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© 2008 KPMG LLP, a U.S. limited liability partnership and a ... © 2008 KPMG LLP, a U.S. limited liability partnership and a ... Presentation Transcript

  • ADVISORY HEALTHCARE & PUBLIC SECTOR Medicare FY 2009 IPPS Update and Healthcare Quality Mandates 11 th Annual HFMA Region 11 Healthcare Symposium January 26, 2009 Joe Sellars Carolyn Scott Director, KPMG LLP Director, KPMG LLP Jacksonville, FL Atlanta, GA
  • HEALTHCARE KPMG LLP
    • Medicare FY 2009 IPPS Final Rule
      • Joe Sellars
      • Director, Healthcare Advisory
      • HFMA Region 11 Healthcare Symposium
      • January 26, 2009
  • CMS FY 2009 IPPS Final Rule Significant MS-DRG Payment Changes
  • MS-DRG Reclassifications
    • CMS focused on making significant reforms to IPPS consistent with MedPAC recommendations made in March 2005.
      • Severity of Illness
      • Applying HSRV weights to DRGs
    • Three-year transition period started in FY 2007:
      • Adopted cost-based weights (1/3 cost-based, 2/3 charge-based)
      • 20 new CMS-DRGs created, 32 others modified, 8 deleted; Involved 1.7 million cases in 13 different clinical areas
  • MS-DRG Reclassifications (continued)
    • Medicare Severity DRGs implemented in FY 2008:
      • 745 MS-DRGs adopted, replacing CMS-DRGs
      • Continued transition to cost-based weights (2/3 cost, 1/3 charge)
      • List of Major Diagnostic Categories (MDC) not changed
    • FY 2009:
      • Completion of transition to 100% cost-based weights
  • MS-DRG Reclassifications (continued)
    • CMS subdivided MS-DRG 245 (AICD Lead & Generator Procedures)
      • Created new MS-DRG to separate implantation / replacement of leads from the implantation / replacement of pulse generators
      • MS-DRG 245 re-titled “AICD Generator Procedures”
      • New MS-DRG 265 titled “AICD Lead Procedures”
    • The surgical hierarchy for MDC 5 (Diseases and Disorders of the Circulatory System) was revised
      • MS-DRG 245 was placed above MS-DRG 265
  • Application of Documentation and Coding Adjustment
    • Per CMS, by increasing the number of DRGs and more fully considering severity of illness, the MS-DRGs encourage hospitals to improve their documentation and coding of patient diagnoses.
    • The Secretary of HHS has the authority under the Act to maintain budget neutrality by adjusting the standardized amount to eliminate the effect of changes in coding or classification that do not reflect real changes in case-mix.
      • Documentation and coding adjustment of -0.6 percent in FY 2008, -0.9 percent in FY 2009, consistent with P.L. 110-90 Section 7
  • Application of Documentation and Coding Adjustment (continued)
    • Documentation and coding adjustments are cumulative
      • The FY 2009 documentation and coding adjustment of -0.9 percent is in addition to the -0.6 percent adjustment for FY 2008, yielding a combined effect of -1.5 percent.
    • SCH and MDH providers may be affected in FY 2010
      • CMS considering applying documentation and coding adjustments to FY 2010 hospital-specific rates, including applying the FY 2008 and FY 2009 adjustment percentages in the computation of the FY 2010 adjustment percentage.
  • CMS FY 2009 IPPS Final Rule Charge Compression
  • Charge Compression
    • Beginning in FY 2007, CMS implemented relative weights based on cost report data instead of charge information.
    • CMS developed cost-to-charge ratios (CCR) based on distinct hospital departments. Charges were summed by DRG for each of the 15 cost groups.
    • Transition to cost-based weights raised concerns about potential bias in the weights due to “charge compression”
      • Applying a higher percentage charge markup over costs to lower cost items and services
      • Applying a lower percentage charge markup over costs to higher cost items and services
      • Cost-based weights would undervalue high-cost items and overvalue low-cost items if a single CCR is applied to items of widely varying costs in the same cost center
  • Charge Compression (continued)
    • Contract awarded to RTI in August 2006 to study effects of charge compression.
    • RTI found that a number of factors contribute to charge compression:
      • Inconsistent matching of charges in the Medicare cost report and corresponding charges in MedPAR claims for certain cost centers
      • Inconsistent reporting of costs and charges among hospitals.
        • Some hospitals would report costs & charges for devices and supplies in the Medical Supplies Charged to Patients cost center
        • Others would report these costs and charges in their related ancillary departments such as Operating Room or Radiology
      • RTI’s findings demonstrated that charge compression exists in several CCRs, most notably in Medical Supplies and Equipment.
  • Charge Compression (continued)
    • Longstanding Medicare cost reporting policy has been that hospitals must include the costs and charges of separately “chargeable medical supplies” in the Medical Supplies Charged to Patients cost center, rather than in the Operating Room, Emergency Room or other ancillary cost centers.
