The drive for value-based payments continues to accelerate as the Medicare Payment Advisory Commission on Friday proposed a program that would tie quality to payments for skilled nursing facilities, home health services, inpatient rehabilitation facilities and long-term care hospitals.
The program builds on the commission's previous work to develop a standard set of measures for post-acute care settings, as well as define and apply a set of principles that use Medicare payments to improve the quality of care.
MedPAC said that a unified prospective payment system across the four post-acute settings requires a uniform value incentive program. The panel, which advises Congress on Medicare policy, emphasized that beneficiaries with similar health statuses are often treated in different settings so the program should evaluate providers with a common set of measures.
The proposed incentive program includes a small number of risk-adjusted, claims-based measures. They include all-condition hospitalization within the post-acute care stay, successful discharge to the community and Medicare spending per beneficiary. MedPAC said that there's a lot of room for improvement for each of the measures because there's enormous variation between the best and worst performers based on recent claims data.
The program would score performance using absolute, prospectively set targets. It would also account for social risk factors by comparing providers with similar shares of dual-eligible beneficiaries, which are patients who qualify for both Medicare and Medicaid. The commission said that a 5% withhold would fund the incentive payments. But it said that number might change based on feedback from its members.
MedPAC asserted that a new approach is necessary because the current value-based payment programs for skilled nursing facilities and home health agencies don't meet the commission's principles. Neither program has a small set of population-based outcome measures focused on quality, patient experience and resource use. The programs also include incentive payment cliffs and don't account for social risk factors when translating performance into payment.
The commission was careful to say that providers would be scored within post-acute care settings at the beginning of the program because there's considerable performance variation across settings. The program could then transition to use the same standards for all post-acute providers once a unified prospective payment system is implemented.
While most MedPAC members expressed support for the new incentive program, they had reservations about the measurements, scoring methodology and the size of the withhold.
Some members were concerned by the trade-offs associated with using uniform measures to evaluate performance across different post-acute settings. They worried that patients across settings are dissimilar in ways that the proposed measurements don't capture.
Dr. Lawrence Casalino, a MedPAC member, was especially concerned that physicians won't use the program data to make decisions for their patients because they don't believe that patients in post-acute settings are comparable.
"Will home health agencies ever really treat patients that are like institutionalized patients?" he wondered.
The commission, which includes industry stakeholders, voiced support for adding function and patient experience measures to further encourage post-acute care providers only to accept patients that are appropriate for their setting. Several commission members expressed hope that the quality measures would cause post-acute providers to specialize in the types of patients they serve. That could improve quality overall if providers develop expertise in caring for patients with specific conditions.
But some members raised concerns that the quality measures might create financial incentives to underdeliver on the intensity of care.
"I don't disagree with the intent . . . but do we have the data to provide rational payments? Or will we create perverse incentives that harm patients?" said Dr. Amol Navathe, a member of the commission.
And other MedPAC members worried that the measures might not adequately control for social risk factors, especially the social determinants of health and related differences in patients' lives. For example, there's likely immense variation in the social determinants of duel-eligible beneficiaries that could impact quality and risk due to differences in socioeconomic status. Some dual-eligible recipients are of low socioeconomic status, while others spend down their savings to become eligible.
"We can't leave the social determinants thing for somebody else to figure out," argued Pat Wang, a MedPAC member and CEO of insurer Healthfirst.
The commission also raised questions about the withholding level. MedPAC members asked whether there was data to support that a 5% withhold would drive changes in quality and practice. They also wondered if a high withhold could affect the financial viability of post-acute providers, especially small ones with limited access to financing. MedPAC member David Grabowski suggested that the program could set a lower withhold and increase it as providers become more familiar with the program. He suggested the withhold could eventually exceed 5% for specific providers.
MedPAC plans to model the new incentive program based on the commissions' feedback and present the results next year. The commission did not discuss how much it would cost Medicare or the post-acute facilities to implement this proposed program.