CMS moving steadily toward P4P; quality pros express reservations
Key issues include measures to be used, data collection challenges
Recent actions by the Centers for Medicare & Medicaid Services (CMS), as well as comments from agency officials, make it clear that it is likely a case of when, not if, some form of pay-for-performance (P4P) or pay-for-quality system will be instituted.
And while quality experts clearly support actions that encourage improved outcomes and quality measurements, they caution that the old saw, "the devil is in the details," has never been truer than when applied in this case.
CMS has signaled its intentions with such actions as its demonstration project on a pilot P4P system with Premier Healthcare, and even more recently, as it issued its final rule for FY 2006 rate increases for inpatient stays in acute care hospitals.
The rule includes a 3.7% increase but only for those hospitals participating in Medicare’s quality reporting initiative; those that do not submit quality information will receive an update of only 3.3%.
The final rule also enhances the voluntary quality reporting program by including requirements that improve the accuracy of the reported data. In order to receive the full payment for FY 2006, hospitals must correctly abstract and report clinical data on 10 quality measures relating to the treatment of heart attack, heart failure and pneumonia cases for two consecutive calendar quarters.
Signs are clear
"Yes, I think this indicates CMS is moving in the direction of pay-for-performance," says Kay Beauregard, RN, MSA, director of hospital accreditation and nursing quality at William Beaumont Hospital in Royal Oak, MI. "The first step is assigning data to be collected in an appropriate manner, and then validated. The next step is reimbursement based on quality indicators. This is not unlike some incentive programs for some private payers."
"From all the literature I read, it is definitely coming; it’s almost like it’s embedded already," asserts Mori Moriuchi, chief compliance officer of Greenwood Village, CO-based Certus Corp., a provider of revenue cycle and government reimbursement services to health systems, hospitals, and physician groups.
"Even in the current payment mechanism with LOS [length of stay] guidelines, and even in monitoring claims they have CCI [Clinical Coding Initiative] edits," notes Moriuchi. "It says, for example, that if you charge for one item, you can’t charge for another — because it’s already included in the first procedure — so they are already monitoring service utilization. They are monitoring services by bits and bytes, taking one step further in quality.’"
In addition, he says, CMS looks at diagnoses when it reviews claims and procedures performed, to see if they meet the national standard. "The key now," Moriuchi adds, "is they are moving into outcomes."
CMS itself concedes it is moving in the direction of some form of incentive-based system. "Well, the answer is yes,’ although we are still laying plans and figuring out how we might proceed in that direction," says Tom Gustafson, PhD, deputy director of the Center for Medicare Management, which runs the fee-for-service program.
"[CMS Administrator Mark B. McClellan, MD, PhD] has made no secret of his interest in pursuing pay for performance, at least in our major sectors, and hospitals are the largest in dollar terms — roughly $100 billion in spending," he continues.
Limitations recognized
Gustafson adds that there is much work to do before CMS can implement a true P4P system. "We are on a statutory course at the moment to pay on a differential basis for the next year as we do at present, for hospitals providing information, largely abstracted from their records, about their performance in 10 different measures," he explains. "The statute calls for that to go on for three years. What’s in the rule is a somewhat elaborate version of that model, but it only relies on measures regarded by most as pretty obvious things — like giving aspirin to a patient with acute myocardial infarction. More elaborate measures are in the wings and may be brought into play at a later time."
The current limitations concern Beauregard. "CMS is only focusing on these 10 indicators of quality, while there are literally hundreds," she asserts. "Many patient populations are not captured in these three diagnoses; in fact, it’s a very small data capture upon which to do a full assessment. There’s nothing for obstetrics or surgery, for example. But it’s a start."
Accuracy of data
Moriuchi agrees. "The big question is, are they measuring the right things?" he posits. "Take giving aspirin in the ER for a person with a heart attack; is that the right measure to get the right outcome? That’s where some of the debate is going, but everybody knows it’s coming."