    • Transmittal 321, Change Request 5928 was issued 2/29/2008 to inform FIs/MACs of hospital associations’ initiatives to encourage hospitals to modify their cost reporting practices. It was effective March 31, 2008.
    • Form CMS-2552-09 is expected to establish a new Medical Implants Charged to Patients cost center to separate higher-cost implants and devices from the lower-cost supplies that will continue to be reported under Medical Supplies Charged to Patients.
  • Charge Compression (continued)
    • Rather than use the existing criteria set forth in the proposed rule to determine what should be reported in these cost centers, CMS will use revenue codes established by the National Uniform Billing Committee (NUBC) to determine what should be reported
    • The use of the NUBC definitions would not require that the implantable device remain in the patient when the patient is discharged
    • Revenue codes to be reported in “Medical supplies” are:
      • 0270, 0271, 0272 and 0273
    • Revenue codes to be reported in “Implantable Devices” are:
      • 0275, 0276, 0278 and 0624
    • CMS has to revise the cost report (2552-09) to accomplish this change. Revisions are not expected to be available until Spring 2009.
  • CMS FY 2009 IPPS Final Rule Preventable Hospital-Acquired Conditions (HACs) and Present on Admissions (POAs)
  • Preventable Hospital-Acquired Conditions (HACs)
    • In a 1999 report titled “To Err is Human: Building a Safer Health System”, the Institute of Medicine noted the following:
      • Medical errors and HACs caused by medical errors are a leading cause of morbidity and mortality in the U.S.
      • The number of Americans who die each year as a result of medical errors that occur in hospitals may be as high as 98,000
      • Total national costs of these errors due to lost productivity, disability and health care costs were estimated at $17 billion to $29 billion
  • Preventable Hospital-Acquired Conditions (HACs)
    • Other organizations’ findings:
      • In 2000, the CDC estimated that hospital-acquired infections added nearly $5 billion to U.S. health care costs every year
      • A 2007 study published in the March-April 2007 issue of Public Health Reports found that, in 2002, 1.7 million hospital-acquired infections were associated with 99,000 deaths
      • A 2007 Leapfrog Group Hospital Survey of 1,256 hospitals found that 87% of those hospitals do not follow recommendations to prevent many of the most common hospital-acquired infections
  • Preventable Hospital-Acquired Conditions (HACs)
    • Combating HACs, including infections:
      • In 2005, Congress authorized CMS to adjust Medicare IPPS hospital payments to encourage the prevention of these conditions
      • This is part of an array of Medicare value-based purchasing (VBP) tools to promote increased quality and efficiency of care:
        • Measuring performance
        • Payment incentives
        • Publicly reporting performance results
        • Applying national and local coverage policy decisions
        • Enforcing conditions of participation
        • Providing direct support for providers through Quality Improvement Organization (QIO) activities
      • “ CMS’ application of VBP tools… is transforming Medicare from a passive payer to an active purchaser of higher value health care services”
  • Preventable Hospital-Acquired Conditions (HACs)
    • Combating HACs, including infections (continued):
      • The President’s FY 2009 budget outlines another approach for addressing serious preventable adverse events, or “never events”, including HACs:
        • Prohibit hospitals from billing the Medicare program for “never events” and prohibit Medicare payment for these events
        • Require hospitals to report occurrence of these events or receive a reduced annual update
  • Preventable Hospital-Acquired Conditions (HACs)
    • Examples of how an MS-DRG might be paid:
    $6,177.43 Y Principal Diagnosis: Intracranial hemorrhage or cerebral infarction (stroke) with CC – MS-DRG 065 Example Secondary Diagnosis: Dislocation of patella – open due to a fall (code 835.6 (CC)) $5,347.98 N Principal Diagnosis: Intracranial hemorrhage or cerebral infarction (stroke) with CC – MS-DRG 065 Example Secondary Diagnosis: Dislocation of patella – open due to a fall (code 835.6 (CC)) $5,347.98 -- Principal Diagnosis: Intracranial hemorrhage or cerebral infarction (stroke) without CC/MCC – MS-DRG 066 Average Payment (Based on 50 th percentile) Present on Admission (Status of Secondary Diagnosis) Service: MS-DRG Assignment: (Operating amounts for a hospital whose wage index is equal to the national average) (Examples below with CC/MCC indicate a single secondary diagnosis only)
  • Preventable Hospital-Acquired Conditions (HACs)
    • Examples of how an MS-DRG might be paid (continued):
