Is Your Device An Attractive Value-Based Purchasing Option?

By Edward Black, founder and principal, Reimbursement Strategies

Traditional Medicare payment to the nation’s 3,500 hospitals is undergoing an historic transition with the Value-Based Purchasing (VBP) Program. This program arose from the Patient Protection and Affordable Care Act (ACA) of 2010. The genesis for the program was in the early 2000s, when the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 mandated that hospitals report on quality measures, accompanied by incentive payments for attaining defined quality standards. In 2005, the Deficit Reduction Act increased the payment reduction for hospitals that did not meet quality measures to 2 percent of annual Medicare billings, based on DRG (Diagnosis-Related Group) discharges per year. 

VBP incentivizes hospitals to provide high-quality patient care while controlling the growth in health care costs (or penalizes them for not doing so). Historically, the Inpatient Prospective Payment System (IPPS) paid hospitals for the volume of care and services provided. Episodes of care are reported using DRGs that describe various inpatient care, such as surgeries, maternity care, myocardial infarction, or serious infections. Under VBP, a hospital’s payment per care episode is determined by how well the individual hospital performs on specified quality measures, which are set annually. Program goals include decreasing inappropriate care and rewarding the best-performing providers. The program is not about negotiating price discounts, but rather attempts to address quality while still promoting healthcare cost controls. 

Throughout each fiscal year, participating hospitals collect quality data on the patient care they deliver, using specific measures for that fiscal year. Each hospital receives a Total Performance Score (TPS), out of a possible 100 points, which then is used to calculate the payment percent — with high-scoring hospitals receiving higher payments than low-performing facilities. 

The Centers for Medicare and Medicaid Services (CMS) establishes the quality measures each year within several categories, based on metrics that have been shown to improve clinical care processes and patient experience. In FY 2017 (the federal fiscal year begins Oct. 1), the following four domains will be measured:

1. Clinical Care — divided into 2 subdomains: Process and Outcome
2. Patient- and Caregiver-Centered Experience of Care/Care Coordination
3. Safety
4. Efficiency and Cost Reduction

Each domain is assigned a percentage weighting to calculate the TPS for each hospital.  The goal is to meet quality measures in three of four domains to ensure a culture of quality care. Thus, meeting only the efficiency and cost reduction measures does not ensure that quality care is being delivered, but may only reflect that cost reductions have been identified.

 

                FY 2017 SCORING

DOMAIN	SCORING
Clinical Care – Process  Clinical Care-Outcomes	5 % 25 %
Patient- and Caregiver-Centered Experience of Care/Care Coordination	25 %
Safety	20 %
Efficiency and Cost Reduction	25 %

 

                FY 2018 SCORING

DOMAIN	SCORING
Clinical Care	25 %
Patient- and Caregiver-Centered Experience of Care/Care Coordination	25 %
Safety	25 %
Efficiency and Cost Reduction	25 %

 

FY 2019 SCORING

DOMAIN	SCORING
Clinical Care	25 %
Person and Community Engagement	25 %
Safety	25 %
Efficiency and Cost Reduction	25 %

 

Below are examples of the measures in each domain, on which performance will be measured in FY 2017. This is not a complete list:

• Clinical Care — Process measures:
  • Fibrinolytic Therapy Received Within 30 Minutes of Hospital Arrival
  • Influenza Immunization
  • Effective Delivery Prior to 39 Completed Weeks Gestation
• Clinical Care — Outcomes measures:
  • Heart Failure, 30-Day Mortality Rate
  • Pneumonia, 30-Day Mortality Rate
• Patient- and Caregiver-Centered Experience of Care/Care Coordination measures:
  • Communication with Nurses
  • Communication with Doctors
  • Responsiveness of Hospital Staff
  • Pain Management
  • Cleanliness and Quietness of Hospital Environment
  • Discharge Information
• Safety measures:
  • Catheter-Associated Urinary Tract Infection
  • Central line-Associated Blood Stream Infection
  • C. difficile Infection
  • Surgical site infections (SSI) – Colon Surgery
  • SSI – Abdominal Hysterectomy
• Efficiency and Cost Reduction Domain measures:
  • Medicare Spending Per Beneficiary

Clinical Care

Technology-enabled solutions can assist with high-quality patient care and lower costs. Telehealth services as a means for providers to interact with patients in rural settings, bringing specialized healthcare into the patient’s home, represents a significant change. Other innovations include many of the patient-centered monitoring devices currently on the market or under development.  These devices bring real-time, interactive (synchronous) monitoring to the individual, and involve them in care decisions that can change the course of their condition. 

Think of blood glucose monitors that give patients actionable data to prevent a hyper- or hypo-glycemic event, which may obviate the need for a physician office visit, or more serious sequelae that could result in hospitalization. Commercially available bracelet technology can monitor pulse rate to alert a person with rhythm disturbances of potentially dangerous changes. This alert may give the patient time to seek medical attention in a low-cost care setting, rather than an expensive ambulance ride to an emergency room.

Patient- and Caregiver-Centered Experience

The Patient-and Caregiver-Centered Experience of Care/Care Coordination metric includes measures that relate to communication with nurses and doctors, discharge information, and medications. This underscores the need for good communication tools — patient education that can be provided through multiple channels, such as audio, written information, or one-to-one conferences — and the need to provide such information in multiple languages, written in simple, accessible terms.

Additionally, many healthcare systems are capable of using the patient’s medical record as a communication tool, which allows patients to access their information so they can be actively involved in healthcare decisions. Companies that provide communication training for healthcare professionals can positively impact relationships with patients. Even the cleanliness and quietness of the hospital environment is taken into consideration — noise-dampening technology, quieter but effective alarm systems, or door-closing technology that prevents slams — all of them contribute to improving the quality of the patient experience.

Safety Measures

Safety measures in FY 2017 are heavily weighted toward infection prevention. Even items as simple as handwashing supplies can impact this domain. Better antibiotics, or other anti-microbials that are used appropriately, also will improve outcomes.  For catheter-associated urinary tract infections (CAUTI), new technologies that can replace indwelling long-term catheters — such as temporary prostatic stents — can provide urinary drainage without external components that attract bacteria.

Efficiency And Cost Reduction

The bottom line is the bottom line in the efficiency and cost-reduction domain, whose only measure is to look at Medicare Spending Per Beneficiary (MSPB). “Lower cost, higher quality” should become the mantra for all medical device companies within the new payment environment of the VBP Program.