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Value-Based Purchasing & Payment Reform –
How Will It Affect You?
HFAP Webinar September 21, 2012
Nell Buhlman, MBA
VP, Product Strategy
Click to view recording.
2
Payment Reform Landscape
Current & future
Hospital exposure under payment reform
Value-based Purchasing
How are hospitals doing?
Strategies for Success Under Payment Reform
Taking an integrated approach
The methodology is your friend (really)
Using the methodology to prioritize improvement opportunities
© 2012 Press Ganey Associates, Inc.
Agenda
3 © 2012 Press Ganey Associates, Inc.
The Impact and Challenge of Ever-Increasing Initiatives
2010 2011 2012 2013 2014 2015 2016 2017
Readmissions
Hospital Acquired Conditions
Meaningful Use
Value-based Purchasing (VBP)
Inpatient Quality Reporting Requirement (IQR, formerly RHQDAPU)
Hospital Acquired Conditions (HAC)
VBP VBP
Meaningful Use
2% of APU
2%
1%
1%
3%
Medicare Payment at Risk Under CMS Quality-based Payment Reform Initiatives
4
Fluid scope
Expanding area of interest
Removal of topped-out measures
Shared measures
Limited pool from which to draw
Double jeopardy for poor performers
Thresholds and benchmarks set extremely high
Rising over time as performance improves across the board
© 2012 Press Ganey Associates, Inc.
Challenges Common to all the Reform Initiatives
5 © 2012 Press Ganey Associates, Inc.
Inpatient Quality Reporting Initiative (IQR)
Incentive / Penalty 2% of Annual Payment Update (Pay for Reporting)
Measurement Areas of
Interest
Clinical Chart-abstracted
Measures (“Core Measures”)
AMI
Heart Failure
Pneumonia
Surgery
ED
Immunizations
VTE
Stroke
Patient Experience HCAHPS
Structural Measures Registry participation
Claims-based Measures
Mortality
Readmissions
AHRQ composite measures
Considerations List of included measures changes from year to year.
Data must be on time, complete and accurate to avoid penalty.
6
Value-based Purchasing (VBP)
Incentive / Penalty 1% of Base DRG operating payment in FY13, rising to 2% in FY17
Measurement Areas
of Interest
FFY 2013
Core Measures
Patient Experience
AMI, HF, PN, SCIP
HCAHPS
FFY 2014
Core Measures
HCAHPS
Outcomes
(Largely unchanged)
(Unchanged)
30d risk- adjusted mortality AMI, HF, PN
FFY 2015
(proposed)
Core Measures
Patient Experience
Outcomes
Efficiency of Care
(Largely unchanged)
(Unchanged)
Adding AHRQ PSI composite and CLABSI
Average spending per M/care Beneficiary
FFY 2016
(proposed)
Clinical Care
Person & Caregiver Experience & Outcomes
Safety
Efficiency & Cost Reduction
Care Coordination
Community/Population Health
Considerations
Domain weighting for score calculation changes as new domains added
Measures within domains subject to change (additions, deletions)
Proposal for FY16 is a realignment of all measures
7 © 2012 Press Ganey Associates, Inc.
HCAHPS in VBP: Relatively Greater Going Forward
Core
Measures
70%
HCAHPS
30%
Core
Measures
45%
HCAHPS
30% Outcomes
25%
Efficiency
20%
Core
Measures
20%
Outcomes
30%
HCAHPS
30%
2013
2014
2015
8 © 2012 Press Ganey Associates, Inc.
Readmissions Reduction Initiative
Incentive / Penalty Capped at 1% of base DRG operating payment in FFY 2013, 2% in FFY
2014, and 3% in FFY 2015
Measurement
Areas of Interest
FFY 2013 Excess readmissions for AMI, HF, PN
FFY 2015
Adding Chronic Obstructive Pulmonary Disorder
Several cardiac and vascular surgical procedures
“Other conditions or procedures the Secretary chooses”
Considerations
Future measures require exclusions for certain types of readmissions (e.g.,
readmissions unrelated to original admission), but current measures are all
cause
CMS will compare observed rates to expected rates to determine:
1) number of excess readmissions and 2) excess payments associated with
excess readmissions. Regardless of amount of excess payments
associated with excess readmissions, penalty cannot exceed the stated
cap for the FFY.
9 © 2012 Press Ganey Associates, Inc.
