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HHS’ announcement that, by the end of 2016, it aims to link 30% of Medicare reimbursements to the "quality of value" is the latest sign that, after years of talking about the importance of quality and outcomes in medicine, payers are getting serious about making them part of their reimbursement formulas.
In late January, the U.S. Department of Health and Human Services (HHS) announced that by the end of 2016 it aims to link 30% of Medicare reimbursements to the “quality or value” of providers’ services, and 50% by the end of 2018. The goal, according to HHS Secretary Sylvia Burwell, is “to move the Medicare program, and the health care system at large, toward paying providers based on the quality, rather than the quantity of care they give patients.”
HHS’ announcement is the latest sign that, after years of talking about the importance of quality and outcomes in medicine, payers are getting serious about making them part of their reimbursement formulas. And as with most of the other changes roiling healthcare, the growing emphasis on quality over quantity presents significant challenges for primary care providers (PCPs)-including the possibility of being excluded from a network for not meeting a payer’s quality targets.
But there are opportunities as well, in the form of money and personnel payers are making available to help practices improve their services, track their quality data, and improve their patients’ health.
To get an idea of how pervasive the emphasis on quality and outcomes has become, consider the following statistics:
As recently as 2011, Medicare made virtually no payments through models other than the traditional fee-for-service. Today, such payments represent 20% of the program’s reimbursements, HHS says.
In 2014, 40% of all commercial in-network payments, and 24% of outpatient PCP payments were either tied to performance or designed to cut waste, according to the nonprofit Catalyst for Payment Reform. In 2013 those percentages were 10.9% and 11%, respectively.
In 2014 more than 24 million Blue Cross/Blue Shield members were receiving care through value-based programs such as accountable care organizations, patient-centered medical homes, pay-for-performance programs and episode-based payment programs, according to the Blue Cross/Blue Shield Association.
Also noteworthy is the fact that Medicare has begun penalizing practices for not providing quality data. Under the Physician Quality Reporting System, practices that did not report data for 2013 are being docked 1.5% of their Medicare reimbursements for 2015, and will receive 2% penalties in 2016.
And immediately after announcement of the HHS initiative, several large health systems, payers and other stakeholders announced they were forming the Health Care Transformation Task Force with a goal of putting 75% of their business into value-based arrangements by 2020.
NEXT: Keeping track of metrics
One of the biggest challenges many practices face in this regard is keeping track of which quality metrics their payers expect them to report on in a given year.
“There’s a sense among some physicians that the measures change a lot from year to year, and it’s very hard for them to know what next year’s measures are going to be,” says Mark Friedberg, MD, MPP, senior natural scientist with the RAND Corporation. “That might leave them in a position where they’ve allocated resources to one group of measures that stayed stagnant, while another group expanded. And there was no signaling from the health plan which one they were planning to expand.”
The solution-to the extent there is one-is to stay in regular contact with payers. “By asking payers about their long-term priorities and what measures they are considering in future years, physician practices can be more certain that their investments in performance improvement will be recognized and rewarded…but only if payers share their plans ahead of time,” says Friedberg.
Representatives of Wayne State University Physicians Group, a multi-specialty practice in and around Detroit, Michigan, meet with its largest payers annually to review quality-related priorities and benchmarks, says Michelle Bryant, RN, MBA, director of quality management and patient safety.
“We review our priorities and what the data are telling us and collaborate with them [payers] about their priorities so we are on the same page as far as our efforts,” Bryant explains. “Whenever possible we join resources to do out reach initiatives and try to meet those targeted benchmarks.”
Not surprisingly, payers will target the metrics they want providers to meet based on the areas that show the most promise for cost savings, says Doral Jacobsen, MBA, FACMPE, senior manager with the consulting group DHG Healthcare in Charlotte, North Carolina. One such area is prescribing of generic medications. “If a practice isn’t doing a good job of using the formulary in terms of prescribing generics, you could build a performance-based metric that says if you improve this by a given percent we will increase your reimbursement.”
Jacobsen adds that payers increasingly are using the patient-centered medical home (PCMH) designation as an indication of a practice’s commitment to measuring quality and outcomes, and calculating their reimbursements accordingly. “Payers know that to become accredited a practice has to have rigorous patient management capabilities in things like diabetes, hypertension and asthma. So many payers are rewarding practices that attain that designation.”
