Baltimore, MD—It has been said that a journey of a thousand miles begins with a single step. It is with this sensibility that Donald P. Howard of the Centers for Medicare & Medicaid Services (CMS) began his presentation at the 2012 Association of Community Cancer Centers (ACCC) meeting, detailing the current state of the hospital value-based purchasing (VBP) program.
The VBP program attempts to rewrite a systemic paradigm, moving from an approach in which CMS is a passive payer based on volume to a direct involvement by CMS as a purchaser of quality care. “The VBP program is a way to incentivize hospitals to move forward in this direction,” he said.
Established in the Affordable Care Act, the VBP program will financially reward hospitals by the outcomes of the service they provide. “The infrastructure is already in place to do this,” he said. Hospitals are already reporting to CMS through the Hospital Inpatient Quality Reporting (IQR) Program. Indeed, the quality measures established for the VBP program echo those of the IQR. “This is just the next step in promoting higher quality care for Medicare beneficiaries at a lower cost.”
What distinguishes the VBP program from anything yet in practice is the funding mechanism. “VBP is funded by a 1% withhold from participating hospitals’ diagnosis-related group payments,” Mr Howard said. Hospitals that perform well get the withholding back; hospitals that excel in quality outcomes get a bit more of the payment pie in addition to the withhold, and hospitals that underperform are financially penalized (their withhold being shifted to those with superior outcomes). On VBP rollout, 1% is withheld, but proportion rises to 2% by 2017.
The list of eligibility requirements is fairly straightforward. Those who are ineligible for VBP include hospitals subject to payment reductions under the IQR program and hospitals and hospital units excluded from the inpatient prospective payment system (eg, psychiatric hospitals, children’s hospitals).
Eligible institutions—estimated to account for >3000 hospitals, according to Mr Howard—include hospitals that have at least 10 cases for each of at least 4 applicable measures during the VBP performance period, and hospitals with at least 100 completed Hospital Consumer Assessment Healthcare Providers and System surveys during that same period. “My guess is that most people in this room are going to be in this program,” said Mr Howard, adding that, “For the 2013 assessment, the performance period was from July 1, 2011, to March 31, 2012.”
As noted, the domains measured are those of the IQR: 12 clinical processes of care (eg, prophylactic antibiotic selection for surgical points) and 8 patient experience of care dimensions (eg, discharge information). “Most of these will apply to cancer patients,” he said.
Scores consist of points awarded for achievement or improvement in a given domain. Achievement is defined as having a given institution ranked in the top 50% of total percentile ratings for all participating hospitals (your accomplishments compared with those of everyone else). Improvement is gauged by a comparison of what you did during the current performance period compared with the last performance period (your accomplishments compared with you).
Confused yet? That is why CMS has recently concluded a round of dry runs of the VBP program. “Our desire was to give hospitals the opportunity to really try to understand the program and what impact it would have on them as early as possible,” Mr Howard explained. “We also wanted to provide quality improvement organizations with a better understanding of the hospital reports and the type of questions their hospitals may ask.”
“Some of you have these reports in hand now,” he added. However, he warned listeners that the report does not indicate how your hospital will actually perform in fiscal year 2013, “or whether your hospital will be eligible for the 2013 VBP program.”
Specific examples of how quality-ofcare measures are derived and how total performance scores are interpreted can be found at www.cms.gov/hospital-value-based-purchasing/01_overview.asp?.
“This is a first step,” said Mark S. Soberman, MD, MBA, FACS, Oncology Service Line Director, Frederick Regional Health System, MD. “To their credit, the CMS folks acknowledge that.” Dr Soberman is very supportive of the overall goal. “We are clearly evolving from payment for volume to payment for value, and that is okay, because the incentives in the current system are perverse.”
Like any new idea, there are adjustments to be made. However, “what CMS is looking at here are surrogates of quality,” Dr Soberman said. “These are actually process measures—did you do this, did you do that, did you report this or that. This is not yet true value-based purchasing, where you take outcomes measures and use those to determine payment, because outcomes are not the giving of antibiotics, outcomes are. Did the patient get well? Did the patient go home, return to their family, go back to work? Those are outcomes.”
In addition, “everybody takes a 1% hit. If you do okay, you get the 1% back. If you just do a reasonable job, you theoretically might not get the 1% back. If you do a phenomenal job, you get the 1% plus 0.91% more. If you really bust your tail and do great, you get (a minor increase) in your Medicare payments. It is definitely a carrot and a stick,” Dr Soberman said, “but it is a pretty tiny carrot.” But, Dr Soberman acknowledged, “Again to their defense, they have to start somewhere.”