Focus: Excess costs associated with excess readmission
10
Hospital Acquired Conditions
Incentive/Penalty
Currently: Non-payment for specified HACs
FFY 2015: 1% reduction of base DRG operating payment for hospitals in the
top quartile of HAC occurrence
Measurement
Areas of Interest
Foreign Object Retained After Surgery
Air Embolism
Blood Incompatibility
Stage III and IV Pressure Ulcers
Falls and Trauma
Manifestations of Poor Glycemic Control
Catheter-Associated Urinary Tract Infection
Vascular Catheter-Associated Infection
Surgical Site Infection Following specified surgical procedures
Deep Vein Thrombosis (DVT)/Pulmonary Embolism (PE) following certain
orthopedic procedures
Considerations
List of conditions likely to change (additions and deletions)
Composite score calculation (weighting) not yet determined
There is always a top quartile!
© 2012 Press Ganey Associates, Inc.
11 © 2012 Press Ganey Associates, Inc.
Meaningful Use
Incentive / Penalty Currently: Incentive payments and grants available for early adopters
FFY 2015: Initially a portion of APU at risk, eventually entire APU at risk
Measurement
Areas of Interest
Established by HITECH provision of ARRA, requires hospitals to use certified
EHR technology:
In a meaningful manner (e.g., e-prescribing)
For electronic exchange of health information to improve quality of care
To submit clinical quality measures and other such data as required by the
Secretary
Three stages of criteria. Progressively complex/stringent
Considerations Increasing number of quality measures over time.
EHRs can be certified as “full EHRs” with providing all the necessary data
elements for quality measures submission
12 © 2012 Press Ganey Associates, Inc.
Example of Potential Hospital Impact
Dollars subject to Medicare P4P programs at a
146-bed hospital in Florida
% $ % $ % $ % $ % $
VBP 1 $ 210,054 1.25 $ 262,568 1.5 $ 315,081 1.75 $ 367,595 2 $ 420,108
Readmits 1 $ 210,054 2 $ 420,108 3 $ 630,162 3 $ 630,162 3 $ 630,162
HAC 1 $ 210,054 1 $ 210,054 1 $ 210,054
MU 1 $ 210,054 1 $ 210,054 1 $ 210,054
Sum 2 $ 420,108 3.25 $ 682,676 6.5 $ 1,365,351 6.75 $ 1,417,865 7 $ 1,470,378
5yr Total $ 5,356,377
FFY13 FFY14 FFY15 FFY16 FFY17
Using MedPar 2010 data
13 © 2012 Press Ganey Associates, Inc.
Example of Potential Hospital Impact
Dollars subject to Medicare P4P programs
at a 550-bed hospital in Kansas
Using MedPar 2010 data
% $ % $ % $ % $ % $
VBP 1 $ 668,940 1.25 $ 836,175 1.5 $ 1,003,410 1.75 $ 1,170,645 2 $ 1,337,880
Readmits 1 $ 668,940 2 $ 1,337,880 3 $ 2,006,820 3 $ 2,006,820 3 $ 2,006,820
HAC 1 $ 668,940 1 $ 668,940 1 $ 668,940
MU 1 $ 668,940 1 $ 668,940 1 $ 668,940
Sum 2 $1,337,880 3.25 $ 2,174,055 6.5 $ 4,348,110 6.75 $ 4,515,345 7 $ 4,682,580
5yr Total $ 17,057,970
FFY13 FFY14 FFY15 FFY16 FFY17
VBP: How are Hospitals Doing?
15
VBP – National Baseline Performance FFY13
55 30
16
VBP – Change since Baseline FFY13
69 48
17
Distribution of Predicted Overall 2013 VBP Scores
56 74
18 © 2012 Press Ganey Associates, Inc.
Communication with Doctors: Change in Performance since Baseline
19 © 2012 Press Ganey Associates, Inc.
Communication with Nurses: Change in Performance since Baseline
20 © 2012 Press Ganey Associates, Inc.
Responsiveness: Change in Performance Since Baseline
21
VBP – Baseline Performance FFY14
29 47
Average score
decreases by 15
points. (Ugh.)
Success Under Payment Reform:
Take an Integrated Approach
23
“Separate but Related”
HAC IQR
24
Ample published evidence that improvement in metrics subject to P4P offer benefits that cut across multiple P4P initiatives
Higher overall patient satisfaction associated with lower 30-day hospital readmission rates (AMI, HF, PN).
