MedPAC seeks to junk two hospital quality programs, merge others

A day after urging the CMS to repeal a Medicare pay model that pushes doctors to provide better care to patients, an influential congressional advisory committee said it also wants to nix a pair of quality programs for hospitals.

The Medicare Payment Advisory Commission on Friday said it is working on a proposal for Congress to eliminate the Inpatient Quality Reporting Program and the Hospital Acquired Condition Reduction Program.

It will also ask Congress to merge the Hospital Readmissions Reduction Program and the Hospital Value-Based Purchasing Program into one new program known as the Hospital Value Incentive Program.

"There are currently too many overlapping programs, which creates unneeded complexity for Medicare and for hospitals," MedPAC policy analyst Ledia Tabor said Friday during a meeting. "For simplicity, hospitals should have their payment adjusted under one program as opposed to separate programs."

The new program would score hospitals based on readmissions, mortality and spending rates as well as patient experience while in care. It would create peer groups to compare hospitals based on the needs of their patients.

The proposed value incentive program would withhold 2% of hospitals' Medicare reimbursements, much like the new voluntary model MedPAC suggested Thursday to replace the Merit-based Incentive Payment System, or MIPS.

Hospitals that do better than others in their peer group will receive a bonus that's larger than their withheld reimbursements. Hospitals that perform poorly will receive back less than was withheld from them.

The new hospital quality model would not hold hospitals financially accountable for infections that patients develop while under their care. Hospitals have voiced concerns that the current hospital infection quality program is mired with false positives or negatives, and they've been held responsible for those issues, MedPAC said.

The CMS said the 769 hospitals with the highest rates of hospital-acquired conditions had their Medicare payments cut in fiscal 2017. The Association of American Medical Colleges estimates hospitals lost approximately $430 million in total as a result of the Medicare payment cuts, which is 18% more than the prior fiscal year.

MedPAC said it doesn't want to hold hospitals financially accountable for infections because it doesn't want them penalized for improving infection detection.

Commissioners worried that the change might dissuade hospitals from improving infection rates.

"My experience is that unless there is payment somehow tied to an expectation, it's very hard to move the dial on something," said Kathy Buto, a commissioner and independent health policy consultant in Arlington, Va.

But overall, the commissioners supported creating a single quality program for hospitals.

"I like the simplicity, I like moving away from the double, triple jeopardy that exists under the current programs," said David Nerenz, commissioner and director of the Henry Ford Health System's Center for Health Policy and Health Services Research.

MedPAC's staff will hone the model before reintroducing it in the spring.

Hospitals have had mixed experiences under the quality programs that MedPAC wants to eliminate or merge. There has been no apparent penalty from the Hospital Inpatient Quality Reporting Program, or IQR. The information reported in that program appears on Hospital Compare.

Hospitals participating in IQR must report their performance on all 45 measures in the program. Starting in fiscal 2015, hospitals that didn't participate in IQR lost a quarter of the percentage point increase in their payment updates.

The vast majority of hospitals participate in IQR; only 116 out of 3,370 hospitals this fiscal year did not report IQR data, according to the CMS.

As part of the Hospital Readmissions Reduction Program, Medicare uses claims data to evaluate hospitals' unplanned readmissions. Hospitals face $564 million in readmission penalties next year. That's up $27 million from this fiscal year.

The agency is planning to launch a pilot that uses clinical data from patients' electronic health records as well as Medicare claims data in an effort to address concerns over the accuracy of its quality program evaluations.