1. Medicare Linkage: Quality & Payment Medicare Linkage: Quality & Payment Washington State Hospital Association July 28, 2008

2. Presenters Washington State Hospital Association Carol Wagner, Vice President, Patient Safety Claudia Sanders, Senior Vice President, Policy Lance Heineccius, Interim Director, Finance Jim Cannon, Executive Director, Health Information Program AND, Gloria Kupferman, DataGen

3. Why This Webcast? This webcast is designed to: Provide you with information on current and future Medicare links between payment and quality Provide you with new WSHA tools to improve quality Encourage a dialog between finance and quality at each hospital

4. Preparing for the Future Links between quality and payment currently apply only to PPS hospitals It is advisable for hospitals of all sizes to report their measures to Hospital Compare and to ensure that they achieve high scores

5. Information in Three Stages Medicare has already started to link quality and payment. 1.CMS is implementing pay for reporting 2.Reporting measures will change; addition of new measures under discussion 3.On the horizon, value based purchasing

6. Slide Presentation Marked Likelihood of Medicare policy happening: For sure ( ) Likely (?) Possible (??) Direction is cloudy

7. Linking Quality and Payment in the Medicare Program

8. Outpatient Pay for Reporting 7 Measures Minus 2.0 percentage points Inpatient Pay for Reporting 10 Process Measures Minus 0.4 percentage points if not report Expand Inpatient Pay for Reporting 21 Measures Minus 2.0 percentage points Expand Inpatient Pay for Reporting 27 Measures Add Patient Satisfaction and 30-day Mortality Measures Minus 2.0 percentage points Hospital Acquired Conditions (8 conditions) Potential Payment Reductions Value-Based Purchasing Pending Congressional Approval Linking Quality and Payment Expand Hospital Pay for Reporting 32 Measures Minus 2.0 percentage points FY 2006 20112009 FY 2010200820072005 2011 IPPS Proposed Quality Measures ?? Measures Minus ?? percentage points 2010 IPPS Proposed Quality Measures 72 Measures Minus ?? percentage points 2006 Expand Hospital Pay for Reporting 37 Measures ( 6 VTE’s) Minus 2.0 percentage points Candidate Hospital Acquired Conditions (9 additional conditions)

9. Medicare Quality Initiatives – Public Reporting Hospital Compare Twenty four process measures Two risk-adjusted mortality measures Public reporting on the Web Nursing Home Compare Seventeen measures based on patient condition Public reporting on the Web Home Health Compare Twelve measures based on patient condition Public reporting on the Web Physician Voluntary Reporting Program Sixteen process measures Confidential report back to physician

10. Medicare Payment Update Reporting hospital quality data for annual payment update Medicare Modernization Act (MMA) required Prospective Payment System hospitals to submit data on quality beginning in FFY 2005 and linked the update factor to reporting Data displayed on the CMS Hospital Compare web site

11. History of “Pay for Reporting” Inpatient PPS – FFY 2005 and 2006, update factor minus 0.4 percent for non-compliance FFY 2007, update factor minus 2.0 percent for non- compliance Outpatient PPS – CMS delayed adoption of quality measures (including a 2.0 percent for non-compliance) Reporting in CY 2008 for payment in 2009 Home Health PPS – CY 2007, update factor minus 2.0 percent for non- compliance

12. Inpatient PPS Measures Acute Myocardial Infarction (AMI) AMI -1Aspirin at arrival Acute Care Inpatient: HQA since 2003 Medicare payment since FY 2005 AMI -2Aspirin at discharge AMI -3Beta-blocker at arrival AMI -4Beta-blocker at discharge AMI -5 Angiotensin converting enzyme (ACE) inhibitor or angiotensin receptor blocker (ARB) for left ventricular systolic dysfunction (LVSD) AMI -6Smoking cessation advice/counseling Acute Care Inpatient: HQA since 2004 Medicare payment since FY 2007 AMI -7A Thrombolytic within 30 minutes of arrival AMI -8A Percutaneous Coronary Intervention (PCI) 90 minutes of arrival AMI -930 day mortality rate Acute Care Inpatient: Medicare payment since FY 2008

13. Inpatient PPS Measures Heart Failure HF-1 Left ventricular systolic function evaluation Acute Care Inpatient: HQA since 2003 Medicare payment since FY 2005 HF-2 ACE inhibitor or ARB for LVSD HF-3 Discharge instructions received Acute Care Inpatient: HQA since 2004 Medicare payment since FY 2007 HF-4 Smoking cessation advice/counseling HF 30 day mortality rate Acute Care Inpatient: Medicare payment since FY 2008

14. Inpatient PPS Measures Pneumonia PN-1 Oxygenation assessment Acute Care Inpatient: HQA since 2003 Medicare payment since FY 2005 PN-2 Pneumococcal vaccination PN-3B Blood culture performed prior to administration of first antibiotics PN- 4 Smoking cessation advice/counseling Acute Care Inpatient: HQA since 2007 Medicare payment since FY 2008 PN-5A Initial antibiotics within 6 hours of arrival PN-6 Received most appropriate antibiotic PN-7 Influenza vaccination PN 30 day mortality rate Acute Care Inpatient: Medicare payment beginning FY 2009 ?

15. Inpatient PPS Measures Surgical Care Improvement SCIP -1 Antibiotics one hour before incision Acute Care Inpatient: HQA since 2004 Medicare payment since FY 2007 SCIP -3 Antibiotics stopped within 24 hours after surgery SCIP -2 Selection of antibiotic Acute Care Inpatient: HQA since 2007 Medicare payment since FY 2008 SCIP - VTE1 Prophylaxis to prevent venous thromboembolism ordered SCIP- VTE2 Prophylaxis to prevent venous thromboembolism received SCIP -6 Appropriate hair removal Acute Care Inpatient: HQA since 2007 Medicare payment since FY 2008 SCIP - Card2 Cardiac surgery patients with controlled 6AM postoperative serum glucose ?

16. CMS 30-day Mortality Measures Risk adjustment methodology developed by Yale and Harvard Based on administrative claims data Takes into account medical care received during the year prior to patients hospitals admission Patient inpatient, outpatient and physician practice claims Model uses information adjust for patient mix Patients with comfort care not excluded Patients who are admitted to a hospital and then transferred are included in the measures

17. Inpatient PPS Measures HCAHPS Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) HCAHPS survey results on patient interaction with doctors, nurses, and hospital staff; cleanliness of the organization; pain control; communication about medicines; and discharge information Acute Care Inpatient: HQA since 2007 Medicare payment since FY 2008

18. Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Designed to allow comparison of patients ’ perspectives on hospital care based on 27 questions in seven domains Doctor communication Nurse communication Cleanliness and quiet of the hospital environment Responsiveness of hospital staff Pain management Communication about medicines Discharge information Also includes two questions: overall satisfaction with and willingness to recommend the hospital

19. Patient Satisfaction Hospital Environment Items Cleanliness of hospital environment Quietness of hospital environment Discharge Information Composite Discharge Information Overall Ratings Overall rating of this hospital Willingness to recommend this hospital

21. Inpatient Payment Rate with Full Update

22. Inpatient Payment Rate Reduced by 2.0

23. Proposals for Inpatient in 2009, 2010, 2011...

24. 2009 Inpatient Proposed Quality Measures CMS requires hospitals to submit data effective with discharges beginning January 1, 2009 Forty-three new measures including: One surgical care Four nursing sensitive Three readmission Five stroke Six venous thromboembolism (VTE) measures  VTE -1: VTE Prophylaxis  VTE- 2: VTE Prophylaxis in the ICU  VTE- 4: Patients with overlap in anticoagulation therapy  VTE - 5/6: (as combined measure) Patients with UFH dosages and platelet count monitoring and adjustment  VTE- 7: Discharge instructions: follow-up, compliance, dietary restrictions adverse drug reactions  VTE- 8: Incidence of preventable VTE ??

25. 2010 Inpatient Proposed Quality Measures (72) Heart Attack (AMI) - 8 measures Heart Failure (HF) - 4 measures Pneumonia (PN) - 6 measures Surgical Care Improvement Project (SCIP) - 8 measures Mortality Measures - 3 measures Patient’s Experience of Care (HCAHPS) Readmission Measures (Medicare patients) - 3 measures Inpatient Stroke Care - 5 measures ??

26. 2010 Inpatient Proposed Quality Measures (72) continued... DVT Prophylaxis (from proposed 2009) - 6 measures AHRQ Patient Safety Measures - 4 measures AHRQ Inpatient Quality Indicators – 2 measures AHRQ Composite Measures - 3 measures Nursing Sensitive Measures - 4 measures Cardiac Surgery Measures - 15 measures ??

