Medicare’s Healthcare Quality Incentive Strategies
Sheila H. Roman, MD, MPHSheila H. Roman, MD, MPH
Trent Haywood, MD, JDTrent Haywood, MD, JDCMSCMS
September 27, 2005September 27, 2005
Overview of Today’s Presentation
• CMS focus on public reporting and pay CMS focus on public reporting and pay for performance demonstrationsfor performance demonstrations
• MB Update in MMAMB Update in MMA
• Hospital Quality Incentive Hospital Quality Incentive Demonstration with Premier, Inc.Demonstration with Premier, Inc.
Calls for Medicare to Provide Payment for Quality
• IOM report 2002IOM report 2002
• Health Affairs article, former HCFA Health Affairs article, former HCFA administrators, 2003administrators, 2003
• MedPAC report 2004MedPAC report 2004
• Private sector effortsPrivate sector efforts
• Bridges to ExcellenceBridges to Excellence
• Leapfrog GroupLeapfrog Group
Medicare Demonstrations
• A demo is a way for CMS to send a new A demo is a way for CMS to send a new message, to test new payment methodsmessage, to test new payment methods
• Medicare demonstrations linking payment Medicare demonstrations linking payment to qualityto quality• Premier hospital quality incentive demoPremier hospital quality incentive demo• Care management performance demoCare management performance demo• Physician group practice demoPhysician group practice demo
Hospital Quality Alliance (HQA): Improving Care Through
InformationEnd-game:End-game:• excellent quality careexcellent quality careTo get there:To get there:• one robust, nationally standardized and prioritized one robust, nationally standardized and prioritized
set of measures reported by every hospital in the set of measures reported by every hospital in the country, accepted by all purchasers, overseers and country, accepted by all purchasers, overseers and accreditors;accreditors;
• Collaborations, standardization, oversight, Collaborations, standardization, oversight, incentivesincentives
Differential Marketbasket payment update, sec. 501• ““each subsection (d) hospital shall submit to the each subsection (d) hospital shall submit to the
Secretary quality data (for a set of 10 indicators Secretary quality data (for a set of 10 indicators established by the Secretary as of November 1, established by the Secretary as of November 1, 2003) that relate to the quality of care furnished by 2003) that relate to the quality of care furnished by the hospital in inpatient settings in a form and the hospital in inpatient settings in a form and manner, and at a time, specified by the Secretary.”manner, and at a time, specified by the Secretary.”
• If such hospital does not submit data…”the If such hospital does not submit data…”the applicable (payment) percentage increase … shall applicable (payment) percentage increase … shall be reduced by O.4 percentage points”be reduced by O.4 percentage points”
Hospital Public Reporting
434
1407
1952
4043 4192
August, 2003 February,2004
May, 2004 October, 2004 March, 2005
Number of Reporting Hospitals
HQA: Current Status
• ““Starter set” of 10 measures (bolstered by Starter set” of 10 measures (bolstered by MMA market basket payment update MMA market basket payment update incentive to PPS hospitals)incentive to PPS hospitals)
• Over 4,000 hospitals reported in Over 4,000 hospitals reported in November, 2004November, 2004
• More clinical measures (10 to 17 to 20 More clinical measures (10 to 17 to 20 through September 2005)through September 2005)
• The first national project to measure The first national project to measure hospital performance and offer additional hospital performance and offer additional Medicare payment for top quality careMedicare payment for top quality care
• ““Pay for quality”Pay for quality”
• Can economic incentives effectively Can economic incentives effectively improve quality of care?improve quality of care?
CMS/Premier Hospital Quality Incentive Demonstration Project
HQID Hospital Participation
• VoluntaryVoluntary
• Eligibility: Hospitals in Premier Perspective Eligibility: Hospitals in Premier Perspective system as of March 31, 2003 system as of March 31, 2003
• 278 hospitals participating278 hospitals participating
• Demonstration Project: Pilot test of conceptDemonstration Project: Pilot test of concept
• May be expanded in the futureMay be expanded in the future
CMS/Premier HQI – Over 270 National participating hospitals
HQID: Expanded Set of Measures• Use of 34 measuresUse of 34 measures
• Expands 10 measure “Starter Measure Set” Expands 10 measure “Starter Measure Set” in HQAin HQA
• Drawn largely from NQF endorsed hospital Drawn largely from NQF endorsed hospital performance measure setsperformance measure sets
• Uses both process and outcome measuresUses both process and outcome measures
• Includes 2 AHRQ PSIsIncludes 2 AHRQ PSIs
• A three-year effort linking payment with A three-year effort linking payment with quality measures quality measures (launched October, 2003)(launched October, 2003)
• Top performers identified in five clinical Top performers identified in five clinical areasareas• Acute Myocardial InfarctionAcute Myocardial Infarction• Congestive Heart FailureCongestive Heart Failure• Coronary Artery Bypass GraftCoronary Artery Bypass Graft• Hip and Knee ReplacementHip and Knee Replacement• Community Acquired PneumoniaCommunity Acquired Pneumonia
Indicators within AMI, Indicators within AMI, CABG, HF, and CAP CABG, HF, and CAP represent all patients (all represent all patients (all payers). Hip and knee payers). Hip and knee replacement indicators replacement indicators apply only to Medicare apply only to Medicare patients.patients.
