Understanding the Hospital Value-Based Purchasing (VBP) Program

July, 2011

Goals of VBP Webinar

• Overview of ACA’s delivery system reforms and implications • What is VBP, Who Participates, and What’s at Stake • Review of the FFY 2013 VBP program – Measures – Data Collection Timeframes – National Performance Standards – VBP Scoring Methodology – Unresolved Issues • Look ahead to 2014 VBP program • Questions

VBP in Context – ACA’s Mandatory Delivery System Reforms for Hospitals

FFY 2013 FFY 2015 VBP Readmissions HACs EHR Meaningful Use (ARRA)

• Begins October 1, 2012 (FFY 2013) • Begins October 1, 2012 (FFY 2013) • Redistributes inpatient payments • Budget neutral • Cuts Medicare inpatient payments • $7 billion cut /10 years nationwide • Begins October 1, 2014 (FFY 2015) • Incentives for qualifying hospitals now • Cuts Medicare inpatient payments • $1.4 billion cut / 10 years nationwide.

• Cuts Medicare inpatient payments in FFY 2015 for hospitals that do not meet “meaningful use” standard

Implications of Mandatory Delivery System Reforms

•

Hospitals will be competing against each other

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Play or pay

VBP • Best performers win • Others break even or lose Readmissions/HACs • No winners, only losers EHR Program • Carrot and stick

VBP in Context – ACA’s Voluntary Delivery System Reforms for Hospitals and Other Providers

FFY 2011 FFY 2013 Center for Medicare/Medicaid Innovation (CMMI) ACO Program

• Begins January 2012 • RFPs to be released soon • Medicare FFS payments continue • Develop test new/innovative delivery models • $10 billion in new funding / 10 years • Savings/losses shared by groups of providers and CMS

Bundling Pilots

• Begin January 2013 (or sooner) • Testing of global payment for an episode of care that may not exceed current FFS payment • Must save Medicare program money

What is VBP?

• Established by the Affordable Care Act of 2011 (ACA) • Transition hospitals from P4R to P4P under Medicare • Medicare payment incentives/penalties to promote – Achievement of high quality care – Improvement in care quality • Adjusts Medicare IPPS payments starting Oct. 1, 2012 (FFY 2013) based on quality performance • Program details left to CMS

Who is Subject to the Hospital VBP Program?

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Acute care hospitals participating in the IQR Program

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Excluded hospitals: – CAHs – Specialty hospitals (psychiatric, rehabilitation, children’s, cancer, LTCH) – Hospitals cited for “immediate jeopardy” – Hospitals not participating in the IQR program – Hospitals with small numbers of applicable measures/cases as determined by CMS • Demos to be established for CAHs and small rural hospitals

What’s at Stake Under VBP?

• Program is self-funded by hospital “contributions” • Contribution based on Medicare FFS payments* – 1.0% reduction in FFY 2013 – Reduction increased by 0.25% each year – 2.0% reduction for FFY 2017 and beyond • VBP performance determines P4P amount

•

Budget-neutral – Redistributive – Best performers win, others break even or lose – VBP payments are netted against contributions * Payment reductions exclude IME, DSH low-volume hospitals and outliers.

Updates to the VBP Program

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Continuously updated as part of annual rulemaking

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ACA requires notification of each year’s rules prior to quality data collection used for scoring – FFY 2013 program rules established – FFY 2014 program rules are nearly in place – FFY 2015 program rules likely to start dropping in 2012

VBP’s Quality Measures

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Law requirements – Must be measures reported under IQR program – Measures must be publicly available Hospital Compare for at least one year prior to use in VBP – CMS must publish measures and national performance standards for each measure 60 days before start of the performance measurement period – Must categorize measures (domains)

•

CMS discretion – What measures to include/exclude

Domain Process of Care HCAHPS (Patient Experience of Care) Outcomes (mortality/AHRQ/HACs) Efficiency Other TBD Totals