27. 2011 and Subsequent Years - Inpatient Proposed Measures Chronic Pulmonary Obstructive Disease Measures - ? measures Complication of Vascular Surgery - 3 measures Inpatient Diabetes Care Measures - ? measures Healthcare Associated Infection - 2 measures Central Line Associated Blood Stream Infections/Surgical Site Infections Sexual Assault/Death or Injury Patient or Staff Assault ??

28. 2011 and Subsequent Years - Inpatient Proposed Measures (continued…) Timeliness of Emergency Care Measures - 3 measures Surgical Care Improvement Project (SCIP) - 2 measures Complication Measures (Medicare Patients) - ? measures Hospital Inpatient Cancer Care Measures - 5 measures Average Length of Stay Coupled with Readmission Measure - ? measures Healthcare Associated Conditions - 3 measures Serious Reportable Events in Healthcare - 24 measures ??

29. Preventable Hospital Acquired Conditions - 14 measures Catheter-Associated Urinary Tract Infection (UTI) Vascular Catheter-Associated Infection SSI Following Elective Surgeries:  Total Knee Replacement  Laparoscopic Gastric Bypass and Gastroenterostomy  Ligation and Stripping of Varicose Veins Legionnaire’s Disease Glycemic Control Iatrogenic Pneumothorax Delirium Ventilator Associated Pneumonia DVT/PE Staphylococcus Aureus Septicemia C Diff Associated Disease MRSA 2011 and Subsequent Years - Inpatient Proposed Measures (continued…) ??

30. Hospital Outpatient Quality Data Reporting Program Emergency Department Preoperative Care AMI Aspirin at ArrivalX AMI Median Time to FibrinolysisX AMI Fibrinolytic Therapy Received Within 30 Minutes of ArrivalX AMI Median Time to ElectrocardiogramX AMI Median Time to Transfer for Primary PCIX Timing of Antibiotic Prophylaxis X Selection of Prophylactic Antibiotic X ?

31. Outpatient Data Reporting Start date for hospital outpatient encounters is period from April through June 2008 Outpatient data due to CMS November 1, 2008 Validation will NOT be implemented until CY 2009 Validation will be implemented in CY 2009 beginning with July 2008 data Delay public reporting until CY 2009 for data submitted beginning July 2008 Data submitted for July 2008 services and forward will affect payment determinations for CY 2010 ?

32. Value-Based Purchasing

33. Medicare Pay for Performance (P4P) “Better care should be rewarded... it is time that we pay for the quality of the health care provided to our beneficiaries, not simply the amount. We are working to apply this in every setting in which Medicare and Medicaid pays for care.” CMS Administrator Mark McClellan, M.D. Ph.D. January 31, 2005

34. CMS Report on Value-Based Purchasing CMS report to Congress released on November 21, 2007 Mandate to implement by October 1, 2008 (Deficit Reduction Act of 2005) CMS proposes a three-year transition to full payment for performance (P4P) Year 1 – 100 percent pay for reporting Year 2 – 50 percent pay for reporting and 50 percent on P4P Year 3 – 100 percent on P4P

35. Redistribution in Value-Based Purchasing Scoring based upon data reported by hospitals in three quality “domains” Clinical process of care, Patients’ perspectives of care, and Outcomes Pool of incentive money funded via a carve- out from all hospital inpatient payments (2 to 5 percent) Redistribution of pool dollars dependent upon hospitals’ scores

36. Measures for Value-Based Purchasing Process of care data reported since 2004 and publicly available on the CMS Hospital Compare site HCAHPS Patients’ Perspectives of Care survey required as part of pay for reporting as of FFY 2008 and publicly available since March 2008 Two outcomes measures, 30-day mortality of patients with AMI or heart failure, publicly available since June 2007

37. Hospital Performance in Value-Based Purchasing Overall hospital performance will be measured based on an aggregate of the scores in all three domains Process measures for updates and HCAHPS Indicators Each indicator receives a score between 1 and 10 Each indicator score is the higher of two measures - attainment or improvement

38. Hospital Performance in Value-Based Purchasing The attainment score for an indicator is determined by comparing the hospital’s performance to national benchmark and threshold levels for the indicator The benchmark -- the high performance measurement The threshold -- the minimum acceptable performance measurement Each domain will have its own methodology for setting benchmarks and thresholds The improvement score for an indicator is determined by comparing the hospital’s performance to its own prior year performance

