Posts Tagged ‘Partnership for Patients’

CMS’ Value-Based Purchasing Program Is In the Works

Wednesday, March 28th, 2012

The Department of Health and Human Services (HHS) is formulating a new initiative to reward hospitals for the quality of care they provide to Medicare patients and reduce healthcare costs.  Authorized by the Patient Protection and Affordable Care Act (ACA), the Hospital Value-Based Purchasing program marks an historic change in how Medicare pays healthcare providers and facilities — for the first time, 3,500 hospitals nationwide will be paid for inpatient acute-care services based on care quality, not just the quantity of the services they provide.

This initiative supports the objectives of the Partnership for Patients, a public-private partnership that will help improve the quality, safety and affordability of health care for all Americans.  The partnership has the potential to save 60,000 lives and up to $35 billion in U.S. healthcare costs over the next three years, including up to $10 billion for Medicare.  Over the next ten years, the Partnership for Patients could reduce costs to Medicare by about $50 billion and result in billions more in Medicaid savings.

“Changing the way we pay hospitals will improve the quality of care for seniors and save money for all of us,” said HHS Secretary Kathleen Sebelius.  “Under this initiative, Medicare will reward hospitals that provide high-quality care and keep their patients healthy. It’s an important part of our work to improve the health of our nation and drive down costs.  As hospitals work to improve their performance on these measures, all patients – not just Medicare patients – will benefit.”

The Hospital Value-Based Purchasing initiative is just one part of a broad effort by the Obama Administration to improve the quality of health care for all Americans, using important new tools provided by the ACA.  The Partnership for Patients brings together hospitals, doctors, nurses, pharmacists, employers, unions, and state and federal government committed to keeping patients from getting injured or sicker in the health care system and improving transitions between care settings.  The Centers for Medicare and Medicaid Services (CMS) is investing up to $1 billion to drive these changes.  Additionally, proposed rules allowing Medicare to pay new Accountable Care Organizations (ACOs) to improve coordination of patient care are also expected to result in better care and lower costs.

In essence, the program rewards hospitals that perform well on quality measures relating both to clinical process of care and to patient experience of care, or those making improvements in their performance on those measures.  Hospitals that meet performance criteria will receive higher compensation.  The hospital value-based purchasing program, which is expected to become effective in fiscal 2013 for payments for discharges occurring on or after October 1, 2012, would make value-based incentive payments based on how much the hospitals’ performance improves certain quality measures during a baseline timeframe.  The better a hospital’s performance or improvement during the performance period, the higher the hospital’s value-based incentive payment would be, according to CMS.

According to CMS estimates, approximately 50 percent of the facilities participating in this Hospital Inpatient Value-Based Purchasing program will receive a net increase in their Medicare payments.  The other half will see a net decrease.  Neither the increase nor the decrease will exceed one percent in the first year, CMS said.  The better-performing hospitals in the first year have the potential to receive value-based incentive payments totaling as much as two percent of Medicare reimbursement, or a net one percent extra,  CMS sees the program as “the next step in promoting higher quality care for Medicare beneficiaries.”  When the program gets underway, CMS said, the government will reward hospitals on the basis of “actual quality performance,” and not just data.

Jean Moody-Williams, director of the Quality Improvement Group within CMS’ Office of Clinical Standards and Quality, said the Hospital VBP Program is funded by a one percent withholding from participating hospitals’ diagnosis-related group (DRG) payments; hospitals excluded from the program will not have that one percent withheld from their DRG payments.  “The goal of CMS through the Hospital Value-Based Purchasing Program is to link payments to quality outcomes,” Williams said.  “We really are starting to get away from asking, ‘How much did you do?’ to ‘How well did you do and how was it for the patient?'”

The American Hospital Association (AHA) has serious reservations about the program, noting that “CMS has not met its requirements with respect to certain measures.  This failure will unfairly and adversely impact the hospital field and even undermine the intent of the law, which is to provide opportunities for hospitals to improve their performance.”