Patrice L. Spath, of Brown Spath Associates, Forest Grove, OR, health care quality consultants, has concerns about the accuracy of the data being supplied.
"There are requirements that some validity studies be done of the accuracy of the data," she observes. "That includes the QIOs getting a sampling of patient records and re-abstracting them, and also statistical analyses being done by the data collection agencies. So, the issue is not just sending in data; it’s sending in accurate data with the data being checked."
The kind of feedback hospitals get on the quality of their data is critical, she continues. "If you just plug along and nobody tells you that you do not have quality data, there’s no reason to change," she observes.
A case of overkill’?
The ideal process, Spath says, would be for facilities to do their own re-abstracting internally, "Like you would do for any QI project." In other words, she emphasizes, "Data definitions are all standard; everyone knows what they are when they collect the data; common questions that might come up are answered consistently if you are using more than one collector — in other words, basic data quality. You need to make sure you have those systems in place to assure data quality, and if something looks out of whack to you, you should probably check it before you send your data in."
"A big part of how well hospitals comply is how automated their systems are," Moriuchi says. "For those hospitals with major investments in information systems, it will be easier for them. However, it is a financial burden."
Beyond the potential weaknesses in the system, Spath questions whether such a move is even necessary.
"I think that just the collection of data and the submission of comparative information is causing quality to be improved, because administrators notice when their hospital is not looking as good as others in the area," she observes.
"So I’m not sure if CMS needs to go that next step and initiate pay for performance. They may find performance takes care of itself through the fact that there’s public reporting."
However, Spath is concerned that those hospitals most likely to have quality problems are the critical access hospitals, "And they are not involved in a lot of these public reporting activities - and may not even be Joint Commission-approved," she observes.
Nevertheless, she concedes that CMS seems to be going in the direction of P4P. "I think they will because there is considerable public pressure to go in that direction," she notes.
"And by public,’ I also mean purchasers. Their primary motivation is to save money, but I think that’s very short-sighted, because what they are willing to pay for are not necessarily the things they will save money on in the long haul."
How soon should quality managers expect to see a CMS-sponsored P4P program? "We are interested in ideas like the Premier demonstration project, and I expect we will pursue others like it," says Gustafson. "But a lot of planning has yet to be done, and we certainly will work with Congress as well. In other words, hospitals don’t have to buckle their seat belts quite yet."
How much time to prepare?
CMS’ current statutory mandate has two more years to run, he notes. "It’s not inconceivable that we would be able to mount something more ambitious in a sooner time than that, but I assume we are in a two-to-four year horizon before we can hit the ground running."
In the meantime, says Moriuchi, "I’d invest in better information systems, and in your quality monitoring staff. Hire people that understand both the payment impact of what you’re doing and the quality impact; that’s the challenge for all the providers."
It also opens up opportunities for a new breed of quality manager, he says. "I think the person who understands both quality and the payment impact will become invaluable," Gustafson predicts. "They are tough to find, but I encourage quality managers to better understand the payment mechanisms.
The more they understand, the better they will be able to communicate upward in their organizations, while at the same time they will have credibility with physicians because they will know the clinical side."
Need More Information?
For more information, contact:
- Kay Beauregard, RN, MSA, Director of Hospital Accreditation and Nursing Quality, William Beaumont Hospital, 3601 W 13 Mile Road, Royal Oak, MI 48073. Phone: (248) 898-0941. E-mail: [email protected].
- Tom Gustafson, PhD, Deputy Director, Center for Medicare Management,Centers for Medicare & Medicaid Services, 7500 Security Blvd., Baltimore MD 21244-1850. Phone: (877) 267-2323.
- Mori Moriuchi, Chief Compliance Officer, Certus Corporation, 5670 Greenwood Plaza Boulevard, 6th Floor, Greenwood Village, CO 80111. Phone: (877) 823-7887.
- Patrice L. Spath, Brown Spath Associates, P.O. Box 721, Forest Grove, OR 97116. Phone: (503) 357-9185. E-mail: [email protected].
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