A CMS move to up the ante for hospitals not publicly releasing results under a federal quality initiative drew fire from industry officials last week, but won praise from employers pushing to see healthcare spending tied to performance.
The American Hospital Association and Federation of American Hospitals in separate filings with the CMS sharply criticized a plan that would significantly boost the stakes in a 3-year-old federal effort to collect and publish comparable hospital quality data.
Reaction to the proposal, now under final review, highlights the tension between employers seeking relief from soaring premiums and hospitals under pressure from payers for proof of high-quality, efficient care.
"This approach is better than nothing,'' said Kelli Moler Pedas, government relations associate for the National Business Coalition on Health, a Washington-based trade group of employer health-benefit coalitions.
The group, a member of the Hospital Quality Alliance, backs "any effort'' from Medicare to expand or promote quality reporting and pay-for-performance, Pedas said, and the latest effort shows the CMS' desire "to do something and do something quickly.''
The CMS' final rule is expected around Nov. 1; the deadline for comment on the proposal was Oct. 10.
Under the plan, the CMS would cut 2 percentage points off the yearly Medicare increase for outpatient care to any hospital that fails to report selected quality results for inpatient care. Hospitals already risk lower Medicare payments for hospitalized patients should they opt out or inadequately report 10 inpatient quality measures, a list slated to grow to 21. The CMS started its inpatient pay-for-performance effort in 2005; the initial 0.4 percentage point fine for hospitals will climb to 2 percentage points under the latest proposal.
Unveiling the proposed change in August, the agency argued that its inpatient quality criteria "reflect the quality of care in the outpatient department as well as the inpatient hospital'' and could be used as substitutes while experts drafted more specific outpatient measures. The move will help eliminate waste from Medicare's mushrooming outpatient spending, which will jump an estimated 9.2% to $32.5 billion in 2007, the agency said.
But hospital industry insiders rejected use of quality measures for hospitalized patients as stand-ins for outpatient standards, calling them inaccurate and ineffective.
"There is little or no relationship between the measures being used to assess the adequacy of care provided to an inpatient with a heart attack, heart failure, pneumonia and surgical care and an assessment of care to patients in the outpatient setting,'' the Chicago-based AHA wrote.
The federation, which represents investor-owned acute-care hospitals, argued Medicare lacked scientific support for the swap. "In an effort to move expeditiously, CMS appears to have taken a shortcut that could undermine the very purpose of measuring healthcare provider performance,'' the federation's comment said.
The Joint Commission on Accreditation of Healthcare Organizations took issue with how the rule may be interpreted. Hospitals may report outpatient datanot inpatient figuresfor the quality measures, said Trisha Kurtz, the Joint Commission's director of federal relations. No evidence shows such a substitution would yield reliable results and should be vetted before policymakers proceed, Kurtz said.
But if that's not the case, and the CMS simply hopes to ratchet up pressure on hospitals to report inpatient data, the JCAHO has no objection, she added.
The CMS said it doesn't comment on proposed rules.
Quality isn't the only reason hospital trade groups objected to the proposed rule. The AHA and federation argued the CMS' bid to expand Medicare's quality incentives overstepped its authority. Congress did not "explicitly authorize'' the agency to link outpatient payments to quality measures for hospitalized patients, the AHA said.
Plus the rule retroactively penalizes hospitals, said Nancy Foster, AHA vice president of quality and patient safety policy. The CMS published the proposed rule after an Aug. 15 reporting deadline for hospitals to qualify for the 2007 quality bonus.
Federal officials identified up to 171 hospitals that could be affected by the proposed outpatient payment changeof those, only 28 opted out of the plan entirely, Foster said. The rest did not win approval from the CMS and may appeal, she said.