Medicare Goals for 2016: 85% of Payments Tied to Quality and Value, 30% Through Alternative Models

The federal government is pushing the pace in its transition to quality-based reimbursement, announcing an ambitious schedule of payment reform that will have 85% of all Medicare fee-for-service payments tied to quality or value as early as next year. A full 90% of payments will be determined that way by 2018, Secretary of Health and Human Services Sylvia Burwell wrote in the New England Journal of Medicine.

What’s more, by the end of 2016, the goal is to have 30% of Medicare payments tied to quality or value through alternative payment models—that is, accountable care organizations (ACOs) and other bundled-payment arrangements under which providers are accountable for the quality and cost of their patient care. By the end of 2018, that goal becomes 50%.

“Now that the Affordable Care Act (ACA) has expanded healthcare coverage and made it affordable to many more Americans,” Burwell wrote, “we have the opportunity to shape the way care is delivered and improve the quality of care systemwide, while helping to reduce the growth of healthcare costs. Many efforts have already been initiated on these fronts, leveraging the ACA’s new tools.”

HHS will help further reform in three ways, Burwell wrote:

• Using incentives (e.g., increasingly tying payment to value through alternative payment models) to motivate higher-value care;

• Changing the way care is delivered through greater teamwork and integration, more effective coordination across settings, and greater attention to population health; and

• Harnessing the power of information to improve care for patients.

The change marks the first time in Medicare history it’s had specific goals for value-based payments and alternative payment models. Federal officials are also working with state Medicaid programs and private payers to implement value-based payment throughout the healthcare system.

See Burwell’s article at www.nejm.org/doi/full/10.1056/NEJMp1500445.

Care in 2015: Quality, Value and Moving Beyond the Hospital

Don’t expect vigorous cost-cutting to diminish across U.S. healthcare in 2015, but it will coexist with a growing emphasis on quality and value.

That’s the thrust of the white paper Healthcare Trends—2015, by Doug Smith, MBA, MHA, and Christine Ricci, MBA, RN, of healthcare leadership consultant B.E. Smith. The paper represents an “environmental scan” for the coming year, assembled for the American Hospital Association through surveys of more than 300 healthcare executives.

In response to the contrasting pressures, leaders are pursuing new alignments, Smith and Ricci write, through mergers and vertical integrations with other healthcare entities. Many are looking to become payers; fully half of systems, they say, have applied (or will) for insurance licenses.

Movement of care beyond hospital walls is accelerating, not only to clinics, urgent cares and stand-alone EDs, but also long-term facilities and patients’ homes. Urgent care clinics are now a $13 billion market; retail clinics in places like drugstores have doubled since 2012. Telemedicine is booming: Video consultations will grow from 5.7 million in 2014 to 130 million by 2018. Telemonitoring produced better than a 3-to-1 return on investment in the Geisinger system.

Partnerships are also extending to nontraditional players like soup kitchens, Red Cross facilities and NGOs, the report says, driven by big interest in population health. The trend is to create “communities of service” to leverage post-acute care management and keep people out of hospitals.

See the whole report at www.besmith.com/thought-leadership/white-papers/healthcare-trends-2015.

Task Force Seeks to Bolster ACOs

The Department of Health and Human Services has set some yardsticks for its transition to value-based Medicare reimbursement, but it’s not the only one. Members of the new Health Care Transformation Task Force (www.hcttf.org)— patients, payers, providers and purchasers joined to wield private-sector expertise in efforts to transform the healthcare system—want value-based arrangements built around the Triple Aim to account for 75% of their business by 2020. 

“By joining together, we are well positioned to introduce more effective change, more quickly, with more impactful results,” Aetna executive Fran Soistman said in announcing the effort.

The task force articulated principles for successful accountable care delivery and payment models it says are necessary to expanding ACOs. These fall into three main categories: honoring patient choice and improving attribution; quality measurement improvement; and improving financial stability. For all the key elements, see www.hcttf.org/resouces-tools/2015/1/28/improving-commercial-medicaid-and-medicare-accountable-care-organizations.

A Road Map to HIT Interoperability 

The Office of the National Coordinator for Health IT released a new draft plan for pursuing data interoperability in healthcare information technology. In Connecting Health and Care for the Nation: A Shared Nationwide Interoperability Roadmap, ONCHIT stresses the importance of effectively sharing health information to achieve the Triple Aim.

The document outlines the roles and actions needed from stakeholders to achieve the vision described in ONCHIT’s 10-year interoperability concept paper. It examines barriers impeding HIT interoperability, describes goals for the future and lays out a pathway for achieving them in three-, six- and 10-year windows.

