Maryland's  Experience  of  Merging  Quality  

with  Reimbursement  

Dianne  Feeney,  Associate  Director,  Quality  IniAaAves  Sule  Calikoglu,  Associate  Director,  Performance  Measurement  Maryland  Health  Services  Cost  Review  Commission  

Fragmented  US  Financing  System  But  Maryland’s  System  Harmonizes  Payments  to  Hospitals  

 

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Public Payer 1

US Healthcare System

Private Payer 1

Private Payer 2

H

Maryland HSCRC Responsible for establishing Uniform All-Payer payment

levels and approved revenue Allocations based on

Reasonable relative resource Use by service and by

facility

Fragmented Payment System Creates many problems in the US and contributes to our country’s Fragmented and disjointed care delivery system

H H H H H H H

Public Payer 2

Pluralistic (fragmented) Financing System

All-Payer Unit Rates

Health  Services  Cost  Review  Commission  •  Origins  

–  Hospitals  needed  a  mechanism  to  financing  Uncompensated  Care  –  Business  (trustees)  wanted  a  way  to  contain  costs  (abandon  cost-­‐

based  payment)  –  Maryland  Hospital  AssociaCon  strongly  supported  legislaCon  

•  Enabling  LegislaAon  1971  –  Enabling  statute  –  very  broad  authority  and  language    –  Created  a  poliCcally/legally  independent  agency  (“HSCRC”  or  

“Commission”)  –  Unique  governance  structure    -­‐  7  volunteer  Commissioners  –  Small  experienced  staff  28  FTEs  (core  analyCc  staff  of  10-­‐12)  

•  JurisdicAon  –  InpaCent  and  outpaCent  hospital  services  (no  Part  B)  –  46  Acute  Care  Hospitals  -­‐  $14.5  billion  in  revenue  

Commission  Statute  •  Broad  powers  -­‐  data  collecCon  &  to  set  hospital  payment  levels  

(“rate  se[ng”)  •  Statute  arCculated  economic  principles  to  apply  

–  ProspecCve  rates  –  Prices  must  reflect  costs  (efficient  markets)  –  Fairness  in  pricing  (no  undue  discriminaCon/preference)  

•  Otherwise  no  detailed  rate  methods  in  statute  •  Specified  six  primary  policy  goals:    

–  Efficiency  (cost  containment)  –  Access  –  Equity  &  Fairness    –  Accountability  –  Financial  Stability/Sustainability    –  EffecCveness  (quality)  

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HSCRC  Payment  System  •  Originally  –  a  Unit  Rate  (Fee-­‐for-­‐service)  payment  system    •  HSCRC  constrained  unit  rate  growth  year  to  year  •  IncenCvized  increase  in  volume  •  HSCRC  retained  the  Unit  Rate  Payment  system  (great  

calibraCon  system)  but  imposed  a  DRG  constraint  (or  virtual  DRG  budget)  for  each  paCent  

•  PaCent  sCll  charged  their  itemized  bill  •  Hospital  held  to  this  per  case  budget  or  an  overall  weighted  

charge  per  case  budget  (all  rolled  up)  •  Same  incenCves  as  Medicare  per  case  system  (IPPS)  •  HSCRC  now  building  larger  payment  episodes      

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Maryland  Payment  System  Fundamentals    •  Uniform    data  reporCng  system  (data  is  key)  

–  Commission’s  system  for  cost  reporCng  (prescribed  reporAng  format)  –  Methods  for  reporCng/allocaCng  costs  to  “funcConal”  departments  

•  Uniform  data  collecCon    –  Cost  Reports  (detailed  direct/indirect  cost  &  volume  data)  –  Detailed  paCent  level  data  (administraAve  or  case  mix/claims  data)  –  Other  (wage/salary  survey  data;  trustee  disclosure  data)    

•  Data  analysis;  review  variaCons  in  costs  •  Establish  approved  base  costs  and  rates  (apply  standards  of  

“reasonableness”)  •  Update  base  rates  annually  •  Perform  compliance  checks  for  data  submifed  and  rates  charged  

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“Bending  the  Cost  Curve”  •  Lowest  Rate  of  Cost  Growth  of  any  State  1976-­‐2010  

•  1976:  Maryland  Cost  per  case  was  25%  ABOVE  the  US  average  •  2010:  Maryland  Hospital  cost  per  case  3%  BELOW  the  US  average  (1)  •  EsCmated  $46  billion  savings  to  the  State  over  the  period  1976-­‐2010  

