Using Hospital Data to Measure Quality of Care and Linking it to DRG - - PowerPoint PPT Presentation

Using Hospital Data to Measure Quality

• f Care and Linking it to DRG
• f Care and Linking it to DRG

(Case-Mix) Payments

Presented by Jugna Shah, MPH President, Nimitt Consulting Inc. Nordic Case-Mix Conference Helsinki, Finland J ne 2010 June 2010

June 2010 Jugna Shah, Nimitt Consulting, Inc.

Key Quality and Case-Mix Based Payment Questions From the Early Years of DRGs

 “Promoters and Critics” of PPS implementation had various expectations about what would happen to quality of care as a result of DRG payment incentives – Carrot vs. Stick Question:

– Would hospitals respond appropriately to PPS incentives to reduce patient care without compromising quality in order to keep the surplus generated or – Would they cut care so much that patients would have poor

• utcomes that went beyond eliminating unnecessary or

marginally beneficial care to restricting or cutting needed care? Would quality suffer?

Result from the Early Years…

 No real declines seen in the “quality of care” being provided…WHY?

 Peer Review Organizations during the 1980 and Quality Integrity Organizations during the 1990s focused on making sure DRG payment incentives did not result in poor quality of care for patients  Hospitals and doctors are inherently good and would not with-hold  Hospitals and doctors are inherently good and would not with hold care or discharge patients quicker and sicker…  Financial pressures of DRGs had yet to be felt…  The notion that costs can be lowered only at the expense of quality was not true… But Two Key Questions Remain: (1) Did we achieve a reduction in costs? (2) Do We Have the Health Outcomes We Want?

General Information About the U.S. Healthcare System

• Healthcare spending accounts for 16% of the GDP and by 2017 this is

expected to be 19.5%

• Medicare is the main social insurance program providing health insurance

coverage to people over the age of 65, disabled persons, and/or those who meet other special criteria.

• U.S. government is the single largest insurer/payer in the country
• In 2008, the U.S. spent $2.3 trillion on health care—about $7,681 per person

(could double by 2020).

• Many healthcare providers and payers exist
• Other payers follow Medicare’s lead in making coverage and payment

decisions

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June 2010 Jugna Shah, Nimitt Consulting, Inc.

Some Facts About Today’s U.S. Healthcare System

• The U.S. spends more on health care than any other

country in the world, yet our quality is worse…

– The U.S. has the highest rate of preventable deaths, highest infant mortality, and lowest average life expectancy compared to many industrialized nations. p y – 15 million incidents of medical harm occur in U.S. hospitals every year (Source: Institute for Healthcare Improvement) – As many as 98,000 deaths a year in the U.S. are the result

• f preventable medical errors (Source: Institute of Medicine)

More Facts About Healthcare in the U.S.

• The U.S. spent $2.3 trillion on health care in 2008—about $7,681

per person (could double by 2020).1

• As much as 30 percent, or $690 billion, may be wasted.2
• 1 Centers for Medicaid & Medicare Services

2 Institute of Medicine, 2002 & New England Healthcare Institute, 2008

More Facts About Healthcare in the U.S. (cont)

• As much as 16 percent of hysterectomies

a year may be unnecessary

– Institute of Medicine, 2001

• Only half of the 100 million

antibiotics prescribed annually are necessary.

– FDA, 2003

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June 2010 Jugna Shah, Nimitt Consulting, Inc.

More Facts About Healthcare in the U.S. (cont)

• Colon cancer patients get recommended follow-up treatment only

40% of the time.

– From Journal Cancer, 2008

• It's estimated that a quarter of all

new drug prescriptions contain errors.

– Institute of Medicine, July 2006

We Have a Problem…

• In its landmark 2001 report, Crossing the Quality Chasm, the

Institute of Medicine said it best, “health care harms too frequently and routinely fails to deliver its potential benefits ... between the health care we have and the care we could have lies not just a gap, but a chasm."

