Why, What, & How of Healthcare Reform
March 6, 2015Ring 2: Readmission Reductions
April 13, 2015Medicare Value-Based Purchasing (VBP) Program is the keystone of healthcare reform for providers. The VBP Program directs the Centers for Medicare and Medicaid Services (CMS) to reward or to penalize providers on the basis of delivering higher quality healthcare services at lower cost. CMS, the largest payer in the American healthcare system, rewards and penalizes healthcare providers via citations and payments.
Value-Based Purchasing comes from a series of experiments conducted by CMS in the initial stages of the quality revolution in U.S. healthcare. CMS was interested in discovering those incentive/disincentives that have the maximum cost-benefit impact on improving the quality of healthcare services. CMS’ goal was to transform Medicare from a passive payer of claims to an active purchaser of high-value healthcare services provided to beneficiaries. This program, like most Medicare programs, is built upon the principles of transparency and accountability. Participating hospitals’ clinical, operational, financial performance is publicly reported and available on the internet.
The Value-Based Purchasing in its expression as a program, was initiated in 2010, and continues to mature and elevate its impact on re-orientation of delivery of healthcare services to Medicare patients. The VBP Program applies to all hospitals (3500+) that have not been granted an exception, i.e. critical access hospitals, specialty hospitals, etc. Per the directives of the program, a portion of a providers’ Medicare reimbursement is withheld by a set percentage. A portion of the withhold can be earned back based on that hospital’s quality and cost performance.
Measuring a) improvement in quality, and b) reduction in cost
required the CMS to assemble a series of clinical measures, called core measures. These core measures are in four specific areas of care:
•Heart Attack (acute myocardial infarct)
•Heart Failure (congestive heart failure)
•Pneumonia
•Surgical Site Infection
In addition, hospitals must report their performance in the process of care delivery in these areas to CMS quarterly. Any progress or retrenchment in a specific quarter only impacts the annual score, however, quarterly filings are required to maintain CMS certification.
The Value-Based Purchasing program also compels providers to survey and report the patient’s assessment of the provider’s healthcare services. A defined set of questions are posed to a random selection of patients visiting the hospital. These questions are contained in the Hospital version of the Consumers Assessment of Healthcare Systems Service called HCAHPS or patient satisfaction scores. HCAHPS provides insights from the patients viewpoint on how effective and efficient communication, pain control, the care delivery environment, and responsiveness were during the inpatient visit.
Next the VBP program requires providers to track and report the 30 day mortality rate for their institution for Pneumonia, Heart Attack, and Heart Failure, and the number of Central line-associated bloodstream infections, plus a selection of Patient Safety measures.
Finally, the CMS collects and compiles data on the cost of healthcare services per Medicare beneficiary, and this is indexed to the historical cost of providing the same care to similar patients. Hospitals are scored on their “efficiency,” i.e. the ability to deliver quality care at lower costs to Medicare.
Taken together, these performance scores are used to rank any given hospital on a national percentile scale. Rankings are based on the overall points assigned to performance scores, and the relative improvement achieved by the hospital during the measurement period.
Value-Based Purchasing is intricate, with many measures and assessments, plus costs all piled into a ranking. This ranking is then used to pay out the “incentive” payments to hospitals that are performing above the 50% mark.
The net effects of the program are these:
•Hospitals need to reduce their costs
•Hospitals need to improve their quality
•Hospitals need to satisfy their patients
If they do these things successfully, on a pathway to continuous improvement, they will thrive in the Value-Based Purchasing program. If hospitals cannot do this, they will lose Medicare revenue, and receive poor quality citations. As this status is published to the public, their private insurance contracts will be less lucrative, and Medicare volume will also be reduced in coming years.
It is critical that you assess the value of your solutions and how they assist your customers to attain success in the Value-Based Purchasing program.
•How do your solutions improve costs, quality, and patient satisfaction?
•How do your solutions improve the clinical, operational, financial performance of your customers?
By:
Total Innovation Group, Inc. Senior Partner
and
Gunter F. Wessels, Ph.D., M.B.A.
Total Innovation Group, Inc. Practice Principal, Parter
To Read more about 5 Rings of Healthcare Reform℠ see other Blog post below: