Last spring, the U.S. Department of Health and Human Services (HHS) announced a new initiative aimed at rewarding hospitals for quality of care, safety and affordability. Authorized by the Patient Protection and Accountable Care Act (PPACA), the Hospital Value-Based Purchasing Program marks a significant change in the way Medicare pays health care providers and facilities. The goal of the program, according to an HHS statement, is to pay hospitals for inpatient acute care services based on care quality, not just the quantity of services. Implementation of this program is taking place now through July 2014.
Like most CMS initiatives of this nature, this program also should have an echo effect in the private sector. Therefore brokers, along with Medicare and non-Medicare beneficiaries alike, should be aware of how this program is promoting hospital quality.
This initiative is intended to support the goals of the Partnership for Patients, a public-private partnership that “has the potential over the next three years to save 60,000 lives and save up to $35 billion in U.S. health care costs, including up to $10 billion for Medicare,” according to Healthcare.gov. Further, the www.healthcare.gov site states that over the next ten years, Partnership for Patients could reduce costs to Medicare by about $50 billion and result in billions more in Medicaid savings. However, these proposed savings should be interpreted with a grain of salt based on some of the Obama Administration’s overly optimistic assumptions regarding health care reform in recent years.
In a statement that launched the program, HHS Secretary Kathleen Sebelius said, “Changing the way we pay hospitals will improve the quality of care for seniors and save money for all of us. Under this initiative, Medicare will reward hospitals that provide high-quality care and keep their patients healthy."
An estimated $850 million will be allocated to hospitals based on their overall performance determined by a set of quality measures that have been shown to improve clinical processes of care and patient satisfaction.
Among other goals, the value-based measurement tools are designed to ensure that hospitals:
- Provide patients who may have had a heart attack care within 90 minutes;
- Provide care within a 24-hour window to surgery patients to prevent blood clots;
- Communicate discharge instructions to heart failure patients; and
- Maintain clean and safe facilities.
HHS’ formula appears at the onset quite simple – these measures that determine quality focus on how closely hospitals follow best clinical practices and how well hospitals enhance patients’ experiences of care. When hospitals follow these types of proven best practices, patients receive higher quality care and see better outcomes, according to HHS. The better a hospital does on its quality measures, the greater the reward it will receive from Medicare.
On the flip side, analysts and health care experts worry that if “hospitalists aren’t paying attention, they could put themselves at unnecessary risk or lose out on a major opportunity to demonstrate their value,” states Bryn Nelson, writer for The Hospitalist. According to Dr. Patrick Torcson, MD, chair of the Society of Hospital Medicine’s Performance and Standards Committee, folks need to be aware of the core-measures concept, which has been around since 2003 in what’s now called the Hospital Inpatient Quality Reporting (IQR) Program. “We’re not reinventing the wheel; we’re just transforming the program from pay-for-reporting to actual pay-for-performance,” noted Dr. Torcson, who is quoted on Nelson’s article. This is significant, he said, because it marks the beginning of an era of accountability and true pay-for-performance at the hospital level.
The Society of Hospital Medicine supports the program, stating, “We believe that the Medicare reimbursement system must be changed to promote value, and we strongly support policies that link quality measurement to performance-based payment.”
Nelson points out in his story that “other observers, though, have warned of the potential for unintended consequences. If doctors avoid complicated medical cases in order to increase a hospital’s score, for example, are they really improving care? Will poorly performing hospitals get caught in a vicious circle due to declining financial resources?”
The Center for Medicare & Medicaid Services (CMS) plans to add additional measures that focus on improved patient outcomes and prevention of hospital-acquired conditions. Measures that have reached very high compliance scores would likely be replaced, continuing to raise the quality bar.
Here are some resources, if you would like to read up on this new initiative and/or share them with other interested parties:
Please stay tuned as we continue to keep you up-to-date on these and other developments in our ever -evolving marketplace. Please monitor www.BenefitMall.com and www.HealthcareExchange.com for further developments.
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