• Greater spending rapid access and high utilization create an
• Greater spending, rapid access, and high utilization create an

illusion of high quality health care, yet… – The link between more spending and quality doesn’t exist – The link between high utilization and quality doesn’t exist

In fact, greater spending and higher utilization have been linked to “poorer” outcomes which is one reason for the latest reforms!

Some Questions to Consider…

• Can providers be “motivated, inspired, forced, etc.” to provide

high quality of care? If so, how?

– Make outcomes data public and let the “market” work – Link payments directly to data reporting and quality measures

• Do NOT pay for poor care up front
• Do NOT pay for poor outcomes at the end

Do NOT pay for poor outcomes at the end

• Can efficiency incentives created by the government through

payment system “carrots and sticks” promote hospitals to improve quality of care?

• What does “value” in healthcare mean? Value to whom?

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June 2010 Jugna Shah, Nimitt Consulting, Inc. Defining “Value” in Healthcare…

• Value may include:

– Reduction in cost – Efficient care delivery – Improvement in outcomes – The improvement of health outcomes relative to the money spent (Harvard Business School) spent (Harvard Business School)

• The National Priorities Partnership, convened by the

National Quality Forum (NQF) states, “The vision is to have world-class, affordable healthcare system by eliminating harm, waste, and disparities, while improving payment policy, public reporting, quality improvement, and consumer engagement”.

Quality and Payment: Medicare’s Current Initiatives

Quality and Payment Today

• With high health care costs, waste in the system, and poor quality

indicators, the government has had no choice but to finally ask questions related to access, utilization, rising costs, efficiency, and quality in order to find a way to obtain value for every U.S. dollar spent on healthcare.

• Medicare has expressed a strong desire to move from being a

“passive payer to an active purchaser of healthcare services”

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June 2010 Jugna Shah, Nimitt Consulting, Inc.

Medicare’s Current Initiatives that Link Case-Mix Payments to Quality (1) Requiring certain data elements to be reported – “pay for reporting” (2) No longer making higher MS-DRG payments for certain “preventable conditions” also called hospital acquired conditions that may develop while the patient is in the conditions that may develop while the patient is in the hospital or for never events – “pay for performance” (3) Publishing data on process and patient satisfaction measures – “transparency as an indirect market driver”

These initiatives represent a start, but more must be done to achieve greater value for each healthcare dollar spent.

Current Medicare Quality Measure Environment

• Medicare tracks quality measures in most of the settings it

pays for services including:

– Hospital inpatient and outpatient; about 60 measures – Physician Quality Reporting Initiative– about 153 measures Nursing Home about 19 measures – Nursing Home – about 19 measures – Home Health – about 12 measures – Dialysis (End Stage Renal Disease, or ESRD) – about 22 measures – 30-day readmission measures for acute myocardial infarction and pneumonia.

• Re-admission measures are significant since almost 18% of Medicare

patients are readmitted within 30 days of discharge resulting in almost $15 billion in costs annually with one study showing about $12 billion

• f the costs being preventable

(1) Pay-for-Reporting Case-Mix Data

• The Hospital Quality Reporting Data for Annual Payment Update

program required by law in 2003 and authorized Medicare to pay hospitals that successfully reported quality measures more. Initially this started with a payment of .4% more and today it is up to 2% more.

• Today, for hospitals to receive their full case-mix payment under

Medicare-Severity Diagnosis Related Groups (MS-DRGs) and, their

• utpatient case-mix payment based on Ambulatory Payment

Classifications (APCs), pre-defined quality measures must be reported

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June 2010 Jugna Shah, Nimitt Consulting, Inc.

Pay-for-Reporting Initiative: Hospital Measures Required to Receive Full Case-Mix Payments

• Hospital Inpatients and MS-DRGs

– 44 quality measures required for hospital inpatients

• Nine Medicare-calculated patient safety indicators;
• Five 30-day readmission measures for acute myocardial infarction and

pneumonia.

