Value-Based Purchasing Raises the Stakes

The Hospitalist. 2011 May;2011(05):

May 1, 2011 | The Hospitalist

CMS intends to monitor and evaluate the program’s impact on access and quality of care, especially for “vulnerable populations,” the percentage of patients who receive appropriate care, the rates of hospital-acquired conditions, and the best practices of high-performing hospitals.

The complicated nature of the rules and scoring, and significant money attached to the competition, have generated deep concern. In October and again in February, healthcare providers bombarded CMS representatives with questions and suggestions during open phone forums, when the regulations were still in flux. Would the rules be fair? Would CMS provide an early warning of impending losses? Was the agency giving too much weight to patient satisfaction scores?

SHM supports the program, stating, “We believe that the Medicare reimbursement system must be changed to promote value, and we strongly support policies that link quality measurement to performance-based payment.”

Other observers, though, have warned of the potential for unintended consequences. If doctors avoid complicated medical cases in order to increase a hospital’s score, for example, are they really improving care? Will poorly performing hospitals get caught in a vicious circle due to declining financial resources?

Some critics have complained that by scoring on a curve rather than on an absolute point system, the value-based purchasing program might not be a quality initiative so much as an opportunity for CMS to reduce hospital payments. “I believe that this is largely a shell game played by the Centers for Medicare & Medicaid Services to give hospitals the idea that they can win at this game, when all but a few will lose,” wrote Richard Rohr, MD, FHM, in his Feb. 1 entry at the Medical Staff Leader blog (https://blogs.hcpro.com/medicalstaff/). Hospitalist subsidies could be a prime target as the cost-reduction pressures rise, wrote Dr. Rohr, who directs HM programs for Guthrie Healthcare System in Sayre, Pa. Enhancing productivity, he stressed, could be the best defense against a rollback in salaries.

Most experts agree that investing in a quality infrastructure will be essential for success, though other hospitalists differ on the potential effects that VBP might have on their profession. “I think a big part of a quality infrastructure is a hospital medicine program,” Dr. Torcson says. In fact, he recommends that hospitalists approach a hospital CFO or CEO and offer their assistance with the program. “I really think that’s the right direction and the right attitude, kind of the way the Samurai used to serve the Japanese emperor,” he explains.

A major reason for taking the initiative, he says, is that value-based purchasing could become the new business case for HM. In the 1990s, hospitalists could put a real number on how much they saved hospitals by reducing length of stay, sparking an investment in HM programs. “I think value-based purchasing is now in the same position,” Dr. Torcson says, “and the savings is actually going to be even more quantifiable for the hospital in terms of their success or failure.”

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Value-Based Purchasing: The Basics

Most hospitalists will be directly affected by the arrival of Medicare’s hospital value-based purchasing program. Here’s a primer on how the program will work.

For each of the 17 measures included under the Clinical Process of Care heading, CMS will use hospital data to calculate a performance score ranging from 0 to 10. A hospital earns an achievement score based on how well it did relative to a lower threshold and upper benchmark calculated from all hospitals’ previous baseline scores, and an improvement score based on whether it beat its own performance during the baseline period. CMS uses the higher of these two scores for its official tally. In theory, a hospital could receive all 10 points if it beats the achievement benchmark, or 0 if it fails to meet the achievement threshold or better its own previous score (see Figure 1, below).

For the eight measures based on Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) patient surveys, the scoring is roughly the same. Hospitals, however, also can earn up to 20 consistency points based on how well their single lowest score stacks up to the competition. For the fiscal year 2013 evaluation period, HCAHPS scores will count 30% toward the final score, while the Clinical Process of Care scores will be weighted 70% toward the score.

Hospitals will receive a percentage grade based on how many points they scored out of the possible total. A hospital that receives all 9s in the six measures for which it is eligible, for example, would score a 90%, the same score as a hospital that scores all 9s in the 15 measures for which it is eligible. CMS will post all scores on its Hospital Compare site (www.hospitalcompare.hhs.gov) and use the final performance score to determine the value-based incentive payment.

During each evaluation period, only hospitals with at least 10 cases for four or more applicable measures will receive a Clinical Process of Care score. Likewise, only hospitals that process at least 100 HCAHPS surveys will receive a Patient Experience of Care score. Smaller facilities that don’t meet those inclusion criteria will instead be enrolled in a demonstration project, but hospitals won’t be given special consideration based on patient demographics.