VBP Domains

FFY 2013 Program

Measure Count 12 Domain Weight 70%

Proposed FFY 2014 Program *

Measure Count Domain Weight 13 20% 1 (using 8 HCAHPS dimensions) 30% 1 (using 8 HCAHPS dimensions) 30% N/A N/A N/A N/A N/A N/A 13 (2 domains) * Only some aspects of 2014 program are final 13 30% 1 20% N/A 28 (4 domains) N/A

Process Domain Measures – FFY 2013 Program

Acute Myocardial Infarction

AMI-7a Fibrinolytic Therapy Received Within 30 Minutes of Hospital Arrival AMI-8a Primary Percutaneous Coronary Intervention (PCI) Received Within 90 Minutes of Hospital Arrival

Heart Failure

HF-1

Pneumonia

PN-3b Discharge Instructions Blood Cultures Performed in the Emergency Department Prior to Initial Antibiotic Received in Hospital PN-6 Initial Antibiotic Selection for CAP in Immunocompetent Patient

Surgeries (as measured by Surgical Care Improvement (SCIP) measures)

SCIP-Card-2 Surgery Patients on a Beta Blocker Prior to Arrival That Received a Beta Blocker During the Perioperative Period SCIP-VTE-1 Surgery Patients with Recommended Venous Thromboembolism Prophylaxis Ordered SCIP-VTE-2 Surgery Patients Who Received Appropriate Venous Thromboembolism Prophylaxis Within 24 Hours Prior to Surgery to 24 Hours After Surgery

Healthcare-Associated Infections (as measured by SCIP measures)

SCIP-Inf-1 Prophylactic Antibiotic Received Within One Hour Prior to Surgical Incision SCIP-Inf-2 SCIP-Inf-3 SCIP-Inf-4 Prophylactic Antibiotic Selection for Surgical Patients Prophylactic Antibiotics Discontinued Within 24 Hours After Surgery End Time Cardiac Surgery Patients with Controlled 6 AM Postoperative Serum Glucose

HCAHPs Domain Measures – FFY 2013 Program

Patient Satisfaction Survey

HCAHPS Eight Dimensions (using the most positive responses, “top box” responses for each question used within the HCAHPS dimension): • Communication with Nurses • Communication with Doctors • Responsiveness of Hospital Staff • Pain Management • Communication About Medicines • Cleanliness and Quietness of Hospital Environment • Discharge Information • Overall Rating of Hospital Modifications to HCAHPS on Hospital Compare: • “cleanliness and quietness” – combined • “would you recommend this hospital?”- not included

VBP National Performance Standards – FFY 2013 Program

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National Benchmarks – Highest achievement levels – Average performance score for the top 10% of all hospitals

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National Thresholds – Minimum achievement levels – Median performance score for all hospitals

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Established from baseline period data

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Vary by measure:

Measure AMI-7a - Fibrinolytic Therapy Received Within 30 Minutes of Hospital Arrival Benchmark Threshold 92% 65% SCIP-Inf-1 - Prophylactic Antibiotic Received Within One Hour Prior to Surgical Incision 100% 97%

Data Collection Timeframes – FFY 2013 Program

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Baseline Period – Used to establish performance standards and to measure – – performance improvement July 1, 2009 – March 31, 2010 (9 months) Data already reported to CMS

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Performance Period – Used to measure/calculate VBP scores – July 1, 2011 – March 31, 2012 (9 months) – Just started and will continue into Spring

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Applies to both Process and HCAHPS measures

Data Collection and Processing Timeframes – FFY 2013 VBP Program

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May June July Aug.

Sept.

Baseline Period

[quality data from Dec. 2010 update to Hospital Compare]

FFY 2009

2008 2008 2008

2009

2009 2009 2009 2009 2009 2009 2009 2009

FFY 2010

2009 2009 2009

2010

2010 2010 2010 2010 2010 2010 2010 2010

FFY 2011

2010 2010 2010

2011

2011 2011 2011 2011 2011 2011 2011 2011

FFY 2012

2011 2011 2011

2012

2012 2012 2012 2012 2012 2012 2012 2012

Performance Period

[will reflect quality data from Dec. 2012 update Hospital Compare release]

FFY 2013

2012

Medicare IPPS payments

adjusted based on performance under VBP Release of VBP final rule [60 days prior to start of performance period as required by law] Release of FFY 2013 IPPS final rule [will include preliminary VBP scores, allowing CMS 4 months to process quality data reported during performance period]

