-part series. Future newsletters will delve into the implications for measurement strategies and compliance.

Quality data is moving to the forefront of healthcare as a critical element of value and will serve as the basis for reimbursement made by government payers. This can be clearly seen in new population health management models for healthcare delivery, including Accountable Care Organizations (ACOs) and Delivery System Reform Incentive Payment (DSRIP) programs now being implemented across the country. Moreover, various government-sponsored initiatives will reward the quality, and not just the volume, of healthcare. This shift, in turn, places increased importance on measures to assess accurate measurement of quality reporting.

Rewarding the Shift from Volume to Value

A principal method to improve quality outcomes and reduce healthcare costs involves changing the ways in which providers are paid to reward positive outcomes and coordinated care strategies, not service volume and its attendant inefficiencies. The government’s goal is to have 30 percent of Medicare payments into alternative payment models as described in categories 3 and 4 of the chart on the next page by the end of 2016. By 2018, the aim is to have 50 percent in categories 3 and 4, and 90 percent of all fee-for-service payments in value-based purchasing models (categories 2, 3 and 4).

There are several models that align and incent quality and outcomes with reimbursement.

Examples of Value-Based Payment Models

Accountable Care Organizations: ACOs are voluntary groups of physicians, hospitals and other providers who coordinate their services with the goal of improving care delivery for Medicare beneficiaries. When an ACO succeeds in delivering high-quality, cost-efficient care, it can share in the savings achieved for Medicare. Accordingly, the ACO model emphasizes accurate reporting of data related to quality. Performance benchmarks on quality are phased in over an ACO’s second and third performance years. There are 33 quality measures, scored as 26 individual measures and 2 composite measures, with the 33 quality measures covering patient/caregiver experience, care coordination/patient safety, preventive health and at-risk populations.

Delivery System Reform Incentive Payment: The DSRIP program is another value-based healthcare model being used in some parts of the country. In New York State, the DSRIP program is intended to foster integrated, collaborative healthcare delivery and transformational system reforms with the goal of reducing avoidable hospital use by 25 percent over five years. DSRIP payments are rewarded based upon the achievement of DSRIP project milestones, supported with quality data reporting submitted to the New York Department of Health.
Examples of Program Initiatives that Incent Quality

Hospital Value-Based Purchasing Program: Medicare payments for inpatient acute care are tied, in part, to the hospital’s performance on certain quality measures in four domains:  (1) clinical process of care; (2) patient experience of care; (3) outcome; and (4) efficiency.  Medicare payments of participating hospitals are reduced by a certain percentage and then the total amount of those payment reductions are used to fund value-based incentive payments to hospitals based on performance. For 2015, the Centers for Medicare & Medicaid Services (CMS) increased the portion of Medicare payments available to fund value-based incentives under the program from 1.25 percent to 1.50 percent of the base operating Diagnosis-Related Group payment amounts to all participating hospitals.

Hospital Readmissions Reduction Program: This program encourages patient safety and care quality by reducing Medicare payments to hospitals with excess readmissions. The readmissions measures used are endorsed by the National Quality Forum. For 2015, excess readmissions could result in a hospital’s payments being reduced by up to 3 percent of base discharge amounts.

Hospital-Acquired Condition Reduction Program: Under this program, hospitals that rank in the worst-performing quartile in respect to hospital-acquired conditions (HACs) receive lower Medicare reimbursements. The quality metrics used to evaluate hospitals are central-line-associated bloodstream infections, catheter-associated urinary tract infections and the patient safety indicator 90 composite, a collection of eight quality measures including blood clots, pressure ulcers, hip fractures and infections. As reported in Kaiser Health News in December, CMS cut Medicare payments totaling approximately $373 million, and 721 hospitals were impacted. This amounted to a 1 percent reduction over the course of the fiscal year ending in September 2015.

End-Stage Renal Disease (ESRD) Quality Incentive Program: This program also reduces Medicare payments should quality measures slip. The quality measures, which are counted for a half-million Medicare beneficiaries with ESRD, relate to anemia management, dialysis and iron management adequacy, bone mineral metabolism, vascular access, and patient satisfaction. Facilities can lose up to 2 percent of Medicare payments in the applicable payment year if their quality measurements are too low.

The evolution of the healthcare payment model from a fee-for-service system that rewards increased volume of patients, services and procedures to a quality-based system that rewards improved healthcare delivery and patient outcomes is profound in its implications. In subsequent articles, we will address how this change in healthcare reimbursement affects the ways in which providers need to address operational compliance around quality data reporting, as well as the compliance ramifications of quality reporting errors.

Source: Centers for Medicare & Medicaid Services

Reprinted with permission from BDO.  All rights reserved.

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