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0.001.002.003.004.005.006.007.008.009.00

76 80 84 88 92 96 '00 '04

US  hospital  cost  growth    

Maryland  hospital  slower  cost  growth  

Growth  in  Hospital  Costs  per  case  (MD  vs.  US)  

•        Had  the  US  grown  at  the  slower  Maryland  rate  of  growth  –  hospital  spending  would  have                      been  $2.0  trillion  lower  

Note  (1):  Medpac  idenCfied  a  “most  efficient”  cohort  of  hospitals  naConally  with  high  quality  scores  –  that  are  9-­‐11%  below  average  US  cost  per  adjusted  admission  

Indexed    Rate  of    Growth  

•        Caveat:  savings  is  “Per  Case”                        

Summary  of  Key  Benefits  of  this  System  •  System  of  raConal  prices  that  relate  to  actual  costs  •  ProspecCve  pricing  –  befer  incenCves  &  allow  for  predictability  •  Uncompensated  care  &  teaching  costs  covered  (social  mission)  •  Emphasis  on  rate  compliance  and  DRG  target  compliance  •  Otherwise  free  to  allocate  resources  and  make  management  

decisions  as  they  see  fit  •  HMOs  can  manage  uClizaCon  (aligned  incenCve  with  hospital)  •  High  level  of  transparency  and  public  accountability  –  prices  all  

known,  DRG  payments  known,  costs  by  hospital  known  •  Data  used  most  by  hospitals  themselves  •  Controlled  per  case  cost  growth  and  met  other  policy  goals  

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Quality  IniCaCves  Linked  to  Payment  •  Phase  I:  Quality-­‐Based  Reimbursement  (QBR)  

–  Hospital  Quality  Alliance  (HQA)/Joint  Commission/CMS  Clinical  Care  process  measures  for:  heart  afack,  heart  failure  ,  pneumonia,  surgical  care  improvement  program,  childhood  asthma  care,  global  immunizaCons  

–  PaCent  Experience  of  Care  (HCAHPS)  

•  Phase  II:  Maryland  Hospital  Acquired  CondiCons  (MHAC)  •  ~50  PotenCally  Preventable  ComplicaCon  Categories  

•  Phase  III:  Admission  Readmission  Revenue  Program  (ARR)  

       

Process:  Quality  Based    Reimbursement  (QBR)  

QBR  Performance  Measurement  -­‐Implemented  in  2008  -­‐.05%  hospital  inpaAent  revenue    “at  risk”    -­‐CLINICAL  SCORE-­‐  Chart    abstracted  clinical  data  •  Opportunity  Score  

–  Percent  of  paCents  receiving  each  core  measure  

•  Appropriateness  Score  (removed  for  FY  2015  Payment)  –  Percent  of  paCents  in  each  domain  

receiving  ALL  indicated  care  (Perfect  Care)  

-­‐Hospital  Consumer  Assessment  of  Healthcare  Providers  and  Systems  (HCAHPS)-­‐  Pa:ent  survey  data  •  Performance  Score  

–  Percent  of  top  box  answers  (always)  for  each  dimension  

•  Consistency  Score  –  Measure  whether  hospitals  are  

meeCng  the  achievement  thresholds  across  the  eight  proposed  HCAHPS  dimensions  

 -­‐MORTALITY  (New  for  FY  2015  Payment)-­‐  Administra:ve/claims  data  

QBR  MEASURES  AND    DOMAINS  

CLINICAL PROCESS MEASURES – FY2014/ FY2015 AMI-1 Aspirin at Arrival AMI-2 Aspirin prescribed at discharge AMI-3 ACEI or ARB for LVSD AMI-5 Beta blocker prescribed at discharge AMI-8a - Primary PCI Recvd. Within 90 Min. of Arrival CAC-1a - Relievers for Inpatient Asthma (age 2 through 17 years) CAC-2a - Systemic Corticosteroids for Inpatient Asthma (age 2-17) CAC-3 Home Management Plan of Care (HMPC) to Patient HF-1 Discharge instructions HF-2 Left ventricular systolic function (LVSF) assessment HF-3 ACEI or ARB for LVSD PN -3b Blood culture before first antibiotic – Pneumonia PN-6 Initial Antibiotic Selection for CAP SCIP CARD -2 Surgery Patients on Beta-Blocker Therapy Prior to Admission Who Received a Beta-Blocker During the Perioperative Period SCIP INF 1- Antibiotic given within 1 hour prior to incision SCIP INF-2 Antibiotic selection for surgery SCIP INF-3 Antibiotic discontinuance within appropriate time period postop. SCIP INF-4 Cardiac Surgery Patients with Controlled 6 A.M. Postoperative Serum Glucose SCIP INF6- Surgery Patients with Appropriate Hair Removal SCIP VTE-1 Surgery Patients with Recommended VTE Prophylaxis Ordered SCIP VTE-2 Surgery Patients with Recommended VTE Prophylaxis Given SCIP INF-9 Urinary Catheter removed Days 1 or 2 postop (new 2015) IMM-1a Pneumococcal Vaccination (new 2015) IMM-2 Influenza Vaccination (new 2015)