• Measures in the following categories have been developed: heart

Measures in the following categories have been developed: heart attack, heart failure, pneumonia, surgical care, patient satisfaction, mortality, and nursing sensitivity measures

• Hospital Outpatients and APCs

– 11 measures currently required

• 7 related to the emergency department and acute myocardial infarction

patients

• 4 related to imaging utilization

(2) Quality and Payment: A Truer Link Betw een Poor Quality

• f Care and Case-Mix (MS-DRG)

Payments

Higher MS-DRG Payments NO Longer Made for “Poor-Quality of Care”

• “Poor quality of care” defined in part by whether selected preventable

conditions are being acquired while the patient is in the hospital – Selected “preventable conditions” called Hospital Acquired Conditions (HACs) are ones that Medicare does not pay extra money for if developed while the patient is in the hospital – HACs selected based on being:

– (1) high cost, high volume, or both; – (2) assigned to a higher paying MS-DRG when present as a secondary diagnosis; and – (3) considered reasonably preventable through the application of evidence-based guidelines.

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June 2010 Jugna Shah, Nimitt Consulting, Inc.

HACs and Never Events

• HACs

– If the diagnosis surfaced during the patient’s hospitalization or was not recorded by staff as being present on admission, then Medicare will not factor them into the grouping process. – HACs are considered the “fault” of the provider and will not be “rewarded” through higher MS-DRG payments – If the diagnosis was present on admission, then it’s not considered the “fault” of the hospital and is counted in the MS-DRG grouping process and could generate a higher final payment

• Never Events

– Certain conditions, are always considered “preventable” and Medicare does NOT allow these diagnoses to impact grouping or payment – Never events also considered the providers “fault”

Current List of HACs and Never Events

• Foreign object retained after surgery
• Air embolism
• Blood incompatibility pressure ulcer stages III & IV
• Falls and trauma (including fracture, dislocation, intracranial injury,

burn, etc.)

• Catheter-Associated Urinary Tract Infection (UTI)

y ( )

• Vascular catheter-associated infection
• Manifestations of poor glycemic control
• Surgical site infection, mediastinitis, following coronary Artery

bypass graft Surgical site infection following certain orthopedic procedures

• Surgical site infection following bariatric surgery for obesity
• Deep vein Thrombosis and pulmonary embolism following certain
• rtho procedures

Tracking HACs Through Diagnoses Present on Inpatient Admission

• Present on Admission (POA) Implemented October 1, 2007

– Hospitals began identifying diagnoses present at the time the patient is admitted to the hospital for all of its inpatients – Each recorded diagnosis must have one of the following, POA indicators reported

• Y = yes, present at the time of inpatient admission
• N = no, not present at the time of inpatient admission
• U = unknown; documentation insufficient
• W = provider unable to make a clinical determination
• 1 = unreported/not used; hospitals exempt from reporting submit

this indicator

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June 2010 Jugna Shah, Nimitt Consulting, Inc.

POA Documentation Requirements

• Consistent and complete documentation critical to capture

accurate POA information

• Medical record documentation from any provider involved in

the care and treatment of the patient can be used to support the determination of POA

• Missing, conflicting, or unclear documentation must be

resolved

• Joint effort required between the clinician and the coder to

achieve complete and accurate documentation, code assignment, reporting of diagnoses and procedures, and now POA.

The Impact of POA and HACs

• n Case-Mix (MS-DRG) Payments
• Starting October 1, 2008, the recording of POA began affecting

the MS-DRG assignment

• For all claims where a diagnosis for a HAC is reported but not

indicated as being POA, Medicare does not allow the diagnosis to group to a higher MS-DRG for payment as this is considered to be a diti d l d i d i th h it l condition developed or acquired in the hospital

• A more direct link between case-mix reimbursement and what is

considered “poor quality of care” established

• More diagnoses expected to be added to the HAC and Never

Events list thereby reducing even more MS-DRG payments to hospitals in the future for “poor quality of care”

(3) Transparency in the Medicare Program Through Publicly Available Comparative Data

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June 2010 Jugna Shah, Nimitt Consulting, Inc.

