The CMS launched the value-based purchasing program in October 2012 in a major effort under the Patient Protection and Affordable Care Act to reimburse hospitals for quality that marked a shift from pay-for-reporting initiatives such as the Hospital Inpatient Quality Reporting Program.
Also on Thursday, the CMS posted the first round of data from the Hospital-Acquired Condition Reduction Program, another initiative established by the healthcare reform law. The Affordable Care Act also yielded the Readmissions Reduction Program, which penalizes facilities for high rates of patients who are hospitalized again within 30 days of discharge.
The three programs are the wave of the future for hospital payments and should be viewed as a cumulative force demanding performance improvement, said Eric Fontana, practice manager for research and insights at the Advisory Board Company. “There's a tendency to think it's a bonus here, or penalty there—but these are pretty significant when you add them all together,” Fontana said. By 2017, the combined penalties will put as much as 6% of inpatient Medicare reimbursements at risk.
The current adjustments are based on hospitals' performance across 26 measures of clinical processes; patient satisfaction; and outcomes, including use of preoperative antibiotics, doctor-patient communication and mortality rates. They include 12 clinical process-of-care measures; eight patient-experience dimensions; five outcome measures; and one efficiency measure on spending per beneficiary.
The program is budget-neutral because it draws its funds from an across-the-board reduction in base operating DRG payments. For 2015, that cut increased to 1.5% from 1.25% in 2014 and it will grow incrementally each year until reaching 2% in 2017. The 1.5% reduction produced a pool of $1.4 billion.
Policy leaders at the American Hospital Association were still reviewing the data but said the results are positive. “There's nothing surprising here,” said Nancy Foster, the AHA's vice president for quality and patient safety policy. “We see that hospitals continue to improve on their performance on these measures, and some measures are getting to the point where we've achieved such high levels that there's very little room for additional improvement.”
The Boston-based Massachusetts Eye & Ear Infirmary faces the steepest penalty in fiscal 2015: -1.24%. A spokeswoman there said the hospital is looking into the data but noted that the facility is a specialty hospital with a very low inpatient volume. “A lot of measures that are used by general hospitals are not applicable to the type of care we provide,” the spokeswoman said in an e-mail.
The fiscal 2017 program will add two safety measures—for hospital acquired MRSA and Clostridium difficile infections—and one new clinical process measure for early elective deliveries. Six measures will be removed because they've been identified as “topped out.”
Earlier this month the AHA participated in a hospital working group on the measure applications partnership, which helps CMS evaluate which measures should be included and dropped. Akin Demehin, the group's senior associate director for policy says for there have been big gains over time on measures related to heart attack, which have been a part of public reporting programs for several years.
Other measures—including the mortality measures—still need work, Dremehin said. “One limitation of the measure is that it is calculated using claims data, which is an imperfect mechanism to capture the clinical factors that contribute to an outcome,” he said. “It leads to a level of imprecision that can make it really challenging to calculate how well hospitals compare to one another.”
(An earlier version of this story reported different totals for the hospitals with positive or negative adjustments because of the number of decimals used to calculated the counts.)
Follow Sabriya Rice on Twitter: @Sabriyarice
Follow Maureen McKinney on Twitter: @MHMMcKinney
Follow Melanie Evans on Twitter: @MHmevans