39. HCAHPS in Value-Based Purchasing HCAHPS scoring will include a score (between 0 and 20) for achieving minimum performance across all HCAHPS indicators If all eight of a hospital’s HCAHPS indicator scores were above their respective 50 th percentile (median) value, the hospital would receive the full 20 points Otherwise, the minimum performance score would be based upon the indicator with the lowest percentile score and points awarded based upon how close that percentile rank is to the median

40. Scores In Value-Based Purchasing Each domain’s performance scores are aggregated as a percentage of the maximum possible score Then the domain aggregates are combined to arrive at one overall VBP Total Performance Score Combining individual scores into one aggregate percentage allows CMS to compare hospitals on one standardized measure

41. Questions on Value-Based Purchasing How will mortality (outcome) measures be scored and incorporated? (Report to Congress makes no mention) Will indicators with small case counts be included? How will new indicators be phased in? How will the three domains’ scores be weighted to arrive at the Total VBP score? What will the withhold percentage be in 2009?

44. Basics of Value-Based Purchasing Scores will be calculated at the start of each inpatient prospective payment system year The baseline and measurement period will be April 1 through March 31 FFY 2010 = October 1, 2009 – September 30, 2010 The baseline period for FFY 2010 will be April 1, 2007 – March 31, 2008 The measurement period for FFY 2010 will be April 1, 2008 – March 31, 2009 Data only be 7 months old at the start of the FFY Hence, hospitals will be submitting data within a tighter timeframe (60 days from close of quarter plus 30 days to resubmit data, if necessary)

45. Hospitals’ Scores in Value-Based Purchasing Overall scores from each of the three domains will be averaged together Process measures will receive the highest weight Current proposal: 70 percent Process, 30 percent HCAHPS The hospital’s grand total score is entered into an equation to determine a payment percentage If the maximum payment percentage is 100 percent of the hospital’s original pool contribution, there will be excess money left in the pool

47. Payments for Value-Based Purchasing A hospital’s payment percentage will be determined at the start of each payment year The payment percentage will apply for the whole year The VBP carve-out and payment percentage will be applied to inpatient prospective payments, excluding IME, DSH, outliers, and capital

48. Excess Pool Funds in Value-Based Purchasing Question: What becomes of the excess pool funds? The industry wants assurances that the entire pool will be distributed MedPAC also recommends that there be no savings achieved through this program How will distribution of excess dollars be handled?

49. Key Factors in Value-Based Purchasing Hospitals’ P4P scores and payment percentages established prospectively based upon prior performance Data reported between April 1, 2008 and March 31, 2009 will be the measurement year for FFY 2010 and the base year for FFY 2011 Only top performers will be made whole Once transition to VBP, hospitals still must participate in reporting of all data to qualify for incentive payments Measures for VBP Measures for public reporting Measures being tested

50. WSHA Work on Quality and Payment

51. WSHA Federal Advocacy on Linking Payment and Quality CMS has proposed inpatient and outpatient rules Inpatient: Comment period closed and final rule expected by September 1 Outpatient: Comment period open through September 2, 2008 Comment at: http://tinyurl.com/5z33sh WSHA generally follows AHA lead on national issues WSHA will be involved if and when value based purchasing is discussed by Congress and next administration Make sure we understand your concerns on linking payment and quality

52. WSHA Information on New Payment Changes HIP will estimate impact of hospital specific proposals HIP contracts with DataGen to get you this information You can expect to see: Impact of inpatient final rules Impact of outpatient final rules If adopted, impact of value based purchasing

53. WSHA Help on Quality Improvement Washington is helping hospitals to improve the results of Hospital Compare measures through a Safe Table called Safe Practices: Hospital Compare and More A Safe Table is a collaborative in which hospitals work together to learn best practice and improve care Quarterly Hospital Compare Reports These color coded reports display how your hospital is doing as compared to the top 10% of hospitals in the nation and other hospitals in Washington State

54. Source: Hospital Compare July 2006 – June 2007 Suggested Measures

55. Questions???

56. Contact Information Carol Wagner: carolw@wsha.orgcarolw@wsha.org Claudia Sanders: claudias@wsha.orgclaudias@wsha.org Jim Cannon: jimc@wsha.orgjimc@wsha.org Lance Heineccius: lanceh@wsha.orglanceh@wsha.org