VBP Scoring Methodology

• Hospital performance for each measure is compared to national performance standards • Points are awarded for: – Achieving high quality goals – Improving towards high quality goals • Maximum = 10 points / measure • Points scored for each measure are used to calculate domain scores • Domain scores are weighted to calculate a Total Performance Score

Achievement Points (same for process and HCAHPS measures)

VBP Scoring – FFY 2013 Program

• 10 point maximum / measure • Performance (during performance period) compared to: • National threshold (minimum performance level) • National benchmark (high attainment level) • Below the threshold = 0 points • At or above the benchmark = 10 points • Between threshold and benchmark = between 1 and 9 points Improvement Points (same for process and HCAHPS measures) • 9 point maximum / measure • Performance (during performance period) compared to: • Prior performance (baseline period) • National benchmark (high attainment level) • At or below baseline period score = 0 points • Above baseline period score = between 1 and 9 Consistency Points (HCAHPS only) • 20 point maximum • Lowest HCAHPS measure score (during performance period) compared to: • National floor (lowest score in the country) • National threshold (minimum performance level) • Lowest HCAHPS score at national floor = 0 points • Lowest HCAHPS score at or above threshold = 20 points • Lowest HCAHPS score between floor and threshold = between 1 and 19 points

Process Score Calculation – FFY 2013 VBP Program

National - Baseline Period Achievement Threshold Hospital - Baseline Period Case Count Process Measure Score Hospital - Performance Period Case Count Process Measure Score Achievement Points Improvement Points Final Points

(Higher of Achievement or Improvement Points)

Indicator

Heart Attack Patients Given Fibrinolytic Medication Within 30 Minutes Of Arrival Heart Attack Patients Given PCI Within 90 Minutes Of Arrival Heart Failure Patients Given Discharge Instructions Pneumonia Patients Whose Initial Emergency Room Blood Culture Was Performed Prior To The Administration Of The First Hospital Dose Of Antibiotics

Benchmark

91.91% 100.00% 100.00% 100.00% Pneumonia Patients Given the Most Appropriate Initial Antibiotic(s) Surgery Patients Given Preventative Antibiotic(s) Within One Hour Before Surgery Surgery Patients Given the Appropriate Preventative Antibiotic(s) for Surgery Surgery Patients Whose Preventative Antibiotic(s) Were Stopped Within 24 Hours After Surgery Heart Surgery Patients Whose Blood Sugar Was Kept Under Good Control Surgery Patients Whose Doctors Ordered Treatments to Prevent Blood Clots for Certain Types of Surgeries Surgery Patients Given Treatment to Prevent Blood Clots within 24 Hours Before or After Selected Surgeries Surgery Patients Who Were Kept on Their Beta Blockers Before and After Surgery 99.58% 99.98% 100.00% 99.68% 99.63% 100.00% 99.85% 100.00% 65.48% 91.86% 90.77% 96.43% 92.77% 97.35% 97.66% 95.07% 94.28% 95.00% 93.07% 93.99% 0 41 254 193 129 539 549 511 59 189 189 141 Insufficient Data 100% 98% 99% 98% 100% 99% 99% 97% 95% 93% 99% 0 41 247 178 115 515 525 496 54 184 184 143 Insufficient Data Not Computed 100% 98% 98% 98% 100% 99% 99% 94% 97% 94% 98% 10 8 4 7 10 6 8 0 4 2 7 Not Computed Does Not Apply 0 0 0 Does Not Apply 0 0 0 4 1 0 Not Computed 10 8 4 7 10 6 8 0 4 2 7

Overall Domain Score

(Sum of Final Points Earned / Maximum Possible Points)

60.00%

HCAHPS Score Calculations – FFY 2013 Program

National - Baseline Period Indicator

Nurses always communicated well

Benchmark

84.70%

Achievement Threshold

75.18%

Floor

38.98%

Hospital - Baseline Period Hospital - Performance Period HCAHPS Measure Score HCAHPS Measure Score Consistency Points Multiplier Achievement Points