HCAHPS DIMENSIONS- FY 2014/FY2015

Cleanliness and Quietness of Hospital Envr Communication About Medicines (Q16-Q17) Communication With Doctors (Q5-Q7) Communication With Nurses (Q1-Q3) Discharge Information (Q19-Q20) Overall Rating of this Hospital Pain Management (Q13-Q14) Responsiveness of Hospital Staff (Q4,Q11)

FY  2014  

Clinical  70%  

HACHPS    30%  

MORTALITY-FY 2015

3M

Risk of Mortality

Rate

Clinical  40%  

HCAHPS  50%  

Mortality  10%  

FY  2015  

QBR  Results  for  FY2013  Total  Amount  Redistributed=$7.9  million    

HOSPITAL NAME QBR FINAL

SCORE

Penalty/Reward as % of Total

Inpatient Revenue

Penalty/Reward in $

Southern Maryland Hospital Center 0.4096 -0.50% -$730,413 Greater Baltimore Medical Center 0.4099 -0.50% -$1,043,091 Prince Georges Hospital Center 0.4106 -0.50% -$874,760 Sinai Hospital 0.4338 -0.45% -$1,644,016 Atlantic General Hospital 0.4638 -0.39% -$138,255 .. .. .. .. .. .. .. .. .. .. .. .. Dorchester General Hospital 0.8005 0.28% $106,058 Baltimore Washington Medical Center 0.83 0.34% $643,512 Maryland General Hospital 0.8301 0.34% $408,057 St. Mary's Hospital 0.905 0.49% $265,070 McCready Memorial Hospital 0.923 0.52% $27,012

       

Outcomes:  Maryland  Hospital    Acquired  Condi:ons(MHACs)  

Maryland  Hospital  Acquired  CondiCons  (MHAC)  IniCaCve  Overview  

•  Implemented  in  July  2009    •  Uses  PotenCally  Preventable  ComplicaCons  product  developed  by  3M  HIS  to  

measure  complicaCon  rates    •  PPCs  are  defined  as  harmful  events  (accidental  laceraCon  during  a  

procedure)  or  negaCve  outcomes  (hospital  acquired  pneumonia)  that  may  result  from  the  process  of  care  and  treatment  rather  than  from  a  natural  progression  of  underlying  disease.  

•  Relies  on  Present  on  Admission  Indicators  (POA)  for  secondary  diagnoses  in  administraAve/claims  data    

•  2%  inpaCent  hospital  revenue  at  risk  for  2014,  increased  to  3%  for  FY  2015  (2%  achievement  and  1%  improvement)  

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Example  MHACs  •  PPC5  –  Pneumonia  and  Other  Lung  InfecCons  •  PPC6  –  AspiraCon  Pneumonia  •  PPC16  –  Venous  Thrombosis  •  PPC24  –  Renal  Failure  without  Dialysis  •  PPC35  –  SepCcemia  and  Severe  InfecCons  

MHAC  Results    � In  FY2013  Total  Amount  Redistributed=$16.7    million  with  2%  maximum  reducCon  and  1.2%  reward  for  hospitals.  

� ComplicaCon  rates  declined  by  20%  in  the  first  two  years  of  the  program.    

� EsCmated  total  cost  savings  due  to  reducCons  in  complicaCon  rates  in  the  iniCal  two  years  were  $105.4  million.  