    $8,030.28 Y Principal Diagnosis: Intracranial hemorrhage or cerebral infarction (stroke) with MCC – MS-DRG 064 Example Secondary Diagnosis: Stage III pressure ulcer (code 707.23 (MCC)) $5,347.98 N Principal Diagnosis: Intracranial hemorrhage or cerebral infarction (stroke) with CC – MS-DRG 065 Example Secondary Diagnosis: Stage III pressure ulcer (code 707.23 (MCC)) Average Payment (Based on 50 th percentile) Present on Admission (Status of Secondary Diagnosis) Service: MS-DRG Assignment: (Operating amounts for a hospital whose wage index is equal to the national average) (Examples below with CC/MCC indicate a single secondary diagnosis only)
  • Preventable Hospital-Acquired Conditions (HACs)
    • HACs selected per FY 2009 Final Rule:
      • Foreign Object Retained After Surgery
      • Air Embolism
      • Blood Incompatibility
      • Stage III & IV Pressure Ulcers
      • Falls and Trauma:
        • Fractures
        • Dislocations
        • Intracranial Injuries
        • Crushing Injuries
        • Burns
        • Electric Shocks
  • Preventable Hospital-Acquired Conditions (HACs)
    • HACs selected per FY 2009 Final Rule (continued)
      • Catheter-Associated Urinary Tract Infection (UTI)
      • Vascular Catheter-Associated Infection
      • Manifestations of Poor Glycemic Control
      • Surgical Site Infection – Mediastinitis after Coronary Artery Bypass Graft (CABG)
  • Preventable Hospital-Acquired Conditions (HACs)
    • HACs selected per FY 2009 Final Rule (continued)
      • Surgical Site Infections Following Certain Orthopedic Procedures
      • Surgical Site Infection Following Bariatric Surgery for Obesity
      • Deep Vein Thrombosis (DVT) / Pulmonary Embolism (PE) Following Certain Orthopedic Procedures
  • Sample Group of Five Washington State Hospitals – Preventable Hospital-Acquired Conditions (HACs)
    • NOTE: This slide presents a WORST-CASE scenario using the claims in the FY2007 MedPAR data. The MedPAR data does not include Present On Admission (POA) indicators. Therefore, the estimated impact is based upon the assumption that none of the HAC diagnosis codes in the MedPAR data were POA. In addition, this slide includes only those occurrences of HACs with no other qualifying CCs/MCCs present, thereby resulting in reduced payment.
  • Sample Group of Five Washington State Hospitals – Preventable Hospital-Acquired Conditions (HACs)
    • NOTE: This slide presents a WORST-CASE scenario using the claims in the FY2007 MedPAR data. The MedPAR data does not include Present On Admission (POA) indicators. Therefore, the estimated impact is based upon the assumption that none of the HAC diagnosis codes in the MedPAR data were POA. In addition, this slide includes only those occurrences of HACs with no other qualifying CCs/MCCs present, thereby resulting in reduced payment.
  • Sample Group of Five Washington State Hospitals – Preventable Hospital-Acquired Conditions (HACs)
    • NOTE: This slide presents a WORST-CASE scenario using the claims in the FY2007 MedPAR data. The MedPAR data does not include Present On Admission (POA) indicators. Therefore, the estimated impact is based upon the assumption that none of the HAC diagnosis codes in the MedPAR data were POA. In addition, this slide includes only those occurrences of HACs with no other qualifying CCs/MCCs present, thereby resulting in reduced payment.
  • Sample Group of Five Washington State Hospitals – Preventable Hospital-Acquired Conditions (HACs) – Occurrences of HAC DX Codes in Cases Still Qualifying for CC/MCC DRGs
    • NOTE: This slide presents a WORST-CASE scenario using the claims in the FY2007 MedPAR data. The MedPAR data does not include Present On Admission (POA) indicators. The cases described on this slide (as opposed to the three previous slides) are those that still have a qualifying CC / MCC present after the HAC CC / MCC DX codes HACs have been eliminated.
  • Present On Admission (POA) Indicator Reporting
    • To identify which conditions were acquired during hospitalization for the HAC payment provision
    • For broader public health uses of Medicare data
  • Present On Admission (POA) Indicator Reporting
    • Five POA indicators are defined in the FY 2009 Final Rule:
      • “ Y” – condition present on admission.
      • “ W” – affirms that provider has determined, based on data and clinical judgment, that it is not possible to document when onset of condition occurred.
      • “ N” – condition not present on admission
      • “ U” – insufficient medical record documentation to determine if condition was POA
      • “ 1” – Signifies exemption from POA reporting. CMS established this code as a workaround to blank reporting on the electronic 4010A1. A list of exempt ICD-9-CM diagnosis codes is available in the ICD-9-CM Official Coding Guidelines .
    • CMS will pay CC/MCC MS-DRGs only for HACs coded with “Y” and “W” indicators. CMS plans to analyze all indicators for appropriateness of use.