Jacobsen notes that some commercial payers develop their own PCMH designation based on standards set by national organizations such as the National Center for Quality Assurance, but will add their own criteria, such as cultural competency. “It’s like the medical home is the foundation, and every payer has their own flavor for what they believe has value for their membership and will fold that on top,” she says.
Recognizing the financial and logistical burden of quality and outcome measurements, especially for smaller practices, payers are adding financial incentives such as per-patient per-month (PMPM) payments on top of their fee-for-service reimbursements, says Nanci Robertson, president of Robertson Consulting, Inc. in Denver, Colorado. Practices use these funds to hire nurses and other providers as case managers, performing tasks such as following up with patients recently discharged from the hospital.
“It’s just calling a patient and asking do you have an appointment with your PCP? Can you get your medications? It’s truly amazing the impact just of nurses talking with patients on the phone,” she says.
South County Internal Medicine, Inc., an eight-physician internal medicine practice in Wakefield, Rhode Island, uses the PMPM fees it receives from the Rhode Island Chronic Care Sustainability Initiative, a multi-payer PCMH project to fund the salaries of two case managers. The case managers’ responsibilities include keeping track of the quality measurement requirements of the PCMH itself as well as those of commercial payers, such as Unitedhealthcare and Blue Cross/Blue Shield of Rhode Island.
“Sometimes there isn’t full overlap among the measures the various health plans require,” says Nitin Damle, MD, FACP, the practice’s managing partner. “Every practice needs those one or two staff members that are able to really understand how to gather and analyze the data. Without it we wouldn’t be able to report out many of these measures.”
Among those the practice tracks are hemoglobin A1C levels for patients with diabetes, beta-blocker use in treating coronary artery disease, and blood pressure control in hypertensive patients.
NEXT: The role of EHRs
An EHR system that makes it easy to capture and report data is crucial to the quality reporting process, experts agree. “If it’s arduous and complex to pull reports, then you’re going to compromise your ability to meet quality metrics,” Jacobsen says. “So EHRs can really ease that process or they can make it more convoluted.”
EHR systems that are 2014-certified do collect data for submitting clinical quality measures, notes Shari Erickson, MPH, vice president for governmental affairs and medical practice for the American College of Physicians (ACP). “However, development of a dashboard requires a customization that typically comes with a cost to the clinician. These costs are a significant barrier to the use of these dashboards,” Erickson adds.
Related:5 ways to put EHRs into action
Compounding the problem is that small practices often don’t know the level of functionality they really need in an EHR, says Jonathan French, director of health information systems quality for the Health Information Management Systems Society. “The vendor will give them what they ask for, even if it’s not necessarily what they really need.”
French recommends working with one of the regional extension centers established by the Office of the National Coordinator for Health IT to develop detailed specifications before purchasing an EHR system. Also helpful is to join vendor user groups. “It’s very useful to hear from other users who can tell you ‘here’s the workflow, here are the IT touchpoints, and here’s how the system helped improve our outcomes,” French says.
Between two payment models
The growing need to demonstrate and report on quality and value while still operating in a largely fee-for-service environment can leave physicians feeling like they are straddling reimbursement models. “I call it having one foot in the deep and one in the shallow, and it’s going to be one of the great challenges of the next decade,” says Robertson.
Coping with these demands requires a team-based approach to care delivery says Damle. “You have to have a good support staff and work as a team in order to improve care.” Physicians at South County rely on staff members for tasks such as following up with patients post-discharge and contacting patients in advance of office visits to confirm what medications the patient is taking and the status of routine preventive tests. “All of this is a very different model from the way we used to practice,” he says.
NEXT: The impact of narrow networks
Until now, the consequences of not reporting quality data or participating in a value-based reimbursement plan with a commercial payer have consisted mostly of not receiving additional funds or other resources from payer. (Medicare, as noted previously, now penalizes practices for not reporting PQRS data.) But that may soon be changing, as payers narrow their provider networks to keep premiums down and compete on the health insurance exchanges.
