In back-to-back months this summer, announcements around new mandatory bundled payment programs from the Department of Health and Human Services (HHS) as well as the latest updates regarding Centers for Medicare & Medicaid Services (CMS) penalties on hospitals for failing to lower their rehospitalization rates, collectively signaled to healthcare leaders that payment reform is here to stay.
The July 25 announcement of the mandatory bundled payment program for heart attack care and for cardiac bypass surgery stated, “The hospital in which a Medicare patient is admitted for care for a heart attack or bypass surgery would be accountable for the cost and quality of care provided to Medicare fee-for-service beneficiaries during the inpatient stay and for 90 days after discharge. The proposed cardiac care policies would be phased in over a period of five years, but would begin July 1, 2017 for hospitals located in the 98 metro areas participating in the model (about one-quarter of all metro areas in the nation).” These new bundled payment models for cardiac care, in addition to the extension of the existing bundled payment model for hip replacements and other hip surgeries, are yet another major step in forcing reimbursement forward into value-based purchasing.
Meanwhile, on the hospital readmissions front, although the news didn’t come out of CMS directly, an August 2 Kaiser Health News report revealed that the federal government’s penalties on hospitals for failing to lower their rehospitalization rates will hit a new high as Medicare will withhold approximately $528 million—about $108 million more than last year. CMS will penalize more than half of the nation’s hospitals—a total of 2,597—for having more patients than expected return within a month, as mandated by the government’s Hospital Readmissions Reduction Program, which adjusts payments for hospitals with higher than expected 30-day readmission rates for six targeted clinical conditions.
These revelations point to a realization beyond payment reform that patient care leaders likely already knew, but is now confirmed: U.S. hospitals are under more pressure than ever before to produce optimal clinical and cost outcomes. Key to this transformation will be leveraging robust data analytics and information technology to help drive continuous performance improvement.
Payers and Providers Converge
A critical element to providers planning for a value-based care future is aligning their needs and goals with those of payers. While this hasn’t always been easy to accomplish, most of the sources interviewed for this story agree that real strides are being made. Tim Moore, M.D., executive vice president of health affairs and chief medical officer of technology provider AxisPoint Health, a Westminster, Colo.-based spinoff of McKesson, which works primarily with payers, says there are plenty of new opportunities emerging around getting payers and providers on the same side of the table to sort out risk-based contracting challenges.
“With better integration and better relationships between payers and providers, through value-based reimbursement, there should be much better use of clinical data that is more timely and can provide interventions that are more appropriate to drive opportunities for savings,” Moore, previously chief medical officer at WebMD Health Services, says. Historically, he notes, payers would be straddled with only 60-day or 90-day-old claims-based administrative data, and by the time they did something with that, 30 more days would pass. “So there was a limit from a time perspective and also an accuracy perspective,” Moore says. He adds, “Providers have more timely claims be it through the electronic health record [EHR] or through the hospital with admission/discharge/transfer [ADT] information. If you have that timely information and you can leverage it, you can much better leverage algorithms and analytics to help predict who needs better support and guidance, from their own real data rather than administrative claims data that’s 90 days old.”
Tim Moore, M.D.
The thing that payers can bring to the table that providers sometimes cannot, continues Moore, is a higher level view of the population that the providers are delivering service to. “Providers sometimes don’t get a good view of the whole population they are serving, as they are only serving one patient at a time. But payers see a longitudinal view of patients over the past year or two,” he says.
Moore gives an example of how some hospitals throughout the country leverage health information exchanges (HIEs) that have good ADT data that hasn’t been shared or used by industry players such as the payer market. “With this ADT data, you can pull out other information including how many ER visits someone has had in the past six months, his or her diagnosis, and when he or she was in the hospital, so you have timely information that says here is a patient that has been in the hospital and because of this condition they have a higher risk of a readmission,” he says.
At the same time, payers can help by looking across different hospitals and pick out which ones are outliers in terms of high readmission rates. “Some hospitals are good at [avoidable readmissions], so you need to put resources towards the ones that are outliers,” Moore says. “Providers don’t have that full view like payers do. I think that leveraging the two sides can open up a whole new way of taking the data, and putting together and focusing the resources on where it will be most impactful,” he says.
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