Transparency in the Medicare Program Through Publicly Available Comparative Data

• Medicare releases data through “Hospital Compare”, a consumer-
• riented website created in 2005 by Medicare in association with the

Hospital Quality Alliance (HQA)

• As of March 2008, Medicare began posting cost information in

addition to quality metrics on Hospital Compare

• Hospital Compare information is updated quarterly and can be

downloaded at: www.HospitalCompare.hhs.gov

– http://www.hospitalcompare.hhs.gov/Hospital/Search/Welcome.asp?version=defa ult&browser=Firefox|3|WinXP&language=English&defaultstatus=0&MBPProvid erID=&TargetPage=&ComingFromMBP=&CookiesEnabledStatus=&TID=&Stat eAbbr=&ZIP=&State=&pagelist=Home

Example of Inpatient Measures on Hospital Compare

• Hospital Compare reports on 27 measures of hospital quality of care

in the areas of heart attack, heart failure, pneumonia, and the prevention of surgical infections.

– 24 clinical processes of care and 3 clinical outcomes measures – 10 patient experience of care topics are covered New patient survey information on patient experience of care also – New patient survey information on patient experience of care also available now

• Consumers now have access to the information they need to make

effective decisions about the quality and value of health care available to them through local hospitals

• Indirect financial and non-financial incentives being created through

public reporting and transparency – the market at work!

Using the Hospital Compare Website 9

June 2010 Jugna Shah, Nimitt Consulting, Inc.

Go online and Test the Hospital Compare Site

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June 2010 Jugna Shah, Nimitt Consulting, Inc.

Moving From the Present to The Near Future:

Using Financial Incentives to “Motivate” Providers to Improve Outcomes By Becoming “Meaningful Users” of the Electronic Health Record

Change is Afoot…Why Now ?

• The government is no longer willing to tolerate an

enormously expensive healthcare system with poor

• utcomes
• The economy has been a key driver of some of the changes
• Agreement from “thought leaders” on the priority areas for
• Agreement from thought leaders on the priority areas for

improving quality

• 2009 regulatory initiatives and 2010 health reform efforts

expected to change how providers deliver care in the future and how they will be paid

• Non-governmental payers and States leading the way in

developing new payment systems

2009 Legislation Aimed at Improving the Healthcare System

• Government recognition that something has to be done to contain

costs and improve the health care system in the U.S.

• Economic stimulus bill called the American Recovery and

Reinvestment Act (ARRA) passed by the U.S. Congress in 2009, allocated $19 billion to promote adoption and use of health allocated $19 billion to promote adoption and use of health information technology (HIT) for economic and clinical health (HI-TECH) and especially the “meaningful use” of the electronic health record (EHR) – All about improving the health of Americans and the performance of the healthcare system through the meaningful collection, transmission, and use of clinical data and information across the entire health system

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June 2010 Jugna Shah, Nimitt Consulting, Inc.

Why Health Information Technology (HIT)?

• HIT allows comprehensive management of medical information and

its secure exchange between health care consumers and providers.

• HIT is not about investing in technology, but rather a means of

improving health care quality, preventing medical errors, increasing efficiency, reducing unnecessary health care costs, increasing administrative efficiencies, decreasing paperwork, expanding access administrative efficiencies, decreasing paperwork, expanding access to affordable care, and improving the health of the population.

• HIT establishes financial “carrots and sticks” for eligible

professionals (EPs including physicians) and hospitals who are successful in becoming “meaningful users” of certified electronic health records (EHR) from 2011 to 2015

Financial Incentives for EPs and Hospitals Who Are “Meaningful EHR Users”

• The Carrots

– EPs under Medicare can earn up to $44,000 – EPs under Medicaid can earn up to $ $63,750 – Eligible hospitals under Medicare FFS can earn a one time payment of $2 million + $200 per discharge amount (for discharges from 1150 to 23,000) adjusted for Medicare/Medicaid share and a transition factor

• ver 4 years
• The Sticks

– Physicians not using a certified EHR by 2015 will lose 1% of their Medicare fees, 2% in 2016, and 3% in 2017 – Hospitals not using a certified EHR by 2015 will face payment cuts through their MS-DRG payment update factor

Financial Incentives Example for Eligible Professionals 12

June 2010 Jugna Shah, Nimitt Consulting, Inc.