“If you aren’t prepared technology-wise and case management-wise the payers aren’t going to invite you to the dance,” says Jacobsen. “I had a primary care practice who had to release a physician because a BCBS product went live in their area and they weren’t included. So it can mean pretty significant changes to a practice if they’re not in these networks. And the high-quality, low-cost providers are going to be.”
At the same time, however, the increased availability of quality and outcomes data gives practices a powerful marketing tool, Jacobsen says. “If you’re a practice with high quality ratings and your costs are competitive, you can focus on marketing that value proposition to new partners, like accountable care organizations,” she says. “You can say, ‘we’ve got high quality and we’re efficient, so send us your patients.’ Thinking about your business in a different way and driving the volume to something you’re really good at makes a whole lot of sense.”
Editor’s note: This is part one of a two-part series on the growing use of quality metrics in healthcare. Part two will explore the role of data-mining in meeting and improving quality metrics.
NEXT: Do quality metrics actually improve care?
With Medicare and commercial insurers increasingly tying physicians’ reimbursement to their ability to report on-and meet-outcome measurements, the question logically arises, is it working? Is the growing emphasis on quality and value having an impact on patient health, and/or healthcare spending?
The short answer is, it’s too soon to tell. Still, intriguing-if scattered-evidence is beginning to emerge that it might be. For example:
Medicare spending for 2014 was projected to be about $1,200 less per beneficiary than had been forecast in 2010, the year the Affordable Care Act was passed, according to a Kaiser Family Foundation study. The slowdown in spending is partially attributable to “reductions in provider payment updates and Medicare Advantage payments” as well as cuts resulting from the 2013 budget sequester, the authors say, while adding that “providers may be tightening their belts and looking to deliver care more efficiently in response to financial incentives included in the ACA, and it is possible that these changes are having a bigger effect than expected.”
The National Council of Quality Assurance, in its study “The State of Health Care Quality 2014,” found improvements in 46% of the 139 Healthcare Effectiveness Data and Information Set performance measures it tracked over the previous three to five years, performance declines in 8%, and mixed results or no trend in 46%.
Medicare’s evaluation of the first year of its Comprehensive Primary Care (CPC) initiative, a collaboration between public and private payers designed to improve primary care delivery in seven regions, concluded that “CPC appears to have reduce total monthly Medicare Part A and B expenditures per beneficiary …. by $14, or 2 percent. The reductions appear to be due to the favorable…impacts on hospitalizations and emergency department visits (total and outpatient.)” The evaluation also found a four percent reduction in unplanned 30-day hospital readmissions, a decline it calls “sizable but not quite statistically significant.”
The national 30-day, all-cause hospital readmission rate average for Medicare fee-for-service beneficiaries fell from 19% in the 2007-2011 period to 18.4% in 2012, according to a 2013 study in Medicare & Medicaid Research Review. The readmission rate fell below 18% for the first part of 2013, Medicare subsequently reported.
“I’m a contract negotiator, and from my perspective I can tell you payers wouldn’t be investing (in quality initiatives) if they hadn’t already seen the outcome and the return on investment,” says Doral Jacobsen, MBA, FACMPE, senior manager with DHG Healthcare. “So pieces of this are working, though it varies by market and by practice.”
Nitin Damle, MD, FACP, a member of the American College of Physicians Board of Regents, is more cautious. “We feel that a more value-based approach to practicing medicine is important, so moving away from pure fee-for-service to a more value-based reimbursement system is the direction we want to move in. But we’re not sure yet if we are moving the needle in terms of whether patients overall are getting a higher quality of care.”
NEXT: CMS seeks input on ways to advance value-driven care
The Centers for Medicare & Medicaid Services (CMS) wants comments on proposed innovations in advanced primary care, including ways to encourage more comprehensiveness in primary care delivery and moving reimbursement from encounter-based towards value-driven, population-based care. General topics of interest include:
CMS seeks input from consumers and consumer organizations, healthcare providers, associations, purchasers and health plans, Medicaid agencies and other state offices, quality review organizations, social service providers, HIT vendors, and other stakeholders.
Submissions must be supplied using the form found at http://innovation.cms.gov/files/x/apcrfi.pdf. Comments must be received on or before 11:59 pm EDT, March 16, 2015. For questions regarding RFI submission contact APC@cms.hhs.gov.