Find the report at www.healthit.govhttps://s3.amazonaws.com/HMP/hmp_ln/imported/nationwide-interoperability-roadmap-draft-version-1.0.pdf. 

Medicare Value Bonuses Consumed by Penalties

Most of the hospitals Medicare graded for quality will get bonuses—but most of those bonuses will be negated by penalties assessed in other areas.

This year 1,700 hospitals will get extra payments for quality care, Kaiser Health News reported; that’s 55% of those the government graded for things like patient satisfaction, death rates and Medicare costs. But fewer than 800 of them will actually collect the extra money, due to penalties levied through other Medicare programs targeting readmissions and infections.

The incentive programs together produce an average bonus for large hospitals (400+ beds) of around $213,000. Their average penalty, KHN reported, should be about $1.2 million. The smallest hospitals (<200 beds) will get bonuses averaging $32,000 and penalties of about $131,000. Just 28% of hospitals will break even or better.

AHA Offers Toolkit for Community Partnerships

Hospitals’ increasing focus on quality and population health requires collaborations across their communities. The American Hospital Association’s Leadership Toolkit for Redefining the H: Engaging Trustees and Communities summarizes the views of 1,500 hospital/healthcare system leaders on their readiness to “adapt their governance practices to the new realities in a changing healthcare environment.”

New collaborations must appropriately allocate resources and define responsibilities for improving community health; bring insight, perspective and support from the community into the hospital boardroom; and reflect strategic partnerships for improving community health and health outcomes, the AHA concludes. The Leadership Toolkit sums up feedback, recommendations and other insights into working with patients, families and other partners, plus offers additional tools for engaging communities and trustees.

Download the toolkit at www.aha.org/research/cor/redefiningH/index.shtml.

New Payment Encourages Docs to Coordinate

Under a new program that began in January, Medicare will reward primary care physicians for better coordinating care for vulnerable seniors with multiple chronic illnesses, even without in-person visits.

Around two-thirds of Medicare beneficiaries have two or more chronic conditions. Such patients often receive fragmented care from multiple doctors with no one overseeing their big picture for redundant tests and treatments, medication interactions and other problems. The new fee, about $40 a month per patient, requires a care plan and time spent each month coordinating care with other providers and monitoring meds. Patients must also have 24-hour access to a care team member who can access their records.

In a separate demonstration project, Medicare is paying an average of $20 a month to improve care management and coordination for other patients who aren’t high risk.

Early Results Underwhelming on Readmission Reduction Efforts

Only a small minority of community groups getting federal reimbursement to reduce expensive hospital readmissions produced significant results compared with those from sites that weren’t part of the $300 million program, according to early partial results.

An early evaluation found that only four groups out of 48 that were studied in the Community-Based Care Transition Program significantly cut readmissions compared with those of a control group. At the same time, 29 groups have either withdrawn from the program or been terminated by the Department of Health and Human Services for failing to achieve targets. 

The CCTP project, which has grown since the evaluation was done, now has 72 participating sites administration officials hope will still produce readmission reductions and lessons in post-hospital care in return for the investment.

ONCHIT Weighs Population Health Barriers

Panelists at the Office of the National Coordinator for Health IT’s annual meeting in February discussed some of the barriers they’re finding in efforts to improve population health. One is race, per a report from Dan Bowman at FierceHealthIT. “Outcomes still remain poor for nonwhite populations,” Harvard’s John Mafi told panelists, “and this has to be—from the bottom all the way to the top—a priority.”

Annie Fine of New York City’s Department of Health and Mental Hygiene said better access to basic demographic information within EHRs would bolster efforts against infectious diseases. “We need to build those bridges to being able to get critical data points out of electronic medical records and link those data on a population basis,” Fine said.

CMS Looks at Pediatric HCAHPS as a Factor in Reimbursement

CMS will pilot a process this year to ascertain whether the new Child HCAHPS developed last year by AHRQ should be included in its core set of quality measures used by state Medicaid and CHIP programs. If the pilot is successful, the pediatric version of the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey could become a factor in reimbursement, like the adult version is now. In FY14, HCAHPS adult data represented 30% of hospitals’ total performance scores in the CMS hospital inpatient value-based purchasing program.

The AHRQ published the pediatric version of the HCAHPS in 2014. It was developed and field-tested by Boston Children Hospital’s Center of Excellence for Pediatric Quality Measurement in collaboration with the Consumer Assessment of Healthcare Providers and Systems Consortium.