75% 76% 1.00

1

Improvement Points Final Points

(Higher of Achievement or Improvement Points)

1 1 Doctors always communicated well 88.95% 79.42% 51.51% 80% 79% 0.98

Patients always received help quickly from hospital staff 77.69% 61.82% 30.25% 64% 64% 1.00

Patients' pain was always well controlled Staff always explained about medicines before giving them to patients Patients' rooms and bathrooms were always kept clean and quiet 77.90% 70.42% 77.64% 68.75% 59.28% 62.80% 34.76% 29.27% 36.88% 71% 65% 68% 73% 64% 67.00% 1.00

1.00

1.00

Patients were definitely given information about what to do during their recovery at home Patients who gave their hospital a rating of 9 or higher on a scale of 0 to 10 89.09% 82.52% 81.93% 66.02% 50.47% 29.32% 82% 69% 83% 71% 1.00

1.00

Minimum Consistency Points Multiplier

0.98

Overall Domain Score

(Sum of Final Points Earned / Maximum Possible Points) 0 3 2 2 5 4 3 0 0 2 0 0 1 1

Consistency Points 39.00%

0 3

19

3 2 2 5 4

Concerns with Process and HCAHPS Measures

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Process measures – – The full range of Achievement is not possible Minimum case size is 10 – Small hospitals may fall in and out of the program from year to year – CMS exclusion method for “topped out” measures

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HCAHPS measures – Bias based on region, hospital size and type – Weight is too high

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Resulting scores are not evenly distributed, skewed low

Which Measure is Topped Out?

1,200 1,000 800 600 400 200 0

Heart Attack Patients Given ACE Inhibitor or ARB for Left Ventricular Systolic Dysfunction (LVSD) Score Range

2,500 2,000 1,500 1,000 500 0

Surgery Patients Who Received Preventative Antibiotic(s) One Hour Before Incision Score Range

How VBP Scores Translate into Payment Adjustments

• Overall VBP score is calculated by combining domain scores – 70% Process, 30% HCAHPS • VBP score is entered into an equation to determine a payment percentage • Total payments into and out of the pool must be equal (budget neutral)

Process Domain Score: HCAHPS Domain Score: Overall VBP Score: 60.00% 39.00% 53.70% CURRENT ESTIMATE - Prior to Start of Performance Period Payment Percentage: 174.13% CONSERVATIVE ESTIMATE - Assumes Scores Improve Nationally Payment Percentage: 107.40%

340% 320% 300% 280% 260% 240% 220% 200% 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% 0%

VBP Payment Incentive Calculation

Dollars Contributed to VBP FFY 2013 1% Carve-Out $272,000 Expected Payment from VBP

$473,627

FFY 2014 1.25% Carve-Out $340,000 FFY 2015 1.5% Carve-Out $408,000 FFY 2016 1.75% Carve-Out $476,000

$592,034 $710,441 $828,847

FFY 2017 2% Carve-Out $544,000

$947,254

Net VBP Gain

$201,627 $252,034 $302,441 $352,847 $403,254

Estimated Payment from VBP

$292,128 $365,160

Net VBP Gain

$20,128 $25,160

Payment Conversion Line

$438,192 $30,192 $511,224 $35,224 $584,256 $40,256 As more current data for the performance period become available, VBP scores are expected to improve nationwide. As scores improve, the slope of the payment conversion line will move towards the conservative estimate line.

10% 20% 30% Payment Conversion Line - Current Estimate Using National Data 40% 50% 60%

Score

Baylor Medical Center at Irving 70% 80% 90% Payment Conversion Line - Conservative Estimate 100%

New Measures/Domains for the FFY 2014 VBP Program

Domain

FFY 2013 Program

Measure Count Domain Weight

Proposed FFY 2014 Program *

Measure Count Domain Weight Process of Care 12 70% 13 20% HCAHPS (Patient Experience of Care) 1 (using 8 HCAHPS dimensions) 30% 1 (using 8 HCAHPS dimensions) 30% Outcomes (mortality/AHRQ/HACs) Efficiency Other TBD N/A N/A N/A Totals (2 domains) * Only some aspects of 2014 program are final N/A N/A N/A 13 1 30% 20% N/A N/A 28 (4 domains)

