Pay for Performance: A Medicare Priority

1. Pay for Performance:A Medicare Priority Rewarding the right care for every person, every time Center for Medicare and Medicaid Services

2. Agenda • Pay for Performance (P4P) and the CMS Quality Agenda • P4P: the next step to improving quality • CMS P4P Demonstrations • Challenges

3. Why Pay for Performance? • Rising costs driving focus to quality, value • Current system rewards quantity, not quality • Private sector initiatives • Public sector interest • Congress • Administration and HHS / CMS leadership • States

5. CMS Vision: Quality Improvement • Provide leadership in improving American health care • The right care for every personevery time • Safe, effective, timely, patient-centered, efficient and equitable(IOM recommendations) • Partners are key

6. CMS Quality Initiatives • Hospitals • Physician Offices • Nursing Homes • Home Health Care • End-stage Renal Disease Treatment (ESRD)

7. P4P: The Next Step in Improving Quality • Data collection infrastructure in place • Pay for reporting encouraged some providers • Quality data now readily available

8. P4P Issues for CMS • What to reward • Relative quality • Absolute threshold • Improvement • How to finance incentives • Across-the-board reduction to create pool • Offsetting penalties • Offsetting savings

9. P4P Benefits for Providers • Benefits • Rewards superior performance and encourages overall improvement • Aligns financial model to professional goals of quality improvement • Focus on volume is diminished as focus on quality is heightened

10. Current CMS Demonstrations and P4P Activities • Hospital Voluntary Reporting • Premier Hospital Quality Incentive Demonstration • Physician Voluntary Reporting Program (PVRP) • Physician Group Practice Demonstration • Section 649 MCMP Demonstration • Chronic Care / Nursing Home P4P • Section 646 Medicare Health Care Quality Demo.

11. Current CMS Demonstrations and P4P Activities • Home Health P4P (in development) • ESRD Bundled Payment Demonstration • Section 721 Chronic Care Improvement Program • Care Management for High Cost Beneficiaries

12. Home Health P4P What’s next

13. HHA Current Status and Preparedness • Deficit Reduction Act: • HHAs shall submit to the Secretary such data that the Secretary determines are appropriate for the measurement of health care quality. • The Secretary shall establish procedures for making data submitted under subclause (II) available to the public.

14. HHA Current Status and Preparedness • Deficit Reduction Act: • HHAs shall submit to the Secretary such data that the Secretary determines are appropriate for the measurement of health care quality. • The Secretary shall establish procedures for making data submitted under subclause (II) available to the public.

15. HHA Current Status and Preparedness • Deficit Reduction Act: • HHAs shall submit to the Secretary such data that the Secretary determines are appropriate for the measurement of health care quality. • The Secretary shall establish procedures for making data submitted under subclause (II) available to the public.

16. What Does DRA Mean for HHAs? • CMS, MedPac and AHRQ1 agree that the current Outcome and Assessment Information Set (OASIS) provide qualitative information on how home health agencies provide care. (1) July 27, 2005 Medicare Payment Advisory Commission (MedPac) testimony before the Senate Committee on Finance, U. S. Senate on pay for performance in Medicare

17. What Does DRA Mean for HHAs? • CMS shall continue to utilize the Home Health Compare2 website whereby home health agencies are listed geographically, so consumers can search for all Medicare-approved home health providers that serve their city or zip code and then find the agencies offering the types of services they need. (2) http://www.medicare.gov/HHCompare/Home/

18. DRA To-Do List • Define the reporting period for DRA that allows payments to be adjusted • Conduct the data analysis necessary to develop the list of HHAs eligible for the 2% market basket increase • Ensure that HHAs not represented by OASIS data are not penalized.

19. Beyond DRAPay-for-Performance • In order to support and implement a P4P Program in Home Health, we are focusing on 4 areas of work: • Performance Model • Payment Methodology • Data Infrastructure • Program Transparency and Public Reporting

20. Next Steps: Pay-for-Performance • Performance Model: • What type of performance model will be applied to P4P? • Achievement (Quality Improvement) • Attainment (Threshold/Benchmarks) • Achievement + Attainment • MedPac Report on value-based purchasing – June 2007

21. Performance Model • Achievement: • Establishes an expectation of performance improvement based on HHA performance on identified set of OASIS outcome measures, past performance, etc: • For example: • Incentive payments based on a specific percentage improvement within one or more quality measures: • HHAs would only be rewarded if a significant number of their patient base experienced improvement in their ability to manage oral medications.

22. Performance Model • Attainment: • Establishes an threshold of performance based on averages (national, geographic, home health agency characteristics, or other demographic). • For example: • Incentive payments on reaching a threshold relative to an HHA’s within a specific quality measure: • HHAs would only be rewarded if their patient base (on average) is able to manage oral medications at the same risk-adjusted rate as their industry peers.

23. Next Steps: Pay-for-Performance • Payment Methodology: • What type of payment methodology will be applied to P4P? • Awaiting MedPac report recommendations • Awaiting Congressional action

24. Next Steps: Pay-for-Performance • Data Infrastructure: • Data collection tool – OASIS • Update current measures • Expand to collect additional outcome and process measures • Patient experience of care data • Maintain QIES data repository contract and measure • Plan for future Integrated Data Repository (IDR)

25. Next Steps: Pay-for-Performance • Program Transparency and Public Reporting: • Nationally endorsed measures • Expansion • DRA: • The Secretary shall establish procedures for making data submitted under subclause (II) available to the public.

26. Home Health P4P Demonstration • Anticipated voluntary, implemented on a state-wide basis • Budget-neutral • Home Health Quality Alliance • Industry stakeholders • Consumers • Payers and Health Plan

27. Home Health Measures Expansion • CMS will work with stakeholders • Focus is on measuring patient experience, outcomes and efficiency

28. In Conclusion • Medicare increasing focus on quality • P4P is here to stay - widespread support • Multiple demonstration projects underway / in development • Early results confirm improved quality outcomes using P4P • P4P can help preserve the Medicare trust fund • Partners are key to success – CMS needs everyone

29. “We are seeing that pay-for-performance works.  We are seeing increased quality of care for patients, which will mean fewer costly complications – exactly what we should be paying for in Medicare.” Mark B. McClellan, MD, PhD CMS Administrator