According to the AHA, the problem “is exacerbated in the outpatient PPS (prospective payment system) rulemaking cycle because it builds on policies that fail to comply with the law’s requirements.” AHA also expressed concern with how the agency handled the notice and comment process for the hospital VBP program, which “made significant changes to this program in three separate regulations,” and suggested that the agency choose a single regulation in which it will make any future changes to the program.

What’s at Stake? Medicaid, Not Medicare

Monday, June 27th, 2011

Seventy percent of Americans oppose cuts to Medicare and 57 percent are against cutting Medicaid, even when they are aware that the programs constitute an outsized weight in the federal deficit.  Of the two wildly popular programs, Medicaid is the most vulnerable.

Writing in the Washington Post about a report from the Kaiser Family Foundation about the health of Medicare and Medicaid, Ezra Klein says “It doesn’t matter whether Eric Cantor says he’s bargaining for the Ryan budget or not.  The GOP cannot privatize and voucherize Medicare.  They can’t even get close.  It’s too easy an issue for Democrats, too dangerous an issue with seniors, and too slipshod a policy even for Michele Bachmann.  The attack on Medicaid, however, is another story.  That one might actually work.  And if it does, it’ll actually be worse.  ‘in-the-know political circles,’ says Chris Jennings, who ran President Bill Clinton’s healthcare reform efforts, ‘it’s just assumed Medicaid is going to be hit.  No one is going to want to touch Medicare.  Medicare is where the political juice is.  But we’re going to need savings.  So that leads to Medicaid.’  There are two reasons Medicaid is more vulnerable than Medicare.  The first is who it serves.  Medicaid goes to two groups of people: the poor and the disabled. Most of the program’s enrollees are kids from poor families, though most of the program’s money is spent on the small fraction of beneficiaries who are disabled and/or elderly.  These groups have one thing in common: They’re politically powerless.”

It’s a little-known fact that Medicaid covers more people than Medicare. In 2010, according to the Department of Health and Human Services, Medicaid covered 53.9 million people, compared with Medicare’s 47.3 million.  Additionally, Medicaid patients are also among society’s most vulnerable.  “Kids (and) pregnant women are the vast majority,” according to Health and Human Services Secretary Kathleen Sebelius.  “But then older seniors, many of whom are in nursing homes…and very disabled individuals” are also covered by Medicaid.

Although states and the federal government share the cost of Medicaid, what grates on some governors is the rules that come with the money.  “Governors just want flexibility to run our states,” said Republican New Jersey Governor Chris Christie at the annual National Governors Association meeting in February. “We don’t want to pay 50 percent of the cost of Medicaid and have zero percent of the authority.  And I don’t think that’s an unreasonable thing to be asking for.”  Governor Haley Barbour of Mississippi agrees.  “If I could get total flexibility, I would take a two percent cap in a heartbeat,” he said.  Barbour’s preference is to receive a lump sum – what it gets now from the federal government, plus two percent to fund Medicaid.

Dr. Donald Berwick, administrator of the Center for Medicare and Medicaid Services, (CMS) said “There’s a right way to reform Medicare and a wrong way,”  Berwick believes that the direction he is taking — modeled on his successful patient safety campaigns at the Institute for Healthcare Improvement – will bring about needed healthcare change.  The Obama administration’s efforts to improve patient safety are more or less bipartisan.  There is little cause to dispute CMS’ data: the agency spent $4.4 billion in 2009 caring for patients harmed in hospitals and an additional $26 billion on patients who were readmitted within 30 days.  The Partnership for Patients, funded through the Patient Protection and Affordable Care Act (ACA), seeks to reduce preventable injuries by 40 percent and cut hospital readmissions by 20 percent in just two years.  According to CMS, achieving the Partnership’s goals will result in 1.8 million fewer patient injuries, allow more than 1.6 million patients to recover complication-free and save up to $35 billion in health costs.

