CMS Proposes Value-Based Purchasing

A new rule proposed by the Centers for Medicare and Medicaid Services that aims to reward hospitals for quality – above all else – could be a boon for hospitalists, predicted Dr. Patrick Torcson, chair of the Society of Hospital Medicine’s Performance and Standard Committee.

The so-called value-based purchasing program was required under the Affordable Care Act (ACA) and includes proposals for performance standards, a scoring scheme, and suggestions for how the scores could be translated into incentive payments that would first be rewarded to hospitals in the fiscal year beginning Oct. 1, 2012.

It’s unclear exactly how the payments will affect hospital physicians just yet, but "there’s no group better-positioned than hospitalists to help hospitals be successful" under the program, said Dr. Torcson, who practices at the St. Tammany Parish Hospital in Covington, La.

As Dr. Torcson sees it, this program offers "an exciting opportunity for hospitalists to become champions of the hospital-level agenda." The program could give hospitalists leverage in contracting situations. The offer of a team to help the hospital become successful "becomes a leverage point," just as the ability to influence length of stay was a leverage point in the 1990s, he said.

Hospitalists should pay particular attention to how the CMS calculates a bonus payment to the hospital: That payment could end up being the same as – or less or more than –the subsidy a practice receives from the hospital. Hospitals will not balk at the subsidy if the hospitalist physicians can demonstrate how much they contributed to securing the bonus payment, Dr. Torcson said.

"This is now real pay-for-performance," he said, noting that the program is basically an extension of the Hospital Inpatient Quality Reporting program.

CMS Administrator Donald Berwick agreed. "The hospital value-based purchasing program proposal expands upon CMS’ long-standing pay-for-reporting program to reward hospitals not just for reporting data, but for the results of that data," he said.

Hospital quality data have been reported publicly since 2005 at a CMS Web site (www.hospitalcompare.hhs.gov). The quality measures reported for that initiative will be the same under the value-based purchasing program, so every hospitalist will be familiar with these measures, said Dr. Torcson.

The 17 clinical processes of care measures proposed for fiscal 2013 center around acute MI, heart failure, pneumonia, hospital-related infections, and surgical care improvement. Facilities will also be measured on patient satisfaction via the HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems Survey).

For fiscal year 2014, the CMS is proposing to incorporate measures on 30-day mortality; hospital-acquired conditions such as falls, pressure ulcers, and catheter-associated infections; and a variety of patient safety measures.

The program will be funded by a reduction in base operating diagnosis-related group (DRG) payments for each discharge. In fiscal 2013, that reduction will be 1%. At 3 months before the Oct. 1, 2012, start of that fiscal year, the CMS will notify hospitals of the estimated amount they will receive as an incentive payment. On Nov. 1, 2012, they’ll get notice of the exact payment amount.

The CMS will take comments on the proposal until March 8.

A new rule proposed by the Centers for Medicare and Medicaid Services that aims to reward hospitals for quality – above all else – could be a boon for hospitalists, predicted Dr. Patrick Torcson, chair of the Society of Hospital Medicine’s Performance and Standard Committee.

The so-called value-based purchasing program was required under the Affordable Care Act (ACA) and includes proposals for performance standards, a scoring scheme, and suggestions for how the scores could be translated into incentive payments that would first be rewarded to hospitals in the fiscal year beginning Oct. 1, 2012.

It’s unclear exactly how the payments will affect hospital physicians just yet, but "there’s no group better-positioned than hospitalists to help hospitals be successful" under the program, said Dr. Torcson, who practices at the St. Tammany Parish Hospital in Covington, La.

As Dr. Torcson sees it, this program offers "an exciting opportunity for hospitalists to become champions of the hospital-level agenda." The program could give hospitalists leverage in contracting situations. The offer of a team to help the hospital become successful "becomes a leverage point," just as the ability to influence length of stay was a leverage point in the 1990s, he said.

Hospitalists should pay particular attention to how the CMS calculates a bonus payment to the hospital: That payment could end up being the same as – or less or more than –the subsidy a practice receives from the hospital. Hospitals will not balk at the subsidy if the hospitalist physicians can demonstrate how much they contributed to securing the bonus payment, Dr. Torcson said.