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Readmissions:    Admission  Readmission  Revenue    

Admission  Readmission  Revenue  (ARR)  

– Began  FY  2012  – 31  hospitals  – Same  hospital  all-­‐cause  30  day  readmissions-­‐  episode-­‐based  payment  that  covers  both  the  iniCal  admission  and  any  subsequent  re-­‐admission  

ARR  Structure      

 

 

 

Acute  HospitalizaCon  

DRG  pmt  

Readmission  1   Readmission  2  

DRG  pmt   DRG  pmt  

Each  paid  separately  under  old  system  -­‐  More  payment  for  more  volume  

“DRG”  payment  amount  or  “weight”  covers  both  the  iniCal  admission  and  ALL  subsequent  re-­‐admissions-­‐  hospital  keeps  savings  for  elimina:ng  readmissions    

HSCRC  establishes    an  expanded  Episode  

Bundle  

$10,000   $9,000   $6,000  

30  day  “window”  

ARR  vs.  CMS  Readmission  Policy  •  ARR  

–  Bundling  of  payments  based  on  payment  weights  

–  Keep  the  savings  from  reduced  readmissions  based  on  historical  performance  

–  Seed-­‐funding  for  iniCal  year    –  Inclusive-­‐all  condiCons,  few  

exempCons    –  Case-­‐mix  adjusted  

•  CMS  –  Ranking  of  performance  

compared  to  the  naCon  –  PenalCes  for  the  worse  

performers  (1%  penalty  for  the  first  year)  

–  3  condiCons  (AMI,  HF,  PN)  –  Risk  Adjustment  using  

historical  informaCon  

30-­‐Day  All-­‐Cause  Readmission  Rates  Maryland  vs.  US-­‐  Medicare  

FY  2010  Readmission  Rates   MD   US  Readmission  per  1,000  Medicare  FFS  Beneficiaries   18.94   14.45  Readmission  as  a  %  of  Total  Discharges   21.2%   18.5%  Same-­‐Hospital  Readmission  as  a  %  of  Total  Discharges   15.4%   Not  Available  

Source:  Delmarva  FoundaCon,  Analysis  of  Medicare  Claims  

 Trends  in  30-­‐Day  All-­‐Cause  Same-­‐Hospital  Readmission  Rates-­‐  HSCRC    

as  Percent  of  Discharges    

9.8%   9.8%   9.9%   9.8%   9.6%   9.7%   9.9%   9.7%   9.5%   9.7%   9.6%   9.4%   9.5%  

9.6%  10.4%  10.7%  10.5%  

11.0%  11.1%  11.5%  11.1%  10.7%  10.9%  11.1%  10.8%  10.7%  

13.9%  14.0%  14.0%  13.8%  13.3%  13.7%  

14.0%  13.8%  13.3%  13.3%  13.5%  13.2%  13.3%  

0.00%  

2.00%  

4.00%  

6.00%  

8.00%  

10.00%  

12.00%  

14.00%  

16.00%  

Q2   Q3   Q4   Q1   Q2   Q3   Q4   Q1   Q2   Q3   Q4   Q1   Q2  

FY2009   FY2010   FY2011   FY2012  

All-­‐Payer  

Medicaid  

Medicare  

Source:  HSCRC  InpaAent  Discharge  Database  based  on  ARR  technical  specificaAons  

Maryland  Readmission  Rates  ConCnue  to  Decline    in  More  Recent  Quarters  

Source:  HSCRC  InpaCent  Discharge  Database  

9.8%   9.8%  

9.9%  9.9%  

9.6%  

9.7%  

9.9%  

9.8%  

9.6%  

9.7%  9.6%  

9.4%  9.5%  

9.3%   9.2%  

8.9%  

8.4%  

8.6%  

8.8%  

9.0%  

9.2%  

9.4%  

9.6%  

9.8%  

10.0%  

10.2%  

2   3   4   1   2   3   4   1   2   3   4   1   2   3   4   1  

FY2009   FY2010   FY2011   FY2012   FY2013  

Trends  in  30-­‐Day  All-­‐Cause  Same-­‐Hospital    Readmissions  as    %  of  Total  Discharges  in  Maryland  

Includes  0-­‐1  Day  stays.  Rates  are  not  risk  adjusted  

Value  Index  –  Cost  per  Case  &  ComplicaAons  

25  

-12.00%

-10.00%

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

-4.00% -2.00% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00%

Rea

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Low  cost  -­‐  higher  quality  hospitals  

High  cost  

Low  cost  

High  Quality  

Lower  Quality  High  rate  of    complicaCons      

Moving  Forward  •  Expanding  to  inter-­‐hospital  readmissions  •  ReporCng  and  monitoring  expansion  •  Medicare  waiver  modernizaCon  

– Gain  sharing  with  other  providers  – Bundled  payments  – PopulaCon-­‐based  rates