Health Law Daily Proposal withholds cost savings from hospitals skimping on quality
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Tuesday, July 26, 2016

Proposal withholds cost savings from hospitals skimping on quality

By Patricia K. Ruiz, J.D.

New models proposed by HHS continue the progress of shifting Medicare payments from quantity to quality by offering hospitals new incentives to deliver better care to patients at a lower cost. The proposed rule contains three new policies: (1) bundled payment models for cardiac care and an extension of the existing bundled payment model for hip replacements to include other hip surgeries; (2) a new model to increase cardiac rehabilitation utilization; and (3) a proposed pathway for physicians with significant participation in bundled payment models to qualify for payment incentives under the proposed Quality Payment Program. Under the payment models, hospitals would only be eligible to receive cost savings on care provided to Medicare beneficiaries if they meet a certain quality-of-care threshold.

Episode payment models. Under the proposal, acute care hospitals in certain geographic areas will participate in retrospective episode payment models (EPMs) that target care provided to Medicare beneficiaries receiving services during acute myocardial infarction (AMI), coronary artery bypass graft (CABG), and surgical hip/femur fracture treatment excluding lower extremity joint replacement (SHFFT) episodes. Under the models, the participating hospital would be accountable for the cost and quality of care provided to Medicare beneficiaries both during the stay and for 90 days after discharge. Target prices would be based on a blend of hospital-specific and regional historical data and would be adjusted based on the complexity of the treatment.

Hospitals delivering higher-quality care would be eligible to receive a higher amount of savings than those with lower-quality performance. Payments would be based on a quality-first principle—only hospitals meeting quality standards would be paid savings from providing care for less than the quality-adjusted target price.

Seeking a quality over quantity. The proposed rule sets forth three distinct EPMs focused on episodes of care for AMI, CABG, and SHFFT episodes. The proposed EPMs would enable hospitals to consider the most appropriate strategies for care redesign, including (1) increasing post-hospitalization follow-up and medical management for patients; (2) coordinating across the inpatient and post-acute care spectrum; (3) conducting appropriate discharge planning; (4) improving adherence to treatment or drug regimens; (5) reducing readmissions and complications during the post-discharge period; (6) managing chronic diseases and conditions that may be related to the proposed EPMs’ episodes; (7) choosing the most appropriate post-acute care setting; and (8) coordinating between providers and suppliers such as hospitals, physicians, and post-acute care providers. This would allow hospitals the opportunity to examine and obtain a better understanding of their own care processes and patterns with regard to these episodes, as well as the process of post-acute care providers and physicians.

Innovation center. The proposed rule would implement three new Medicare Parts A and B episode payment models under section 1115A of the Social Security Act (42 U.S.C. §1315a), which authorizes the Innovation Center to test innovative payment and service-delivery models to reduce Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) expenditures while preserving or enhancing the quality of care furnished under those programs. The models proposed under this rule would benefit Medicare beneficiaries by improving the coordination and transition of care, improving the coordination of items and services paid for through Medicare, encouraging more provider investment in infrastructure and redesigned care processes for higher-quality and more efficient service delivery, and incentivizing higher-value care across the inpatient and post-acute care spectrum.

MainStory: TopStory HealthCareReformNews ReimbursementNews IPPSNews CMSNews HealthReformNews PartANews PartBNews QualityNews

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