March 11, 2016

Plain Talk about Pay for Performance – 37 numbers you need to know

The complex set of measures that comprise the three major CMS programs known as Pay for Performance can be overwhelming, as I started to discuss in my earlier blog post on Hospital-Specific Reports. Let’s continue to simplify all the information. It’s really not that hard, although wading through the multitude of documents that describe the program can be daunting. Never fear, however. I’ve done the wading for you. And here’s what you need to know:

By definition, “Pay for Performance” (P4P) is any program that provides financial incentives to providers for achieving certain desired outcomes. Note I’m referring only to hospital reimbursement here. There’s a lot more coming down the road that will affect physician practices, ambulatory centers and others. But that’s a story for another day. There are three major CMS programs that fall under the heading P4P:

  1. The Hospital Value-Based Purchasing Program (VBP)
  2. The Hospital-Acquired Condition (HAC) Reduction Program
  3. The Hospital Readmission Reduction Program (HRRP)

All of these are funded through reduction in annual DRG-based payments. The HAC Reduction Program and the HRRP are both structured solely as penalties for poor performance. The VBP program, however, is unique in that high-performing providers are able to “earn back” not only the amount of payment that was removed but also additional reimbursement beyond the level of payment reduction.

There are 37 unique measures in the FY 2016 version of these three programs (49 measures in total; 12 are duplicated in both VBP and the HAC Reduction Program). They are:

Value-Based Purchasing – 32 measures

  • Clinical Process of Care Domain ( 8 measures)
    • 1 each for
      • Timely Fibrinolytic therapy in Acute Myocardial Infarction (AMI – heart attack)
      • Influenza immunization
      • Antibiotic selection for Community Acquired Pneumonia (CAP)
    • 5 Surgical Care Improvement Project (SCIP) measures
  • Patient Experience of Care Domain (8 measures)
  • Clinical Outcome Domain (15 measures)
    • 12 specific outcome measures (also included in the Hospital Acquired Condition (HAC) reduction program)
      • Patient Safety Indicators (known in aggregate as PSI-90) (8 measures)
      • Healthcare Associated Infection (4 measures )
        • Central Line Associated Blood Stream Infections (CLABSI)
        • Catheter Associated Urinary Tract Infection (CAUTI)
        • Two Surgical Site Infection (SSI) measures
          • Abdominal Hysterectomy
          • Colon Surgery
        • 3 thirty-day mortality measures for AMI, Heart Failure (HF) and Pneumonia (PN)
      • Efficiency (1 measure) – Medicare Spending per Beneficiary (MSPB)
        • Includes all Medicare Part A and Part B claims paid from 3 days prior to a hospital admission through 30 days after discharge

These are the 32 measures that inform the VBP program. As a reminder, 12 of the measures in the clinical outcomes domain of the VBP program above are also used to determine penalties under the CMS Hospital Acquired Condition (HAC) Reduction Program. The mortality measures are not part of the HAC Reduction Program, just the VBP program.

There are 5 additional measures under the CMS Hospital Readmission Reduction Program (HRRP):

  • Readmission to any hospital (not just back to yours) within 30 days of discharge following treatment for any of the following five diagnoses:
    • Acute Myocardial Infarction (AMI) – (heart attack)
    • Congestive Heart Failure (HF)
    • Pneumonia (PN)
    • Chronic Obstructive Pulmonary Disease (COPD)
    • Total Hip or Knee Arthroplasty (THA/TKA)

These then are the 37 measures that have a financial impact on your hospital under the three major CMS P4P programs. You should know your hospital’s score on each of them as well as the actual financial impact based on the CMS formulas within each program

There is actually a fourth program known as the Inpatient Quality Reporting Program (IQRP) that requires hospitals to submit much of the data that feeds the first three programs in order to receive the CMS Annual Payment Update (APU). IQRP provides a financial incentive for hospitals to report their data, and 99% of US hospitals already participate in this program. Since it really isn’t Pay for Performance, but rather Pay for Reporting, I have not included it in this discussion.

That’s enough for now. These are the metrics that you need to pay attention to. I realize that you are most likely familiar with much of this information, but sometimes it’s nice to have it all in one place. If you have questions about any of this, please contact me via LinkedIn and I would be glad to discuss any of this information with you along with methodologies for tracking these metrics.

In future issues of this blog I will cover a variety of other important topics and explore much more detail with you. Potential topics include:

  • Processes, outcomes and domains
  • Weighting and measure calculations
  • Data sources
  • Risk adjustment of the data
  • Background and justification for the various programs.
  • Formulas for determining reimbursement and metric weighting
  • “Performance Periods”, “Improvement Scores”, Baseline Periods” and Achievement scores
  • How to estimate your hospital’s reimbursement impact
  • How to check your hospital’s P4P penalties and submit an appeal if there are errors
  • Exclusion criteria and eligibility for low volume exclusions
  • What is coming next (after 2016)?

Let me know which of these or other topics would be of interest. As always, your comments, suggestions or questions are welcome.