  • CMS FY 2009 IPPS Final Rule Other Decisions and Changes – Standard Payment Rates
  • Standard Payment Rates
    • FY 2009 market basket update factors:
      • Full Update 3.6% (Proposed was 3%)
      • Reduced Update 1.6%
    • As required by the Medicare TMA, Abstinence Education, and QI Programs Extension Act of 2007, CMS will reduce the payment rates by another -0.9 percent for FY2009. Cumulative effect is -1.5 percent (0.06 percent in FY2008)
    • Hospitals must have successfully reported quality measures in FY 2008 to receive the FY 2009 full update
  • Standard Payment Rates
    • National Adjusted Operating Standardized Amounts (excluding Puerto Rico)
    S $1,911.17 $3,118.23 $1,948.80 $3,179.61 38% 62% 2009 (Wage Index <=1) $1,523.91 $3,505.49 $1,553.91 $3,574.50 30.3% 69.7% 2009 (Wage Index > 1) $1,859.71 $3,034.28 $1,896.43 $3,094.17 38% 62% 2008 (Wage Index <=1) $1,482,87 $3,411.10 $1,512.15 $3,478.45 30.3% 69.7% 2008 (Wage Index > 1) Reduced Update Nonlabor-related Reduced Update Labor-related Full Update Nonlabor-related Full Update – Labor-related Nonlabor Share Percent Labor Share Percent Fiscal Year
  • Standard Payment Rates
    • Capital Standard Federal Payment Rate (excluding Puerto Rico)
    • Outlier Threshold
    S $424.17 2009 $426.14 2008 Fiscal Year $20,045 2009 $22,185 2008 Fiscal Year
  • Sample Group of Five Washington State Hospitals – Operating and Capital Payment Rates
    • For FY08 vs. FY09 comparisons using 2007 MedPAR claims data
    • SOURCE: FY2008 and FY2009 Medicare Impact Files (from CMS website)
  • Sample Group of Five Washington State Hospitals – Outlier Payment Factors
    • For FY08 vs. FY09 comparisons using 2007 MedPAR claims data
    • SOURCE: FY2008 and FY2009 Medicare Impact Files (from CMS website)
  • Summary of FY2008 vs. FY2009 Impact Total Payment and DRG Amount Only
  • Summary of FY2008 vs. FY2009 Impact Capital and Outlier Payments
  • CMS FY 2009 IPPS Final Rule Other Decisions and Changes – Phase-out of Capital IME
  • Phase-out of the Capital Teaching (IME) Adjustment
    • CMS has indicated that the statutory history of the Capital IPPS suggests that the system in the aggregate should not provide for continuous, large positive margins
    • CMS concluded that the record of relatively high, persistent positive margins for teaching hospitals under Capital IPPS indicated that the teaching adjustment is unnecessary
    • CMS also believes that abrupt changes in payment policy should be mitigated and that time should be provided to hospitals to adjust to changes in Medicare payments
  • Phase-out of the Capital Teaching (IME) Adjustment
    • With the FY 2008 IPPS final rule with comment period, CMS adopted a policy to phase out the capital teaching adjustment over a three-year period:
      • The adjustment was maintained for FY 2008
      • For FY 2009, the formula for the adjustment was revised so that teaching adjustments will be reduced by half
      • For FY 2010 and after, hospitals will no longer receive a teaching adjustment under Capital IPPS
      • Requires subscripting column 1 of Worksheet L Part I to separate DRG payments and Capital IME factors into before 10/1 and on/after 10/1 portions
  • Sample Group of Three Washington State Teaching Hospitals – Capital Payment Rates
    • For FY08 vs. FY09 comparisons using 2007 MedPAR claims data
    • SOURCE: FY2008 and FY2009 Medicare Impact Files (from CMS website)
  • Summary of FY2008 vs. FY2009 Impact Capital and Capital IME Payments
  • Joseph W. Sellars KPMG LLP 904-350-1234 [email_address] The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. ©2008 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
  • HEALTHCARE KPMG LLP
    • Healthcare Quality Mandates – From the CMS IPPS Final Rule and Beyond
      • Carolyn Scott, RN, M.Ed., MHA
      • Director, Healthcare Advisory
      • HFMA Region 11 Healthcare Symposium
      • January 26, 2009
  • Presentation Outline
    • Hospital Quality Reporting – Core Measures and Beyond
    • The next big focus: Hospital Readmissions
    • Medicare’s Value Based Purchase Program – Update
    • A Hot Topic in Healthcare Quality: Organization-wide Throughput
    • Physician Quality Reporting
    • Leadership’s Role and Accountability for Healthcare Quality
  • Healthcare Quality
    • How is it defined ?
    • To what extent do hospital leaders recognize that reimbursement is now tied to healthcare quality ?
    • Do you know the difference between hospital acquired conditions and “never events” ?
    • Who has responsibility for a hospital’s quality and safety?
    • How accurate is your organization’s quality information?
    • What regulatory activities impacting healthcare quality reporting and performance are on the horizon?
    • What are hospital leaders’ responsibilities regarding healthcare quality at your organization?