What is Meaningful Use? Why is it Important?

• The ARRA specified the following 3 components of meaningful use:

– Use of certified EHR in a meaningful manner (ex: e-prescribing) – Use of certified EHR technology for electronic exchange of health information to improve quality of health care – Use of certified EHR technology to submit clinical quality and other measures

• Meaningful use is intended to further the following goals:

– Improving the quality, safety, and efficiency of care – Reducing disparities – Engaging patients and families in their care – Promoting public and population health – Improving care coordination – Promoting the privacy and security of EHRs

Conceptual View of Meaningful Use from Medicare/CMS

Stage 2 Stage 3 Stage 1

The Stages of Meaningful Use

• Stage 1

– Electronically capturing health information in a coded format – Using information for care coordination purposes; – Using decision support tools to facilitate disease and medication management – Reporting clinical quality measures and public health information

• Stage 2

– Use of health IT for quality improvement at the point of care – Electronic transmission of information in structured formats – Application to inpatient and outpatient hospital settings.

• Stage 3

– Promoting improvements in quality, safety and efficiency, – Patient access to self management tools – Access to comprehensive patient data and improving population health.

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June 2010 Jugna Shah, Nimitt Consulting, Inc.

Meaningful Use Defined in the Context of Health Outcomes Policy Priorities and Care Goals

Health Outcomes Policy Priorities Care Goals Improving quality, safety, efficiency, and reducing health disparities (1) Provide access to comprehensive patient health data for patient’s health care team; (2) Use evidence‐based

• rder sets and CPOE; (3) Apply clinical decision support at the

point of care; (4) Generate lists of patients who need care and use them to reach out to patients; (5) Report information for quality improvement and public reporting Engage patients and families in their health Provide patients and families with timely access to Engage patients and families in their health care Provide patients and families with timely access to data,knowledge, and tools to make informed decisions and to manage their health Improve care coordination Exchange meaningful clinical information among professional health care team Improve population and public health Communicate with public health agencies Ensure adequate privacy and security protections for personal health information (1) Ensure privacy and security protections for confidential information through operating policies, procedures, and technologies and compliance with applicable law; (2) Provide transparency of data sharing to patient.

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June 2010 Jugna Shah, Nimitt Consulting, Inc. Meaningful Use Measures

• Eligible professionals

– 25 Objectives and measures – 8 Measures require ‘Yes’ or ‘No’ as structured data – 17 Measures require numerator and denominator

• Eligible hospitals

Eligible hospitals

– 23 Objectives and measures – 10 Measures require ‘Yes’ or ‘No’ as structured data – 13 Measures require numerator and denominator

• Reporting Period

– 90 days for the first year – Full year for subsequent years

Meaningful Use Measures

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June 2010 Jugna Shah, Nimitt Consulting, Inc.

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June 2010 Jugna Shah, Nimitt Consulting, Inc.

Demonstrating Meaningful Use: The Reporting Requirements

• For 2011 and 2012, EPs and eligible hospitals will

demonstrate they satisfy meaningful use objectives through attestation through a secure mechanism, such as claims reporting or an online portal.

– Must attest to the accuracy and completeness of the numerators, denominators, and exclusions submitted for each of the applicable measures, and report the results to CMS for all applicable patients. – For 2011, providers submit summary quality measure data by attestation – For 2012, providers must submit summary quality measure data electronically

The Far Future of Case-Mix Based Payment Systems and Value-Based Healthcare Initiatives…Can Even Stronger Links Be Created Betw een Payments and Outcomes?

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June 2010 Jugna Shah, Nimitt Consulting, Inc.

