Category Archives: Healthcare Payment Reform

Payer reforms; payer initiatives; pay for performance; P4P; Center for Medicaid & Medicare Services; CMS rules; CMS rulings: CMS regulations; RACs program; recovery audit contractors; HACs; hospital-acquired conditions; quality-based; quality of care; quality outcomes; state payment reforms; federal payment reforms

Payment policy bias against high Disproportionate Share Hospitals (DSH)

In its June 2013 report to Congress, MedPAC offered ways to refine the CMS Hospital Readmissions Reduction Program (HRRP). These included issues of stability (and efficiency) due to dealing with multiple condition-specific measures, the calculation of the existing CMS payment penalty, the inverse relationship between readmission and mortality for heart failure rates, and the topic of socioeconomic status (SES) and risk adjustment.

The bias against high Disproportionate Share Hospitals (DSH) apparent in the CMS payment policy is particularly concerning. This comes at a time when Medicare DSH payments are being directly adjusted as part of ongoing reforms and Medicaid DSH payments are being cut nationally in accordance with the Affordable Care Act. This heightened sensitivity brings urgency to the discussion of how to correct for the perceived SES bias, specifically whether measures reflecting SES should be included in the current risk-adjustment formula. If additional measures reflecting SES are to be considered, it will be important to separate the effects that may be attributed to generally lower performance in low income areas from those attributable to the complexities of treating a challenging population. In other words, can the risk adjustment method help us distinguish whether hospitals that care for poorer patients perform worse because they don’t do a good job, or because their patients are more difficult to care for?

Is it advisable to assign providers to risk groups for the purposes of risk adjustment? This blog hopes to answer that question.  Continue reading

Want to Improve Safety? Choose the Right Metrics for Avoidable Readmissions and Complications

In January the Minnesota RARE campaign received the prestigious Eisenberg Award for reducing avoidable readmissions. Over an 18-month period, the campaign helped hospitals and community partners prevent more than six thousand hospital readmissions.

Although each hospital faces its own unique challenges in managing readmissions, the RARE campaign demonstrates what a supportive and collaborative effort can achieve. It involves 82 hospitals, 100 community partners, and 3 operating partners, including the Minnesota Hospital Association. Continue reading

The Healthcare Provider Relay: Why We Need a Patient-focused Episode Payment System

An alien watching a 500 meter relay would think the race is all about the baton. Why else would these beings dedicate themselves to getting this object to its destination as quickly and flawlessly as possible? A relay race would not exist without the baton to bind the individuals together and create a team event. Although each team member’s leg of the race is important, the requirement that the baton be handed from one team member to the next turns four separate runs into a single, unified performance that can be evaluated and rewarded for its overall excellence.

In the relay that is the U.S. healthcare system, the patient is the baton—and the patient baton is not as fortunate as the white plastic one. In the current healthcare set-up, the hospital discharges its responsibility for the patient’s care once it discharges the patient. Then the patient is passed like a baton from one set of provider hands to the next, wobbles and all. Continue reading

Staying Ahead of the Puck: Six Trends to Follow in Population Health and Payment

Yes, this blog post is about population health, accountable care and the changing economics of healthcare payment. But first, a little bit about ice hockey from Walter Gretzky, father of Wayne “The Great One” Gretzky.

When Wayne was a young boy, Walter encouraged his son’s interest in hockey. In the family’s back yard he built an ice rink, the Wally Coliseum, where he taught Wayne and the neighbor kids to skate. Wayne was obsessed with hockey. Walter recalls seven-year-old Wayne’s fascination during a televised hockey match. On a pad of paper, the boy traced the path of the puck as it careened across the ice. To Walter, the lines on the notepad were scribbles. But to Wayne the pattern showed the places on the ice where the puck was most likely to be at any given time. The intersections, as he called them.

That was part of the Great One’s strategy, to know where the puck was most of the time.

In a way, the same strategy applies to accountable care and population health management. Continue reading

Medicare’s Hospital Readmissions Reduction Program: What Happened to Clinical Credibility?

I believe my intentions are good—but probably not. When I download articles from healthcare journals—the meaty ones that can’t be skimmed—to my iPad to read some evening/weekend/plane trip when I run out of other stuff to do, do I really intend to read them? More likely I hope that by some digital alchemy between my documents app and the Amazon Windowshop app next to it I will magically become better informed about my profession.