  • Hospital Quality Reporting – Core Measures and Beyond
  • Progression in the Number of Quality Measures for Reporting/Payment Update
    • FY 2005 - 2006 – 10 measures
    • FY 2007 – 21 measures
    • FY 2008 – 27 measures
    • FY 2009 – 30 measures
    • FY 2010 – 44 measures (so far)
    • FY 2011 – ??? – expect another increase in the number of measures to be reported
  • Quality Reporting for 2008
    • To avoid the 2% reduction in the payment update, hospitals had to submit quality data for 27 different metrics – all from 2007 plus 6 new ones
    • New Metrics for 2008
      • HCAHPS Survey Results
      • Surgical Care Improvement Project (“SCIP”)
        • VTE prophylaxis ordered
        • VTE prophylaxis given within 24 hours of surgery
        • Appropriate antibiotic selection for surgery patients
      • 30-Day Mortality Results
        • AMI Patients
        • Heart Failure Patients
  • AMI Performance (January 2007 – December 2007) Source: www.hospitalcompare.hhs.gov Indicator Top 10% Hospitals National Average ASA @ Arrival 100% 94% ASA @ Discharge 100% 91% ACEI/ARB for LVSD 100% 88% Smoking Cessation Advice/Counseling 100% 92% BBlocker @ Discharge 100% 92% BBlocker @ Arrival 100% 89% Fibrinolytics w/in 30 minutes 100% 40% PCI w/in 90 minutes 92% 67%
  • Heart Failure Performance (January 2007 – December 2007) Source: www.hospitalcompare.hhs.gov. Indicator Top 10% Hospitals National Average Discharge Instructions 97% 69% LVS Assessment 100% 87% ACEI/ARB for LVSD 100% 87% Smkg Cessation Advice/Counseling 100% 89%
  • Pneumonia Performance (January 2007 – December 2007) Source:www.hospitalcompare.hhs.gov ** denotes measure in effect commencing with 4/1/07 discharges Indicator Top 10% Hospitals National Average O2 Assessment 100% 99% Pneumococcal Scrng/Immun. 95% 78% ED BCult Before 1 st Antibiotic 100% 90% Smkg Cessation Advice/Counseling 100% 85% Antibiotic within 6 hours** 100% 93% Appropriate Initial Antibiotic 97% 87% Influenza Screening/Immun. 99% 75%
  • Surgical Care Improvement Performance (October 2006 – September 2007) 82% 97% Antibiotics Discontinued within 24 Hours after Surgery End (48 Hours for Cardiac Surgery) 80% 97% Patients whose doctors ordered treatment to prevent blood clots for selected surgeries 77% 95% Patients who received treatment for blood clots within 24 hours before or after surgery for selected surgery types 91% 99% Appropriate Antibiotic Selection for Surgery Type 84% 97% Antibiotic Start within 1 Hour of Surgical Incision National Average Top 10% Hospitals Indicator
  • 30 Day Mortality Results
    • How do hospitals in your state perform?
    • Primary goal – improve coordination of patient care
      • Within the hospital setting
      • At the time of discharge
    • Next big area of focus for coordination of care: Hospital Readmissions
  • HCAHPS Survey
    • Components
      • Nurse communication
      • Physician communication
      • Responsiveness of hospital staff
      • Pain management
      • Communication about medications
      • Discharge information
      • Overall rating of hospital (0 – 10)
      • Likelihood to recommend hospital (Definitely no – Definitely yes)
    • Overall Goal: Continually improve quality of care
  • HCAHPS Performance Results 68% Likelihood to Recommend 6.4 Overall Rating (0-10) 80% Discharge Information 56% Quietness at Night 70% Cleanliness of Room/Bathroom 59% Communication about Medications 68% Pain Management 63% Responsiveness of Hospital Staff 80% Physician Communication 74% Nurse Communication US Average Indicator
  • HCAHPS Oversight Process - Background, Implications, and Future Activities
    • Hospitals and survey vendors must participate in quality oversight process conducted by the HCAHPS project team ( source: FY 2008 IPPS Final Rule )
      • Commencing in July 2007, CMS asked hospitals and survey vendors to correct any problems that were identified and to provide for review documentation of corrections
      • HCAPHS project staff reviews and discusses findings with hospitals and survey vendors
        • Quality Assurance Plans
        • Survey Management Procedures
        • Sampling and Data Collection Protocols
        • Data Preparation and Submission Procedures
    • If the HCAHPS project team finds that the hospital has not made the corrections, “ CMS may determine that the hospital is not submitting HCAHPS data that meet the requirements for the RHQDAPU program ”
    • No significant change in oversight process planned for FY 2009 or 2010
  • Quality Reporting for 2009
    • To avoid the 2% reduction in the payment update, hospitals must submit quality data for at least 30 different metrics – all from 2008 plus three new ones
    • New Metrics for 2009
      • Surgical Care Improvement Project (“SCIP”)
        • Cardiac surgery patients with controlled 6am glucose 24 hours post surgery
        • Surgery patients with appropriate hair removal
      • 30 Day Mortality Results – Pneumonia Patients
    • Outpatient Measures (Heart Attack and Surgical Measures Released November 1, 2007 and new Imaging Measures in the Final OPPS Proposed Rule)
  • Hospital Quality Measures in the 2009 OPPS Final Rule
    • For hospitals to receive the full OPPS payment updated for CY 2010, hospitals must submit quality data on the following for services rendered in the outpatient setting
      • OP 1 – Median Time to Fibrinolysis
      • OP 2 – Fibrinolytics Received within 30 Minutes of Arrival
      • OP 3 – Median Time to Transfer to Another Facility for Acute Coronary Intervention
      • OP 4 – Aspirin at Arrival
      • OP 5 – Median Time to Electrocardiogram (ECG)
      • OP 6 - Timing of Antibiotic Prophylaxis
      • OP 7 – Prophylactic Antibiotics for Surgical Patients
      • OP 8 – MRI Lumbar Spine for Low Back Pain
      • OP 9 – Mammography Follow-up Rates
      • OP 10 – Abdomen CT – Use of Contrast Material
      • OP 11 – Thorax CT – Use of Contrast Material
  • Quality Reporting for 2010
    • To avoid the 2% reduction in the payment update, hospitals must submit/allow CMS to report quality data for at least 42 different metrics
    • New Metrics for 2010
      • Surgical Care Improvement Project - 1 measure (Beta Blocker)
      • Readmissions – 1 measure (Heart Failure)
      • AHRQ Patient Safety Indicators, Inpatient Quality Measures and Composite Measure – 9 measures
      • Nursing Sensitive – 1 measure (Failure to Rescue)
      • Cardiac Surgery – 1 measure (Database Participation)
    • One measure from 2009 will be retired and not reported by hospitals for 2010 (PN measure – Oxygenation Assessment)
    • Items in yellow are measures for which data will be collected from Medicare claims
  • Quality Reporting for 2011 and Beyond
    • Additional measures being considered
      • Those that were proposed for 2010 but didn’t make the final list
      • COPD Measures
      • Complications of Vascular Surgery
      • Timeliness of Emergency Care
      • Additional Surgical Care Improvement Project measures
      • HACs/Complications
      • Cancer Care
      • Length of Stay coupled with Global Readmissions Measures
      • More Glycemic Control Measures
    • Specific focus of future measures
      • Surgical care
      • Patient outcomes
      • Patient safety
      • Efficiency
  • CMS Perspective –Reducing the Data Collection Burden
    • Staggering the data collection start dates
    • Allowing the data to come from other sources (e.g., registries)
    • CMS collecting some of the data from Medicare claims
    • Some proposed relief for hospitals that have less than five cases of a specific condition in a quarter (e.g., AMI, HF)
  • Hospital Readmissions
  • Making the Case: Readmission Statistics
    • Medicare spends $15 billion each year on readmissions
    • Approximately 18% of Medicare patients discharged from hospitals are readmitted within 30 days
    • 80% of Medicare spending for readmissions is potentially avoidable
    • Source: Medicare Payment Advisory Commission: Report to Congress: Promoting Greater Efficiency in Medicare. June 2007, Chapter 5, page 103.
  • CMS Perspectives
    • Readmissions may reflect poor quality of care
    • Readmissions may affect beneficiaries’ quality of life
    • Not all readmissions are avoidable
    • Hospitals should share accountability for readmission rates
    • Readmission rates could be lower through the application of evidence-based practices
    • Application of incentives may serve to reduce readmissions, resulting in
      • Higher quality of care
      • Reduction in unnecessary costs
  • Comments Received on Use of Incentives to Reduce Avoidable Readmissions
    • Approaches to applying incentives to reduce avoidable readmissions
      • Direct adjustment to hospital DRG payments (similar to HACs)
      • Adjustments to hospital DRG payments through a performance-based payment methodology (similar to VBP)
      • Public reporting of readmission rates
    • Measures of readmissions
    • Accountability
  • Medicare’s Value Based Purchasing (VBP) Program – Update
  • Medicare’s VBP Program
    • Premise of VBP: CMS will no longer be a transactional purchaser of healthcare services; it is moving to being an active purchaser of quality healthcare services
    • Authorized as part of the Deficit Reduction Act of 2005
    • Links payment with quality, rather than for just the delivery of service
    • Replaces the current hospital quality reporting system
    • Encompasses both public reporting and financial incentives to drive improvements in clinical quality, patient centeredness, and efficiency
    • Commences in fiscal year 2009 – will require additional legislation
  • Goals of Medicare’s VBP Program
    • Improve clinical quality
    • Address problems of overuse, underuse, and misuse of services
    • Encourage patient-centered care
    • Reduce adverse events and improve patient safety
    • Avoid unnecessary costs in the delivery of care
    • Stimulate investments in structural components and the reengineering of care system-wide
    • Make performance results transparent to and useable by consumers
    • Avoid new/reduce existing disparities in healthcare
  • Other VBP Details – Currently in Development
    • Payments at Two Levels
      • Top decile performers
      • Overall improvement
    • Potential reduction in DRG payment – 2–5 percent – with opportunity to “earn back” based on performance on the quality metrics
    • VBP Implementation
      • Phased Approach
        • FY 2009 – Payment based 100 percent on reporting
        • FY 2010 – Payment based 50 percent on reporting and 50 percent on performance
        • FY 2011 – Payment based 100 percent on performance
    • Additional Impacts on Hospitals
      • Data submission time reduced from 135 days to 60 days after quarter-end
      • Increased validation efforts by CMS
  • VBP Candidate Measures for 2009
    • Clinical quality measures
    • Outcomes measures
      • 30-day AMI mortality
      • 30-day Heart Failure mortality
    • HCAHPS Survey results
    • Yet to be determined outpatient measures (good source – those in the 2008 OPPS Final Rule)
    • Note: Measures noted in blue on the following pages are initial candidate measures in the VBP Program
  • AMI Performance (January 2007 – December 2007) Source: www.hospitalcompare.hhs.gov Indicator Top 10% Hospitals National Average ASA @ Arrival 100% 94% ASA @ Discharge 100% 91% ACEI/ARB for LVSD 100% 88% Smoking Cessation Advice/Counseling 100% 92% BBlocker @ Discharge 100% 92% BBlocker @ Arrival 100% 89% Fibrinolytics w/in 30 minutes 100% 40% PCI w/in 90 minutes 92% 67%
  • Heart Failure Performance (January 2007 – December 2007) Source: www.hospitalcompare.hhs.gov. Indicator Top 10% Hospitals National Average Discharge Instructions 97% 69% LVS Assessment 100% 87% ACEI/ARB for LVSD 100% 87% Smkg Cessation Advice/Counseling 100% 89%
  • Pneumonia Performance (January 2007 – December 2007) Source:www.hospitalcompare.hhs.gov ** denotes measure in effect commencing with 4/1/07 discharges Indicator Top 10% Hospitals National Average O2 Assessment 100% 99% Pneumococcal Scrng/Immun. 97% 78% ED BCult Before 1 st Antibiotic 100% 90% Smkg Cessation Advice/Counseling 100% 85% Antibiotic within 6 hours** 100% 93% Appropriate Initial Antibiotic 97% 87% Influenza Screening/Immun. 99% 75%
  • Surgical Care Improvement Performance (January 2007 – December 2007) 82% 97% Antibiotics Discontinued within 24 Hours after Surgery End (48 Hours for Cardiac Surgery) 80% 97% Patients whose doctors ordered treatment to prevent blood clots for selected surgeries 77% 95% Patients who received treatment for blood clots within 24 hours before or after surgery for selected surgery types 91% 99% Appropriate Antibiotic Selection for Surgery Type 84% 97% Antibiotic Start within 1 Hour of Surgical Incision National Average Top 10% Hospitals Indicator
  • 30 Day Mortality Results
    • AMI
    • Heart Failure
    • Pneumonia
  • HCAHPS Performance Results 68% Likelihood to Recommend 6.4 Overall Rating (0-10) 80% Discharge Information 56% Quietness at Night 70% Cleanliness of Room/Bathroom 59% Communication about Medications 68% Pain Management 63% Responsiveness of Hospital Staff 80% Physician Communication 74% Nurse Communication US Average Indicator
  • VBP Measures for Fiscal Years 2010 and Beyond
    • FY 2010–FY2011
      • Efficiency measures
      • Outcomes measures
      • Emergency care measures
      • Care coordination measures
      • Patient safety measures
      • Structural measures
    • FY 2012 and Beyond
      • Areas where performance gaps are identified
      • New measures currently in development
  • VBP Testing
    • Workgroup is currently testing the VBP Plan
    • Information to be gained from the VBP testing
      • Performance scores by domain
      • Total performance scores
      • Financial impacts
    • Comments noted in the Final Rule
      • Most objected to publicly posting test information at the hospital level
      • Most believed test results should be provided to the hospital at the hospital level
      • Most supported public reporting of test results at an aggregate level (e.g., State or National)
  • A Hot Topic in Healthcare Quality: Organization-Wide Throughput
  • Making the Connection between Organization-wide Throughput and Healthcare Quality
    • Joint Commission
      • New for 2008 – hospital-specific tracer on patient flow
      • Rationale: Patient safety
        • Treatment delays, medical errors, and unsafe practices “thrive” during times of patient congestion and can lead to sentinel events
      • Focus: Organization-Wide
      • Areas First Impacted: ED, OR, ICU
      • Accountability: Hospital Leadership
  • Making the Connection between Organization-wide Throughput and Healthcare Quality (cont’d.)
    • National Quality Forum (NQF)
      • National Voluntary Consensus Standards for Emergency Care – Phase 2
        • NQF is formally considering measures that address pressing quality issues such as patient wait-time, overcrowding, boarding, and diversions (source:www.qualityforum.org)
      • Other “efficiency-related” projects and measures in development
    • CMS – VBP
      • Emergency care and “efficiency” are program domains and will have specific measures
  • Making the Connection between Organization-Wide Throughput and Healthcare Quality (cont’d.)
    • Media
      • “ Tucson Emergency Rooms in Life and Death Crunch” ( source: Arizona Daily Star, March 16, 2008)
        • 39 year-old man dies after waiting in a crowed ED waiting room for 8 hours
    • Consumers
      • HCHAPS Survey Results
        • Likelihood to recommend hospital
        • Overall rating of hospital
      • Word of Mouth
  • Physician Quality Reporting Initiative
  • Overview of PQRI – 2007
    • CMS given the authority to establish this initiative via the Tax Relief and Healthcare Act of 2006
    • “Eligible professionals” had the potential for receiving a bonus, which could be up to 1.5 percent of the total allowed charges for services paid pursuant to the Medicare Physician Fee Schedule
      • Lump sum bonus to be paid to eligible professionals during mid-2008
    • Reporting was for activity from July 1 – December 31, 2007
    • Reporting was all “claims based”
    • 74 metrics included in the metric set – professionals submit information only on those metrics that apply to his/her practice
      • Reporting for at least 80% of the cases that apply to the appropriate metrics
  • Results from 2007
    • More than 70,000 NPI/TINs submitted quality data for one measure (more than 109,000 attempted to submit data)
    • 56,722 NPI/TINs received an incentive payment
      • Average payment per individual - $630
      • Average payment per group - $4,713
      • Total payment amount - $36 million
      • Providers in all 50 states plus D.C., Puerto Rico, Virgin Islands, and Guam participated in the program
      • Florida (over $3 million) and Illinois (over $2 million) received the highest incentive payments
    • Feedback reports regarding performance became available around the same time as the incentive payments were made
    (Source: QUADAX, Inc. Newsletter, August 2008)
  • PQRI for 2008
    • Legislative authority given through the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA), which was enacted on December 29, 2007
    • Program Timeframe: January 1 – December 31, 2008
    • No significant change in the bonus payment percentage from 2007 (1.5%)
    • 119 measures included in the metric set – all process measures except 2 (EHRs and E-prescribing)
    • New aspect for the program – reporting can be claims or registry based (32 registries already approved)
  • PQRI for 2009 and Beyond
    • Starting in 2009, the PQRI incentive payment increases to 2%
    • Expands the list of “eligible providers” to include audiologists
    • New and additional incentives for E-prescribing starting in 2009 (2%)
      • This incentive will decline over 2011 and 2012
      • Plan for the future: Penalties for not E-prescribing
    • Additional information regarding the 2009 PQRI program will be included in the 2009 Medicare Physician Fee Schedule
  • Leadership’s Role and Accountability for Healthcare Quality
  • Corporate Responsibility and Healthcare Quality
    • Quality oversight is part of the Board’s fiduciary duty
    • Increased focus on accuracy of quality reporting data
      • Core Measure data to CMS
      • PQRI data to CMS
      • Sentinel Event information to Joint Commission
    • Increased attention on “provision of care that is so deficient it amounts to no care at all”
    • Remedies available
      • Civil money penalties
      • Criminal fines
      • Exclusion from federal health care programs (Medicare and Medicaid)
      • (Source: Corporate Responsibility and Health Care Quality: A Resource for Healthcare Boards of Directors, United States Department Health and Human Services Office of Inspector General and American Health Lawyers Association. www.oig.hhs.gov.)
  • Recent Regulatory Actions Related to Healthcare Quality
    • “Hospital Fined in Wrong Site Surgery” (source: Rhode Island News , November 27, 1907)
      • Hospital fined $50,000 after third wrong site neurosurgery
    • “California Hospitals Fined for Not Ensuring Patient Safety” (source: Modern Healthcare’s Daily Dose , August 18, 2008)
      • 18 hospitals fined $25,000 per violation
    • “Yale-New Haven Fined $8,000 for Violations” (source: New Haven Register , October 2, 2008)
      • State Health Department issues fine and Consent Agreement based on safety and quality issues
    • “State Reprimands Miriam Hospital for Wrong Site Surgery” (Source: Rhode Island News, October 8, 2008 )
      • Hospital enters into a Consent Agreement with the Rhode Island Department of Health regarding surgical quality deficiencies
  • Carolyn Scott, RN, M.Ed., MHA KPMG LLP 817-800-6504 [email_address] The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. ©2008 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
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