Outcomes Domain Measures – FFY 2014 Program Mortality Measures

Mort-30-AMI AMI 30-day mortality (Medicare patients) Mort-30-HF HF 30-day mortality (Medicare patients) Mort-30-PN PN 30-day mortality (Medicare patients)

AHRQ Composite Measures

AHRQ Complication/patient safety for selected indicators (composite) AHRQ

HAC Measures

Mortality for selected medical conditions (composite) HACs • Foreign Object Retained After Surgery • Air Embolism • Blood Incompatibility • Pressure Ulcer Stages III & IV • Falls and Trauma (includes fracture, dislocation, intracranial injury, crushing injury, burn, electric shock) • Vascular Catheter-Associated Infections • Catheter-Associated Urinary Tract Infection (UTI) • Manifestations of Poor Glycemic Control

Concerns with Outcomes Measures

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Mortality measures

– Rates are tightly distributed – Size matters (i.e., law of small numbers) – What will a “survival rate” measure do for public perception? – Rates cannot be duplicated/checked •

HAC measures

– The ACA already mandates a separate payment penalty – Law of small numbers

Proposed Efficiency Domain Measure – FFY 2014 Program

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Medicare Spending per Beneficiary – ACA requires use of efficiency measures in FFY 2014 or thereafter – Must include total Part A and Part B spending per beneficiary – Must include Medicare spending per beneficiary adjusted for age, sex, race, severity, and other factors as determined by the Secretary – CMS is also considering measures of hospital internal efficiency

Proposed Efficiency Measure

One Episode

Three Days Prior: Pre-op lab work Dr. Visit Inpatient Stay Ninety Days Post: Dr. Visit Dr. Visit Rehab ED Visit Dr. Visit

Proposed Efficiency Measure

Average Payment per Episode

Concerns with Proposed Efficiency Measure

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Does proposal satisfy ACA mandate for a measure of “spending per beneficiary”?

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Holds hospitals accountable for all providers’ practice patterns

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Should consider future IOM report and proposal for Medicare bundling demonstrations

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Methodology cannot be replicated – No-one can check/audit CMS’ calculations – Industry does not have access to the data

Data Collection Timeframes – FFY 2014 Program

• Process of Care and Patient Experience of Care Domains * – – Baseline Period: April 1, 2010 through December 31, 2010 (9-months)

Performance Period: April 1, 2012 through December 31, 2012 (9-months)

• Outcomes Domain – Mortality Measures – Baseline Period: July 1, 2009 through June 30, 2010 (12-months) –

Performance Period: July 1, 2011 through June 30, 2012 (12-months)

• Outcomes Domain – AHRQ composite and HAC Measures * – Baseline Period: March 3, 2010 through September 30, 2010 (7-months) –

Performance Period: March 3, 2012 through September 30, 2012 (7-months)

• Efficiency Domain * – – Baseline Period: May 15, 2010 through 90 days prior to February 14, 2011 (9-months)

Performance Period: May 15, 2012 through February 14, 2013 (9-months)

* Proposed

National Performance Standards and Scoring Methodology – FFY 2014 Program

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Same or similar to methods used for process and HCAHPS measures under FFY 2013 program

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Variations to accommodate – Efficiency measure – HAC measures

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Adopted and proposed national performance standards for 2014 program have been published – CY 2012 OPPS proposed rule, Federal Register pages 42,359 - 42,362

Resources

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Contact your State Hospital Association •

VBP final rule – (includes FFY 2013 and FFY 2014 VBP policies) http://www.gpo.gov/fdsys/pkg/FR-2011-05-06/pdf/2011-10568.pdf

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FFY 2012 IPPS proposed rule – http://www.cms.gov/AcuteInpatientPPS/IPPS2012/ (includes FFY 2014 VBP polices)

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CY 2012 OPPS proposed rule (includes FFY 2014 VBP policies) – http://www.gpo.gov/fdsys/pkg/FR-2011-07-18/pdf/2011-16949.pdf

Questions?