From Health and Human Services Secretary Kathleen Sebelius at the American Hospital Association April 2010 Annual Meeting

• " Health and Human Services Secretary Kathleen Sebelius, stressed

the need to "change the incentives in our health care system so doctors and hospitals get rewarded for providing high-quality care," saying "too often we pay for quantity, not quality…volume, not value " value."

• She said the Medicare demonstration projects included in the health

reform law are intended to spur more coordinated care, because "health care providers work best when they work together.“ The question is NOT if existing payment systems will be redesigned, but when

New Payment System Models Linking Quality and Outcomes to Payments

• New payment systems under design and testing are

focusing on larger and larger payment bundles with quality and outcomes as key focus areas F i d l d d b h d

• Four main models under study by the government and
• ther payers

– Pay for performance – Bundled payments/global payments (i.e., episodes) – Patient-centered medical home model – Risk sharing (i.e., accountable care organizations)

Payment Models Under Discussion

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June 2010 Jugna Shah, Nimitt Consulting, Inc. Leaders in Implementing Innovative Payment Systems

Hospitals/Health Systems

• Gesinger (ProvenCare)

Cl l d Cli i

State/Payer Innovations

• Massachusetts

– Blue Cross/Blue Shield

• Cleveland Clinic
• Kaiser
• Mayo
• Intermountain
• Maine

– Patient Centered Medical Home – Prometheus Payment Reform

• Minnesota

– Baskets of Care

What do they have in common?

ProvenCare from Gesinger

• ProvenCare is based on CEO Glenn Steele's concept that "we shouldn't get

paid if we don't do the right thing”...warranty concept applied

• ProvenCare sets a fixed price -- which includes a percentage of the

historical costs of complications -- for a given medical problem.

• This creates a powerful financial incentive to get things right the first time.

Conditions includes are typically high-volume, high-margin procedure yp y g g g p that's well studied and has low mortality and complication rates.

– Elective Coronary Artery Bypass Graft (CABG) – Elective Percutaneous Angioplasty (PCI) – Total Hip Replacement – Cataract – EPO – Perinatal – Bariatric Surgery – Low back pain

Blue Cross and Blue Shield of Massachusetts (BCBSMA)

• Alternate Quality Contract (AQC)

– Model that creates payment incentives based on outcomes – Incentives created to eliminate misuse, overuse, and underuse of services – Physicians and hospitals are jointly accountable for the total quality and costs

• Basics of the model

– Provide a single global payment to cover all health care services

• Savings opportunities by addressing underuse, misuse and overuse

within global payment level; encourages efficiency

– Performance incentives based on quality and safety metrics and can result in up to 10% more money paid above the global payment

• This helps provide a protection against withholding of needed care

– Inflation factor allowed for controlled and predictable growth

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June 2010 Jugna Shah, Nimitt Consulting, Inc.

BCBSMA AQC Model

Summary and A Look to the Future…

• Linking quality to case-mix payment exists in the United States through data

reporting, transparency, and HACs/POA initiatives but much more is on the way

• U.S. federal government investments initiatives and investments in in HIT

and the EHR as a means to achieve “value” in the health care delivery system by improving outcomes while reducing waste and inefficiencies could fundamentally change how services are paid for by Medicare and Medicaid in fundamentally change how services are paid for by Medicare and Medicaid in the future

• State level and other payer innovations are leading the way in new payment

system designs

• Case-mix based payment systems are likely going to be replaced in the next

5-7 years with systems based on global payments, bundles of care, episodes,

• etc. that have outcome measures as inherent payment drivers…all in the name
• f reducing costs and improving patient outcomes

Thank You and Questions and Answ ers

Presented By:

Jugna Shah, MPH President of Nimitt Consulting Inc. 2038 18th Street NW #403 2038 18th Street NW #403 Washington, DC 20009 Phone: 215-888-6037 Fax: 208-460-6613 E-mail: jugna@nimitt.com Web: www.nimitt.com

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