HQI demonstration project
HQID Hospital Scoring• Hospitals scored on quality measures related Hospitals scored on quality measures related
to each conditionto each condition• Individual measures “rolled-up” into overall Individual measures “rolled-up” into overall
composite score for each conditioncomposite score for each condition
• Composed of two components:Composed of two components:
• Composite Process RateComposite Process Rate
• Risk-Adjusted Outcomes IndexRisk-Adjusted Outcomes Index• Categorized into deciles by condition to Categorized into deciles by condition to
determine top performersdetermine top performers
The Hospital Quality Incentive Demonstration• Bonuses for top 2 deciles for each conditionBonuses for top 2 deciles for each condition
• Top decile given 2% bonus of their Top decile given 2% bonus of their Medicare DRG payments for that Medicare DRG payments for that condition condition
• Second decile given a 1% bonusSecond decile given a 1% bonus
• Possible penalty in third year if below Possible penalty in third year if below baseline thresholdbaseline threshold
HQID: Year 3 Quality Score Must Exceed Baseline• Demonstration baselineDemonstration baseline
• Clinical thresholds set at year one threshold scoresClinical thresholds set at year one threshold scores• Lower 9Lower 9thth and 10 and 10thth deciles deciles
• If performance in year 3 does not exceed baseline, If performance in year 3 does not exceed baseline, hospital will receive payment penaltyhospital will receive payment penalty• 1% lower DRG payment for conditions below 91% lower DRG payment for conditions below 9 thth
decile baseline leveldecile baseline level• 2% lower DRG payment for conditions below 102% lower DRG payment for conditions below 10 thth
decile baseline leveldecile baseline level
Anticipated payment scenario
1st Decile
Hospital
Hospital
Year One Year Two Year Three
Top Performance Threshold
Payment Adjustment Threshold
2nd Decile
3rd Decile
4th Decile
5th Decile
6th Decile
7th Decile
8th Decile
9th Decile
10th Decile
1st Decile
2nd Decile
3rd Decile
4th Decile
5th Decile
6th Decile
7th Decile
8th Decile
9th Decile
10th Decile
1st Decile
2nd Decile
3rd Decile
4th Decile
5th Decile
6th Decile
7th Decile
8th Decile
9th Decile
10th Decile
Condition XCondition X Condition X
Payment Incentive
Payment Incentive
Payment Incentive
Payment Adjustment - Year 3
CMS/Premier HQI ProjectAlready showing improvement
Composite Quality Score: Quarterly Median Improvement by Focus Area
Premier / CMS Hospital Quality Initiative ParticipantsOctober 1, 2003 - September 30, 2004
Preliminary Results
70.0%
64.1%
84.9%
89.9%
85.7%
90.5%*
76.2%*
80.0%*
92.6%*
90.0%*
50.0%
55.0%
60.0%
65.0%
70.0%
75.0%
80.0%
85.0%
90.0%
95.0%
100.0%
AMI CABG Pneumonia Heart Falure Hip and Knee
Clinical Focus Area
Co
mp
os
ite
Qu
alit
y S
co
re
4Q-03
1Q-04
2Q-04
3Q-04
* Improvement in Composite Quality scores between 4Q-03 and 3Q-04 are significant at the p < = .001 level * Based on a paired sample t-test of the mean scores for the same time periods
CMS/Premier HQI ProjectReduction in Variation
AMI Composite Quallity Score Distribution
Time Periods:4Q03 - 2Q04
2Q041Q044Q03
Co
mp
osi
te Q
ua
lity
Sco
re
120
100
80
60
• Positive trend in both Positive trend in both upper and lower scores upper and lower scores
of rangeof range• Reduction in variance Reduction in variance
(narrowing of range)(narrowing of range)• Median moving Median moving
upwardupward
Challenges to Incentives for Quality Performance
• Selection of measures/off label use of measuresSelection of measures/off label use of measures• Dynamic measurement environmentDynamic measurement environment• Measures maintenanceMeasures maintenance• Hospital Burden Hospital Burden • Unintended consequencesUnintended consequences• Time lagsTime lags• Validation/Scoring methodologyValidation/Scoring methodology• Need for proof of effectivenessNeed for proof of effectiveness
Next Frontiers
• Measurement of other dimensions of qualityMeasurement of other dimensions of quality
• Scoring methodologiesScoring methodologies
• BenchmarkingBenchmarking
• Incentives/Payment for qualityIncentives/Payment for quality
• Health Information TechnologyHealth Information Technology
• Improve health care systemsImprove health care systems
Thank you!
Sheila H. Roman, MD, MPHSheila H. Roman, MD, MPH
410-786-6004410-786-6004
[email protected]@cms.hhs.gov
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