Higher percentage of patients responding “Always” to discharge instructions question associated with lower readmission rates
High Likelihood to Recommend and Overall Rating associated with fewer decubiti and nosocomial infections
Better performance on HQA measures correlated with lower risk-adjusted 30 mortality on same conditions
Higher patient satisfaction associated with adherence to standards of care and lower inpatient mortality
Higher scores on perception of cleanliness, blood-draw skills, and nurse responsiveness associated with lower infection rates and infection mortality.
© 2012 Press Ganey Associates, Inc.
“Separate but Related”
25
Example: Readmission in the context of HCAHPS performance (by facility)
26
Example: Readmission in the context of HCAHPS performance (by group)
Addressing Quality-based
Payment Reform (In Four Easy Steps)
28
1.
29
2. Stakeholder Awareness and Involvement
Quality
Leadership
Opportunity-
specific
Stakeholders
Process Drivers
Executive
Leadership
Clinical
Leadership
Board
Who What they need
to know and do
Methodology. Data analysis and
drill down. Identify potential
opportunities for improvement.
Compliance with standards.
Shape the culture. Set the tone.
Evaluate opportunities for
improvement. Strategy-setting.
Degree of exposure. Overall
scores. Progress to goals.
Drive change.
© 2012 Press Ganey Associates, Inc.
30
Financial Analysis
Estimate exposure: total incentive (“Withhold”)
Incentive earned/lost given current performance
Gap Analysis
Identify aspects of performance driving the greatest losses
Determine incremental improvement necessary to drive additional points/
payments
Opportunity Analysis
Look for aspects of performance affecting multiple P4P initiatives
Look for measures that move in tandem and “Rising tide” measures
What does drill-down show?
What’s the effort required to improve?
Who needs to be involved?
3. Use the Methodology to Prioritize Opportunities
© 2012 Press Ganey Associates, Inc.
31
Scenario Planning
Create improvement scenarios with prioritized opportunities
Realistic, Achievable goals (base, target, stretch)
Identify and evaluate scenarios providing maximum yield
© 2012 Press Ganey Associates, Inc.
3. Use the Methodology to Prioritize Opportunities
32
Things to consider
Relative weight of metrics and effort required to improve
In VBP, measures can drive identical incentive losses
Sample size: small number of “misses” can drive big losses
A HAC is not a HAC is not a HAC
Rising Targets: rate improvement needs to outpace aggregate improvement
Rising VBP thresholds
Hard to get out of the HAC penalty box
Role of stakeholders:
Change takes place at the “person level”
Readmissions, Mortality sensitive to practice at post-acute providers
Physician engagement, Patient engagement, Coordination of care…
3. Use the Methodology to Prioritize Opportunities
© 2012 Press Ganey Associates, Inc.
33
Not all opportunities are created equal
© 2012 Press Ganey Associates, Inc.
34 © 2012 Press Ganey Associates, Inc.
Effect of Rising Targets
35 © 2012 Press Ganey Associates, Inc.
Effect of Rising Targets
36
“Rising Tide” measure: Nurse Communication
This cluster of measures makes up 15% of a hospital’s VBP score
© 2012 Press Ganey Associates, Inc.
37
Identify and Emulate Best Practices for Top Improvement Opportunities
Concurrent management of core measures patients
Hourly Rounding
Physician Engagement
Collaboration with post-acute providers
4. Best Practices
© 2012 Press Ganey Associates, Inc.
Make the case for change with evidence-based WIIFM
Demonstrate how the best-practices are aligned with professional goals and personal interests of the individual
whose practice, processes or behavior you are trying to change
38
Make the case
Yes=4723 No=1950
Hourly Rounding Impact on Top Box %
© 2012 Press Ganey Associates, Inc.
A Practical Example
40 © 2012 Press Ganey Associates, Inc.
41
Misses on 11 patients,
Loses $102,493
Clinical Performance
Misses on 7 patients,
Loses $102,493
Misses on 4 patients,
Loses $102,493 Misses on 4 patients,
Loses $71,745
42 © 2012 Press Ganey Associates, Inc.
Satisfaction Performance
What you don’t see: 19% of
patients responded Usually
43
Gap & Opportunity Analysis
© 2012 Press Ganey Associates, Inc.
44
1. Understanding
Financial impact
Performance: where we are, where need to be
Methodologies: now and next
2. Take an integrated approach
Seven flies with one blow
3. Real change happens at the person-level
Facilitate consistency
Make the case (WIIFM)
Concluding Thoughts
© 2012 Press Ganey Associates, Inc.
Success under Payment Reform: