SPECIAL REPORT:
Value Based Purchasing
Hospital Program FY 13
Final Rule
August 7, 2012
Washington Strategic Consulting
1825 Eye Street, NW, Suite #600
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Introduction
On August 2, 2012, the Centers for Medicare and Medicaid (CMS) released the FY 2013 inpatient prospective payment system (PPS) final rule, which included a number of policies related to the Hospital Value Based Purchasing Program (HVBP) for hospitals, clinicians, and other stakeholders. Much of the Rule’s 250 pages pertaining to the HVBP relates to the development of methodology used to calculate bonus payments and reductions required by the program. The Rule also makes a number of technical, clarifying changes to the appeals process and public disclosure requirements.
Background
The HVBP, created by the Affordable Care Act, requires the Secretary of HHS to establish a system under which incentive payments are made in a fiscal year (starting with discharges occurring on or after October 1, 2012) to hospitals that meet performance standards. The bonus payments will be paid out of a pool established by a mandatory reduction (aka Adjustment Factor) in hospital payments.
Incentive payments will be based on each hospital’s value-based payment percentage on the hospital’s Total Performance Score (TPS) for a specified performance period. The total amount available for incentive payments for a fiscal year will be equal to the total amount of the payment reductions for all participating hospitals for such fiscal year.
For FY 2013, the available funding pool will be equal to 1.00 percent of the base-operating DRG payments to all participating hospitals, and the size of the applicable percentage will increase to 1.25 percent for FY 2014, 1.50 percent for FY 2015, 1.75 percent for FY 2016, and 2.0 percent for FY 2017 and successive fiscal years.
Calculating Performance
CMS adopted 13 performance measures in the VBPP final rule issued in 2011. To determine whether a hospital meets or exceeds the performance standards for these measures, as required by the FY 2013 IPPS Rule, CMS will assess each hospital’s achievement, as well as its improvement compared with its performance during a 3-quarter baseline period from July 1, 2009 through March 31, 2010.
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performance (if applicable) into a claims processing systems in January 2013, and these adjustments will apply to FY 2013 discharges.
Public Disclosure
The Rule implements a plan for CMS to report data it collects from participating hospitals on each measure on the Hospital Compare web site for at least one year prior to the beginning of the performance period for the measure under the Hospital VBP Program.
Payment Reductions (Adjustment Factor)
The ACA instructs CMS to reduce the base operating DRG payment amount for a hospital for each discharge in a fiscal year by an applicable percent. The sum total of these reductions in a fiscal year must equal the total amount available for value-based incentive payments for all eligible hospitals for the fiscal year, as estimated by HHS.
The final rule states that, beginning with FY 2013 discharges, every hospital will receive a reduction to its base operating DRG payment amount for each discharge in a fiscal year, regardless of whether CMS has determined that the hospital has earned a value-based incentive payment for that fiscal year. The total amount of the reductions across all eligible hospitals for a fiscal year would constitute the total amount available from which CMS could make value-based incentive payments for that fiscal year.
The data CMS will to use to estimate these amounts is inpatient claims data from the Medicare Provider Analysis and Review (MedPAR) file. CMS will run the MedPAR data for purposes of estimating the base operating DRG payment reduction amounts, as well as the size of the funding pool that will apply to a fiscal year, in December of the previous fiscal year so that CMS can provide preliminary estimates in the IPPS/LTCH PPS proposed rule. The data will contain inpatient claims information related to discharges from the fiscal year that ended the previous September.
The rule allows for the application of an inflation factor so that the estimate of the available pool of funds will more accurately reflect estimated total base operating DRG payments in the fiscal year in which the value-based incentive payments will actually be made. The final estimate for FY 2013, based on the March, 2012 update to the FY 2011 MedPAR file, is $963 million.
Methodology to Calculate Adjustment Factor
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Timing of Adjustment Factor
The rule requires that CMS not apply the 1.00 percent applicable reduction to the base operating DRG payment amount for each discharge until CMS applies the value-based incentive payment adjustment factor. In other words, CMS would add the value-based incentive payment amount to the hospital’s reduced base-operating DRG payment amount for each FY 2013 discharge at the same time that it apply the 1.00 percent reduction to the base operating DRG payment amount. This would prevent hospitals from receiving a 1.00 percent reduction to their base operating DRG payment amounts before they receive their value-based incentive payment amount adjustment. Accordingly, under the Rule, beginning in January 2013, a hospital would receive a base operating DRG payment amount for each discharge occurring in FY 2013 that is the net result of the application of the 1.00 percent reduction and the application of the hospital’s individual value-based incentive payment amount adjustment.
Public Disclosure
The Rule requires that each hospital has the opportunity to review, and submit corrections for, the information to be made public with respect to each hospital prior to such information being made public. The Rule provides for a period of 30-days to review and submit corrections for the claims-based measure rates contained in their confidential reports. This 30-day period would begin the day hospitals’ confidential reports and accompanying discharge-level data are posted to QualityNet.
Outcome Measures
Set out below is a complete list of the measures adopted for the HVBP for FY 2013, 2014 and 2015. Note that the Rule creates new measures that will be included for the 2015 value-based purchasing program -- a central line-associated blood stream infection measure and a patient safety indicator composite measure -- plus a Medicare spending per beneficiary efficiency measure.
Clinical Process of Care, Patient Experience of Care and Outcome Measures for the FY 2013 Hospital VBP Program
Measure ID Measure Description
Acute myocardial infarction
AMI-7a Fibrinolytic Therapy Received Within 30 Minutes of Hospital Arrival AMI-8 Primary PCI Received Within 90 Minutes of Hospital Arrival
Heart Failure
HF-1 Discharge Instructions Pneumonia
PN-3b Blood Cultures Performed in the Emergency Department Prior to Initial Antibiotic Received in Hospital
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Healthcare-associated infections
SCIP-Inf-1 Prophylactic Antibiotic Received Within One Hour Prior to Surgical Incision
SCIP-Inf-2 Prophylactic Antibiotic Selection for Surgical Patients
SCIP-Inf-3 Prophylactic Antibiotics Discontinued Within 24 Hours After Surgery End Time
SCIP-Inf-4 Cardiac Surgery Patients with Controlled 6AM Postoperative Serum Glucose
Surgical Care Improvement
SCIP-Card-2 Surgery Patients on a Beta Blocker Prior to Arrival That Received a Beta Blocker During the Perioperative Period
SCIP-VTE-1 Surgery Patients with Recommended Venous Thromboembolism Prophylaxis Ordered
SCIP-VTE-2 Surgery Patients Who Received Appropriate Venous Thromboembolism Prophylaxis Within 24 Hours Prior to Surgery to 24 Hours After Surgery
Patient Experience of Care Measures
Measure ID Measure Description
HCAHPS Hospital Consumer Assessment of Healthcare Providers and Systems Survey
Clinical Process of Care, Patient Experience of Care and Outcome Measures for the FY 2014 Hospital VBP Program
Measure ID Measure Description
Acute myocardial infarction
AMI-7a Fibrinolytic Therapy Received Within 30 Minutes of Hospital Arrival AMI-8a Primary PCI Received Within 90 Minutes of Hospital Arrival
Heart Failure
HF-1 Discharge Instructions Pneumonia
PN-3b Blood Cultures Performed in the Emergency Department Prior to Initial Antibiotic Received in Hospital
PN-6 Initial Antibiotic Selection for CAP in Immunocompetent Patient Healthcare-associated infections
SCIP-Inf-1 Prophylactic Antibiotic Received Within One Hour Prior to Surgical Incision
SCIP-Inf-2 Prophylactic Antibiotic Selection for Surgical Patients
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SCIP-Inf-4 Cardiac Surgery Patients with Controlled 6AM Postoperative Serum Glucose
SCIP-Inf-9 Postoperative Urinary Catheter Removal on Post Operative Day 1 or 2 Surgeries
SCIP-Card-2 Surgery Patients on a Beta Blocker Prior to Arrival That Received a Beta Blocker During the Perioperative Period
SCIP-VTE-1 Surgery Patients with Recommended Venous Thromboembolism Prophylaxis Ordered
SCIP-VTE-2 Surgery Patients Who Received Appropriate Venous Thromboembolism Prophylaxis Within 24 Hours Prior to Surgery to 24 Hours After Surgery
Patient Experience of Care Measures
Measure ID Measure Description
HCAHPS Hospital Consumer Assessment of Healthcare Providers and Systems Survey*
Outcome Measures
Measure ID Measure Description
MORT-30AMI Acute Myocardial Infarction (AMI) 30-Day Mortality Rate MORT-30-HF Heart Failure (HF) 30-Day Mortality Rate
MORT-30 PN Pneumonia (PN) 30-Day Mortality Rate
Proposed Quality Measures for FY 2015 Hospital VBP Program Clinical Process of Care Measures
Measure ID Description
AMI-7a Fibrinolytic Therapy Received Within 30 Minutes of Hospital Arrival AMI-8a Primary PCI Received Within 90 Minutes of Hospital Arrival
AMI-10 Statin Prescribed at Discharge HF-1 Discharge Instructions
PN-3b Blood Cultures Performed in the Emergency Department Prior to Initial Antibiotic Received in Hospital
PN-6 Initial Antibiotic Selection for CAP in Immunocompetent Patient SCIP-Inf-1 Prophylactic Antibiotic Received Within One Hour Prior to Surgical
Incision
SCIP-Inf-2 Prophylactic Antibiotic Selection for Surgical Patients
SCIP-Inf-3 Prophylactic Antibiotics Discontinued Within 24 Hours After Surgery End Time
SCIP-Inf-4 Cardiac Surgery Patients with Controlled 6AM Postoperative Serum Glucose
SCIP-Inf-9 Urinary Catheter Removed on Postoperative Day 1 or Postoperative Day 2
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SCIP-VTE-2 Surgery Patients Who Received Appropriate Venous
Thromboembolism Prophylaxes Within 24 Hours Prior to Surgery to 24 Hours After Surgery
Patient Experience Measures
HCAHPS Hospital Consumer Assessment of Healthcare Providers and Systems Survey
Outcome Measures
AHRQ PSI composite Complication/patient safety for selected indicators (composite) CLABSI Central Line-Associated Blood Stream Infection
MORT-30-AMI Acute Myocardial Infarction (AMI) 30-day mortality rate MORT-30-HF Heart Failure (HF) 30-day mortality rate
MORT-30-PN Pneumonia (PN) 30-day mortality rate Efficiency Measures
MSPB-1 Medicare Spending per Beneficiary
