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Fairness in Value-Based Purchasing?

May 5, 2011
by Mark Hagland
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Premier’s senior advocacy leader looks askance at certain elements in CMS’ final VBP rule

When on April 29, the Federal Centers for Medicare and Medicaid Services (CMS) issued a final rule on value-based purchasing (VBP) for hospital reimbursement under Medicare, for payments beginning in fiscal year 2013, some in the industry had mixed comments on the rule. Among those was Blair Childs, senior vice president for public affairs at the Charlotte-based Premier Health Alliance, which represents more than 2,500 hospitals nationwide.

In fact, Premier’s experience with the CMS/Premier HQID (Hospital Quality Incentive Demonstration) project, which has raised overall quality of care on the part of participating hospitals by an average of 18.3 percent over five years, based on the use of more than 30 care quality measures, was consciously used in the formulation of Medicare’s VBP program, as provided for under the federal Accountable Care Act (healthcare reform).

So Childs’s public statement on behalf of Premier’s member hospitals, also released April 29, carried an unusual level of authority. Childs’s statement said, in part, that, “Based on our experience with the Hospital Quality Incentive Demonstration (HQID), the Premier healthcare alliance strongly supports policies that link payment to quality outcomes. However, we are disappointed that CMS essentially ignored comments from the field on the proposed Medicare value-based purchasing (VBP) rule and did not adjust its policies accordingly.”

In the April 29 statement, Childs criticized a number of specific elements of the methodology being used, including the fact that, “While inclusion of HCAHPS [the Hospital Consumer Assessment of Healthcare Providers and Systems patient experiences with care survey] is an important advancement of patient-centered care, a 30 percent weighting is excessive, since research shows that high-acuity or depressed patients score their experience at a lower level. Because of this, we believe that CMS’ policy will disadvantage hospitals that take on complex patients.”

Childs spoke this week with HCI Editor-in-Chief Mark Hagland regarding his and Premier’s underlying concerns with the formulation of the VBP final rule. Below are excerpts from that interview.

Your April 29 statement on the release of the final rule on value-based purchasing was very forceful. Can you elaborate a bit on the main inequities and issues you saw in the rule?
We are strong supporters of value-based purchasing, period. It all comes down to confidence as we move forward, in the program being as fair and transparent as possible. And our concern was simply around building confidence in the [value-based reimbursement] system and making this program work. And the measures and the weighting of the measures, and the way you structure this, are at the heart of the program.

In particular, on the patient satisfaction measure, I thought there was very strong commentary from people in the hospital community, saying there are significant issues with that measure. And when you have a consistent message like that, you would think that CMS would pay attention, because again, it’s not as though these are inappropriate comments that are being made. As you know, the patient satisfaction numbers are very much impacted by geography as well as the acuity of the population; there’s been a fair amount of research on that. And we haven’t quite figured out what drives that; so we just thought that that measure shouldn’t be as high as 30 percent. We thought CMS should have listened; it’s as simple as that. The key is to have the confidence going forward that CMS will listen, and will be very thoughtful.

Blair Childs

Could they ultimately change it down the road?
Certainly, of course, but not until next year.

Do you believe that what happened with HQID will continue to be a model for VBP under Medicare?
There’s no question about that; the design of the program was directly modeled after everything we learned in HQID. The measurement methodology we developed; the fact of being scored on achievement as well as improvement; having measures adequately tested before they’re applied; the topping-out of measures—those are all things that came directly out of HQID, as well as the fact of instituting the [Medicare VPB] program in general, because it’s clear that this is a powerful motivator.

What would you tell people who are with organizations that weren’t a part of HQID, that they should be particularly aware of in terms of VBP under Medicare?
We were very transparent in everything we did under HQID; there were about 260 hospitals participating, but we were aware that our program could eventually help everyone. Also, everyone has [the shift towards outcomes-based reimbursement] seen this coming. And if the healthcare reform bill hadn’t passed last year, this would have passed. And probably some other payment reforms would have passed.

This is the way that healthcare reimbursement is going, clearly?
Absolutely. And there’s one expression used by almost every member of Congress, Republican or Democrat, it’s that we need to move from paying for volume to paying for value—it’s almost become a truism.

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