7 scariest acronyms of healthcare explained

December 10, 2016

The healthcare industry loves its acronyms, making it a little like a confusing, high-stakes version of alphabet soup. New acronyms are constantly introduced into the healthcare landscape, each signifying change and a new challenge.

The healthcare industry loves its acronyms, making it a little like a confusing, high-stakes version of alphabet soup. New acronyms are constantly introduced into the healthcare landscape, each signifying change and a new challenge.

 

Related: 5 things to know about CMS Administrator-designate Seema Verma

 

The latest additions to the vocabulary stem from the Institute for Healthcare Improvement Triple Aim Initiative and the shift from fee-for-service to fee-for-value payment models. Each acronym signifies a program, act or measure that has the potential to chip away at healthcare providers’ bottom lines. All this change sounds scary, but it doesn’t have to be. 

Understanding these acronyms, their impact on your organization’s daily operations, and the risks and penalties involved can alleviate your fears and help your organization continue to excel in the new economic environment.

Unmasking the Acronyms

Old and new, the following seven acronyms carry high risks for big penalties, making them the most worrisome ones floating around today. Here’s a crash course in what each means and how each will affect providers:

1. HEDIS (Healthcare Effectiveness Data and Information Set): HEDIS is used by more than 90% of health plans in the U.S. and consists of 81 measures across five domains of care. If your organization operates under pay-for-performance agreements, your quality of care is likely graded by HEDIS. Its metrics determine a significant amount of bonuses and penalties, and poor performance in any metric could prove costly.

On the other hand, high HEDIS performance metrics can amount to significant bonus earnings. For example, health plans with 100,000 or more members can generate up to $17 million for each quality metric.

 

Further reading: Top 15 tips for physicians considering political office

 

2. HRRP (Hospital Readmissions Reduction Program): Under HRRP, heavy penalties are levied for excessive monthly readmissions. Conditions covered under the program include heart failure, COPD, pneumonia, AMI, total joint replacement and CABG. Recent changes in how readmissions are measured mean Medicare penalties are projected to affect more than 2,500 hospitals for a total of $528 million in 2016.

Under the Affordable Care Act, some hospitals are excluded from HRRP, including training hospitals and those treating veterans, children, psychiatric patients and low-income patients.

Next: MACRA, CJR and PQRS

 

3. MACRA (Medicare Access and CHIP Reauthorization Act): MACRA is the new meaningful use and affects all Medicare Part B reimbursements. The quality payment program’s goal is to optimize hospital performance while promoting better health and outcomes. MACRA is expected to increasingly affect bonuses and payments, with penalties jumping from 4% in 2019 to 9% in 2022. While reimbursement adjustments start in 2019, the quality measures will begin counting in 2017.

The negative payment adjustments and additional staff requirements needed to meet MACRA metrics can be intimidating. But for the average 10-person physician group, compliance could mean increasing profits by more than 40% each year.

4. PQRS (Physician Quality Reporting System): PQRS was previously only a reporting metric, with penalties avoided as long as physicians submitted their reports. Now, performance on individual PQRS measures is compared to a baseline (calculated by your competitors) in order to determine your bonus or penalty for the quality component of MACRA. The quality score (calculated by PQRS) will count for up to half of profits or losses for the first year.

 

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5. CJR (Comprehensive Care for Joint Replacement): In 2016, Medicare’s first mandatory CJR model was introduced to 67 markets, making hospitals responsible for all Medicare spending within 90 days of discharge for orthopedic patients. Of the nearly 800 hospitals involved, 60 percent will face a penalty in 2016 based on cost performance.

Many orthopedic departments are worried they’re unprepared for the new CJR model. But according to an example group, a strong performance in 333 cases each year could potentially earn up to $1.7 million in bonuses throughout the five-year program.

6. BPCI (Bundled Payments for Care Improvement): BPCI encompasses four care models that bundle all payments associated with an episode of care. Organizations that have already opted in to the program include physician group practices, acute-care hospitals, long-term care hospitals and home health agencies.

The BPCI model places participating organizations under financial and performance accountability for an entire episode of care. Providers who efficiently manage their costs can capture a larger percentage of bundled payments than they would through fee-for-service models.

7. PCMH (Patient Centered Medical Home): The medical home model involves a team of care providers who coordinate treatment to ensure patients receive necessary care on demand. It also helps providers acclimate to the value-over-volume shift in payment models. Solo and small practices with limited resources might find it difficult to efficiently transition into a PCMH.

Several resources are available to help smaller practices take advantage of PCMH benefits. By 2019, PCMH-certified practices will receive a 5 percent Medicare bonus and avoid the risks associated with many value-based payment systems.

Next: Conquering the fear

 

Conquer the Fear

If your head is spinning from these acronyms, don’t worry-good news is hiding behind the threats of penalties. The changes these acronyms represent also promise increased profits and bonuses for organizations that produce strong patient outcomes.

Educating yourself is a good first step for ameliorating any fears you may have about healthcare’s future. Learn everything you can about the pay-for-performance programs that will soon become the norm.

 

Related: 10 things to know about HHS Secretary-designate Tom Price

 

The underlying theme to all these changes is that providers are becoming increasingly responsible for performance. There is only so much you can do while the patient is in your facility, so it’s essential to consider how you will extend care between visits. As you search for technology solutions to help you adapt, apply the same evidence-based scrutiny you would employ when considering any other intervention.

A fee-for-service infrastructure will not succeed in a value-based environment, and changing that infrastructure will take time. Your level of success with each new acronym will be benchmarked against your competitors, so it’s essential to continue improving or risk watching last year’s bonus turn into next year’s penalty.

 

Joe McDonald is co-founder of Epharmix, a company at the intersection of medicine and consumer technology offering interventions that use automated phone calls or text messages to monitor patients’ conditions while collecting disease-specific data