Lisa Remington’s Series on Accountable Care Organizations: Part V

Lisa Remington

The Remington Report‘s Lisa Remington has provided this article special to HCAF that details Accountable Care Organizations, established in the Patient Protection and Affordable Care Act of 2010. This article is part one in a series. For more information about ACOs and other trends impacting the home care industry, consider joining Remington’s Executive Academy on Health Care Reform.

Part V – Hospital Value-Based Purchasing Program: Collaboration Between Hospitals and Home Care

By: Lisa Remington, Publisher, The Remington Report, President, Alliance For Integrated Value-Driven Healthcare

CMS issued a final rule that sets forth its policies for the hospital value-based purchasing program. Under the Patient Protection and Affordable Care Act, the VBP program will pay hospitals based on their actual performance on quality measures, rather than just the reporting of those measures, beginning in fiscal year 2013.

In the first year, the VBP program will include 12 clinical quality measures as well as the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) patient experiences with care survey.

The clinical measures will account for 70% of a hospital’s VBP score and the HCAHPS survey for 30%. For FY 2014, CMS will add the heart attack, heart failure and pneumonia mortality measures to the VBP program, as well as eight measures of hospital-acquired conditions and two composite patient safety and inpatient quality indicators developed by the Agency for Healthcare Research and Quality. The VBP program will apply to all acute-care prospective payment system hospitals with certain exceptions. For example, for the clinical process measures, CMS will exclude from hospitals’ scores any measures for which they report fewer than 10 cases and will exclude from the VBP program any hospitals for which fewer than four of the 12 proposed clinical process measures apply. CMS will also exclude from the VBP program any hospital that reports fewer than 100 HCAHPS surveys during the performance period.

In FY 2014, additional measures will be included in scoring including:

  • Eleven measures involving clinical processes, for example: 30-day mortality rates for acute myocardial infarction (AMI), heart failure (HF), and pneumonia (PN); hospital-acquired condition (HAC) measures for foreign object retained after surgery, air embolism, blood incompatibility, pressure ulcers stages three and four, falls and trauma, vascular catheter-associated infections, catheter-associated urinary tract infections, and inadequate glycemic control.
  • Nine measures involving patient safety used previously in the Agency for Health Care Research and Quality (AHRQ). Inpatient Quality Indicators include accidental punctures, hip fracture mortality rate, post-operative wound dehiscence, and others.

How The Value-Based Purchasing For ACOs Intersects With All  Hospitals

On March 31st, CMS released the 429-page rule for ACOs (ACA Section 30122). The VBP parallels many of the same guidelines for ACOs and non-ACO hospitals in the following ways:

  • Both focus on a shift for providers from payments based on volume to payments based on clinical results: for VBP, 46 measures of patient safety, clinical process improvements, patient safety and patient satisfaction; for ACOs, 65 measures of quality including special attention to five distinct Medicare enrollee populations (i.e. the frail elderly, and others).
  • Both focus on collaboration across traditional sectors of the delivery system: VBPs require physician, hospital, long-term, and post-acute care coordination; ACOs require hospital, physician, and long-term care provider alignment with special focus on primary care physicians and allied health professionals.
  • Both are dynamic—the bar for each is higher each year: for VBP, 20 additional measures are added in fiscal year (FY) 2014; for ACOs, providers in both the one- and two-sided models will need to navigate Medicare savings thresholds set annually.
  • Both build on previous programs tested by the government: for VBP, the predecessor was CMS’ Hospital Inpatient Quality Reporting Program (circa 2004); for ACOs, the CMS’ Physician Group Demonstration Program (circa 2005).
  • Both put the providers at financial risk: for the hospital VBP, funding is provided by reductions in base diagnosis-related group (DRG) payments for poor performers starting at one percent in FY 2013 and two percent in 2014; for ACOs, providers participating in either the one- or two-sided models must pay back overspending to Medicare and risk any bonus if quality benchmarks are not hit.

Fundamental there are changes in how consumers will interact with their doctors and hospitals:

  • More relevant information about their performance: safety, outcomes, accessibility, methods for coordinating care, and predictable costs linked to an individual’s personal insurance program.
  • More efficiency, consistency, and accuracy in diagnosing and treating medical problems: the powerful combination of electronic health records (EHRs) and personal health records (PHRs) in mobile communication device applications PLUS clinical knowledge management tools linked to genomic mapping PLUS team-based care delivery means customized medicine and paperless transaction management. It means the convergence of what things work in health care (clinical solutions) and what they cost (financial consequence).
  • More dependence on information technology and shared decision-making with providers: applications that capture and analyze clinical and administrative data (not either or, but both) providing real-time prompts, alerts, and queries to providers and consumers about pending treatment or decisions and associated financial and clinical risks.

The new rules does take healthcare to a  new level: it links funding to performance, and it requires sectors to share risk together.

If you are interested in accelerating your agency’s alignment with health care reform, please see the brochure on Remington’s Executive Academy On Health Care Reform.

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