If you are like me, sort of well intentioned but short on time and motivation to slog through articles that you don’t absolutely have to read, I’ll make you a New Year’s resolution type deal. Each new blog I write, I am going to choose a good-for-you article, read it myself, and tell you about it.

Hopefully this will be good for you and good for me. Good for me since now I have to actually read and understand those articles I never get around to. Good for you since you (if I do my part) will get a decent return on your blog-reading investment: a complex topic made more comprehensible. Continue reading

Is one percent cost savings enough to curb growing healthcare costs?

In a legislative report on the Accountable Care Collaborative (ACC), the Colorado Department of Health Care Policy and Financing details how the program helped the state avoid $44 million in costs during the 2012-2013 fiscal year. That’s less than one percent of the total federal and state spending for Colorado Medicaid this year.

The ACC program has assigned about 350,000 Medicaid clients to patient-centered medical homes. These clients make up about half of Colorado’s Medicaid population. Primary care medical providers and case managers coordinate medical and non-medical care and services within seven regional care collaborative organizations.

The goal is to improve health outcomes within a sustainable care delivery system. Continue reading

OPPS Proposed Rules: Implications of the Government Shutdown

Well, the federal government is back to work after two and a half weeks off. I will refrain from any political comments. However, I would like to discuss the implications it might have on the OPPS changes for 2014.

All comments on the proposed rule were due about the middle of September. Normally CMS would have six to eight weeks to review the comments and publish the final rule on November 1st. However, with the government shutdown, there is not going to be anywhere close to six weeks, let alone eight weeks, to review the comments and publish a final rule.

Our government teams are back, and now the question: What is going to happen with the final rule? Continue reading

Patients Care Less about Process Controls and More about Outcomes

I have a very clever colleague who explains the difference between process measures and outcomes measures in terms of automobile manufacturing. His explanation goes something like this:

Think back to the last time you bought a car. You may have looked at consumer ratings such as J.D. Power Circle Ratings (Personally, I consult Consumer Reports, but my colleague prefers J.D. Powers). You probably wanted to know:

  • Dependability – mechanical problems, repairs and costs in the first three years of ownership
  • Initial quality – problems experienced within the first 90 days of ownership
  • Engine efficiency – miles per gallon Continue reading

CMS is Serious: Two Midnights for Inpatient Medical Necessity

Full disclosure – I’ve spent the better part of the last few weeks reading and analyzing the latest move on CMS’ part to help control observation services – the invention of the Two Midnight Rule or TMR as I like to call it. For those of you who do not spend all your time analyzing regulations, the TMR is not really a bad idea since CMS is using it to try and reduce unnecessary hours and days in observation. On the surface, they are looking to help reduce the higher beneficiary co-pays, but they are also making their auditor’s lives easier and less costly to the Trust Fund. Getting folks on the right path in the first place is much more cost effective than chasing after them to pay attention later on.

CMS held an open call on September 26, 2013 to reiterate their intent of keeping the two midnight plan. During the call, they also announced their ‘Probe and Educate’ plan, which consists of MACs auditing only cases of less than two midnights between October 1 and December 31, 2013. There will be no RAC or MAC audits of two night stays during this time. However, the OIG, ZPIC, etc., can still review any claims they deem necessary during this period – including two midnight stays.

Rather than take you down the long and winding path of how observation services got out of control, I’ll  focus on what TMR means and suggest a few things you can do to survive and thrive under this new requirement. Continue reading

What a Readmission Risk Score Doesn’t Tell You

My husband and I just bought a house, which required that we go through the tedious exercise of applying for a mortgage. As part of the process our lender requested a credit report for both of us. This report included a credit score.

A credit score is a number ranging from 300 to 850. It is calculated based on five categories: payment history, amounts owed, length of credit history, new credit and types of credit used. However the number itself bears no relevance to these categories. It is a single measurement, like weight, that can be either relatively high or low along a scale.

In other words, my credit score does not offer any insight into why I got this score or how it could be changed. Furthermore, it does not take into consideration one significant factor–my husband, whose credit score is different from mine. Continue reading