"This is now real pay-for-performance," he said, noting that the program is basically an extension of the Hospital Inpatient Quality Reporting program.

CMS Administrator Donald Berwick agreed. "The hospital value-based purchasing program proposal expands upon CMS’ long-standing pay-for-reporting program to reward hospitals not just for reporting data, but for the results of that data," he said.

Hospital quality data have been reported publicly since 2005 at a CMS Web site (www.hospitalcompare.hhs.gov). The quality measures reported for that initiative will be the same under the value-based purchasing program, so every hospitalist will be familiar with these measures, said Dr. Torcson.

The 17 clinical processes of care measures proposed for fiscal 2013 center around acute MI, heart failure, pneumonia, hospital-related infections, and surgical care improvement. Facilities will also be measured on patient satisfaction via the HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems Survey).

For fiscal year 2014, the CMS is proposing to incorporate measures on 30-day mortality; hospital-acquired conditions such as falls, pressure ulcers, and catheter-associated infections; and a variety of patient safety measures.

The program will be funded by a reduction in base operating diagnosis-related group (DRG) payments for each discharge. In fiscal 2013, that reduction will be 1%. At 3 months before the Oct. 1, 2012, start of that fiscal year, the CMS will notify hospitals of the estimated amount they will receive as an incentive payment. On Nov. 1, 2012, they’ll get notice of the exact payment amount.

The CMS will take comments on the proposal until March 8.

A new rule proposed by the Centers for Medicare and Medicaid Services that aims to reward hospitals for quality – above all else – could be a boon for hospitalists, predicted Dr. Patrick Torcson, chair of the Society of Hospital Medicine’s Performance and Standard Committee.

The so-called value-based purchasing program was required under the Affordable Care Act (ACA) and includes proposals for performance standards, a scoring scheme, and suggestions for how the scores could be translated into incentive payments that would first be rewarded to hospitals in the fiscal year beginning Oct. 1, 2012.

It’s unclear exactly how the payments will affect hospital physicians just yet, but "there’s no group better-positioned than hospitalists to help hospitals be successful" under the program, said Dr. Torcson, who practices at the St. Tammany Parish Hospital in Covington, La.

As Dr. Torcson sees it, this program offers "an exciting opportunity for hospitalists to become champions of the hospital-level agenda." The program could give hospitalists leverage in contracting situations. The offer of a team to help the hospital become successful "becomes a leverage point," just as the ability to influence length of stay was a leverage point in the 1990s, he said.

Hospitalists should pay particular attention to how the CMS calculates a bonus payment to the hospital: That payment could end up being the same as – or less or more than –the subsidy a practice receives from the hospital. Hospitals will not balk at the subsidy if the hospitalist physicians can demonstrate how much they contributed to securing the bonus payment, Dr. Torcson said.

"This is now real pay-for-performance," he said, noting that the program is basically an extension of the Hospital Inpatient Quality Reporting program.

CMS Administrator Donald Berwick agreed. "The hospital value-based purchasing program proposal expands upon CMS’ long-standing pay-for-reporting program to reward hospitals not just for reporting data, but for the results of that data," he said.

Hospital quality data have been reported publicly since 2005 at a CMS Web site (www.hospitalcompare.hhs.gov). The quality measures reported for that initiative will be the same under the value-based purchasing program, so every hospitalist will be familiar with these measures, said Dr. Torcson.

The 17 clinical processes of care measures proposed for fiscal 2013 center around acute MI, heart failure, pneumonia, hospital-related infections, and surgical care improvement. Facilities will also be measured on patient satisfaction via the HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems Survey).

For fiscal year 2014, the CMS is proposing to incorporate measures on 30-day mortality; hospital-acquired conditions such as falls, pressure ulcers, and catheter-associated infections; and a variety of patient safety measures.

The program will be funded by a reduction in base operating diagnosis-related group (DRG) payments for each discharge. In fiscal 2013, that reduction will be 1%. At 3 months before the Oct. 1, 2012, start of that fiscal year, the CMS will notify hospitals of the estimated amount they will receive as an incentive payment. On Nov. 1, 2012, they’ll get notice of the exact payment amount.

The CMS will take comments on the proposal until March 8.