Department of Health and Human Services (HHS) Secretary Kathleen Sebelius described contentious portions of the ACA as the inaugural steps toward entitlement reform.  Sebelius criticized proposals to transform federal Medicaid funding into block grants for states.  When some lawmakers asked her to speak about the Obama administration’s alternative proposal to rein in entitlement spending, Sebelius pointed to two provisions of the new law.  The ACA created a new board of independent experts that will recommend Medicare payment cuts.  Its recommendations will take effect automatically unless Congress blocks them — and proposes equivalent savings.  According to Sebelius, the panel represents “a big step in terms of entitlement reform that actually doesn’t potentially cause harm to our seniors.”  She also pointed to an HHS effort to create new methods of dealing with people who are eligible for both Medicare and Medicaid because those patients represent a lopsided share of the programs’ costs.

Medicare Cuts To Total $120 Billion

Tuesday, June 7th, 2011

The Patient Protection and Affordable Care Act will save Medicare $120 billion over the next five years as a result of lower payments to insurers and hospitals.  According to the Obama administration additional steps to cut fraud and abuse are providing promising results.  Medicare Deputy Administrator Jonathan Blum said that the healthcare overhaul is working, resulting in real savings and making program more efficient.  Payment reforms are improving quality, performance and slashing costs.  When President Barak Obama signed the healthcare bill, one major goal was to cut spending on Medicare.

“Just a year after passage, we are seeing savings in Medicare begin to materialize from provisions in the Affordable Care Act,”  said Donald Berwick, M.D., administrator for the Centers for Medicare and Medicaid Services (CMS).  “This work is laying the groundwork for a larger transformation of Medicare and our healthcare delivery system, from simply paying for the volume of services provided to rewarding the quality of care delivered.  We remain committed to achieving a healthcare system that pursues better care, better health, and lower cost through improvement.”

In addition to the projected savings, Medicare is on track to improve the quality of care members receive.  CMS has implemented quality improvements and delivery system efficiencies including providing new preventive benefits, tying payment to quality standards, investing in patient safety and offering new incentives to providers who deliver high-quality, coordinated care.  “These actions will produce savings, create incentives for greater efficiency in care delivery and lay the groundwork for a long-term transformation of our healthcare system as well to make it safer and prevent injuries and unnecessary readmissions to hospitals which not only harm patients but increase overall healthcare costs,” according to a CMS analysis.

Cutting Medicare spending was a priority of the healthcare overhaul that President Barack Obama signed into law in March 2010.  The law is projected by the Congressional Budget Office to reduce deficits by $143 billion, partly through almost $500 billion in cuts and savings from the Medicare program over a 10-year period.  Blum said the savings are in line with expectations by the Obama administration.  “We’re very much consistent with where we thought we would be,” he said.

The savings come at a cost, of course.  Cuts in physician reimbursement represent a 31 percent reduction. If the cuts are adjusted for practice-cost inflation, the American Medical Association says Medicare payment rates to physicians in 2013 will total less than half of what they were in 1991.  “If we can’t fix this, the impact on physicians and physician practices is going to be devastating,” said Alan C. Woodward, M.D., Massachusetts Medical Society president.  “Many practices are barely surviving now.  Coupled with the ongoing problem of soaring professional liability costs, Medicare reimbursement is a critical issue for physician-practice viability,” Dr. Woodward said.  “Failure to solve the Medicare problem will only further endanger older patients’ access to needed healthcare services.”

Writing on the White House Blog,  Deputy Chief of Staff and healthcare czar Nancy-Ann DeParle says that “Many of these reforms were made possible by the Affordable Care Act.  The new law rewards doctors and hospitals for providing high-quality care and offers new tools to help law enforcement and the Medicare program crack down on waste, fraud and abuse.  Other steps like improving care for patients with disabilities and bringing down the cost of durable medical equipment build on initiatives undertaken at CMS that will also reduce costs.  And we recently announced the launch of the Partnership for Patients, a new public-private partnership that will help improve the quality, safety, and affordability of health care for all Americans.  Already, more than 3,000 organizations, including 1,500 hospitals, have signed a pledge to become part of the Partnership for Patients.  This has the potential to save up to $10 billion for Medicare through 2013.”