Dianne Feeney, Associate Director for Quality Initiatives

1. Improving Patient Quality & Cost Outcomes: Connecting with the Health Information Exchange/CRISP June 1, 2011 Dianne Feeney, Associate Director for Quality Initiatives MARYLAND HEALTH SERVICES COST REVIEW COMMISSION

2. _______________________Background

3. State of Maryland • 5.65 Million people • 12% of population > age 64 • 3rd highest income per capita state • 46 acute care hospitals • $13 billion in hospital revenue • 700,000 discharges per year

4. Maryland HealthRegulatory Agencies HSCRC Hospital Regulation . Governor of Maryland Maryland Insurance Administration Department of Health & Mental Hygiene Maryland Health Care Commission Health Services Cost Review Commission Regulates Core Health Functions: Medicaid Program Public Health Licensing/Certification Regulates: Cert. Of Need Report Cards Small Group Insurance Regulates: Rates/Costs Of Acute care Hospitals

5. Background: HSCRC and the All Payer System • Law enacted in 1971; First set rates in 1974. • Goals were to correct major problems. • Control rapid cost growth • Improve access to care • Make the system equitable • Provide accountability and transparency • Ensure financial stability and predictability for hospitals and patients • Key Components. • All Payer System • Waiver Test • Funding for Hospital Uncompensated Care • Charge per Case (CPC) system

6. HSCRC Quality Initiatives • Quality Based Reimbursement (QBR) • Maryland Hospital Acquired Conditions (MHAC) • Readmission Initiatives: • Maryland Preventable Hospital Readmissions (MHPR) • Admission-Readmission Revenue Hospital Payment Constraint Program (ARR)

7. ___________________________Readmission Initiatives

8. Why Address Readmissions? • Research shows hospital readmissions are sometimes indicators of poor care or missed opportunities to better coordinate care, or poor quality care in the hospital. • For Medicare, 18% of all Medicare patients discharged from the hospital have a readmission within 30 days of discharge, accounting for $15 billion in spending nationally (Medpac 2007). • For Maryland, the Medicare readmission is the second highest in the nation at 22%. • Initiatives need to be put in place that reward efforts that reduce the number of readmissions and that also increase the quality of care and decrease cost.

9. Readmission Incentive Programs: MHPR and ARR Initiatives • Maryland Hospital Preventable Readmissions (MHPR) Initiative - Using the PPR methodology as the basis, the MHPR initiative provides a system of payment incentives based on the added or averted resource use resulting from a hospital’s actual number of readmissions versus a statewide target rate. PPR Definition: A Potentially Preventable Readmission (PPR) is a readmission that is clinically-related to the initial hospital admission that may have resulted from a deficiency in the process of care and treatment or lack of post discharge follow-up. • Admission-Readmission Revenue (ARR) Initiative – Hospitals may volunteer for the ARR pilot to begin July 1, 2011. Hospitals under ARR will be held to a standard Charge per Episode (“CPE”) that would provide a combined revenue constraint for both initial admissions and subsequent readmissions. • ARR provides a strong financial incentive to put in place the care coordination mechanisms/infrastructure necessary to reduce the potential for any patient to be readmitted and keep 100% of the savings associated with that outcome.

10. Ensuring Accountability and Quality of Care for Bundled Payment Structures • Patient Protection and Accountable Care Act- as providers are gradually given more responsibility and budgetary autonomy for reducing utilization, they also need to be held accountable to the public for more efficient and effective operation. • To address unintended consequences, inject rational financial incentives through: • use of robust risk-adjustment systems and methods to account sufficiently for variations in illness severity of patients and appropriately match payment to the required level of resource use; and • use of outlier payments and exclusions for unusual cases. • In order to achieve maximum improvements in the value of the care delivered over the long-term, financial incentives should be focused equally on improving quality and containing cost. • Also monitor other utilization trends and system performance metrics over time.

11. Maryland PPR Impact in 2007 for a 15 Day Readmission Time Interval • 472,380 admissions were candidates for having a subsequent potentially preventable readmission • 31,873 admissions were followed by one or more PPRs • PPR rate is the percent of candidate admissions that were followed by one or more PPRs • PPR Rate 6.75 = 31,873 / 472,380 • 38,840 admissions were indentified as PPRs • PPRs account for $430.4 (5.3%) million in charges and 199,582 hospital bed days

12. Maryland PPR Impact in 2007 for a30 Day Readmission Time Interval • 452,863 admissions were candidates for having a subsequent potentially preventable readmission • 44,417 admissions were followed by one or more PPRs • PPR rate is the percent of candidate admissions that were followed by one or more PPRs • PPR Rate 9.81 = 44,417 / 452,863 • 59,599 admissions were indentified as PPRs • PPRs account for $656.9 million (8%) in charges and 303,865 hospital bed days

13. ____________________________Focus: Unique Patient Identifier

14. Maryland Statewide Health Information Exchange- CRISP • Chesapeake Regional Information System for our Patients (CRISP) • Designated Health Information Exchange (HIE) by the Office of the National for Health Information Technology • a 501(c)(3) corporation with a mandate to electronically connect all healthcare providers in the state. • CRISP’s infrastructure uses a hybrid-federated model that is supported by two technology vendors. Axolotl Corporation, an Ingenix company, provides the core infrastructure and Initiate Systems, an IBM company, provides the master patient index (MPI) technology.

15. Proposed New Data Fields Yes*- Required Only if data provided by patient

16. Matching CRISP and HSCRC Data for Readmission Analysis • Using the patient information submitted by the hospital, CRISP will create a master patient index (MPI) for each unique patient using a probabilistic matching algorithm. • CRISP will be required to provide reports to the HSCRC at the patient level which will include at least the following fields: • Enterprise MPI Number • Hospital/Facility ID • Medical Record Number • Date of Admission • Date of Discharge • The exact list of fields that will be required to match the report from CRISP to HSCRC’s data set will be determined based on the analysis of a pilot data set. HSCRC may require CRISP to use an HSCRC algorithm to generate a supplemental HSCRC ID for the purposes of matching against other hospital reported data.

17. Anticipated Timeline for Regulation Promulgation • 4/15 - Commission Meeting: Final Staff Policy Recommendation presented and approved • 6/17 -  Regulation for Proposed Action posted in Maryland Register with Comment Period through August 1 • 8/3 - Commission Meeting Regulation Ripe for Final Action • 12/1 - Regulation Becomes Effective • HOSPITALS ESTABLISH CONNECTIVITY WITH CRISP • June through November

18. _______________________Appendix: Readmission Data

19. Maryland Rates of PPRs PPR rates consistent between two years

21. Top 15 Reasons for PPRs - 2007 Top 15 PPRs represents 42% of charges on PPRs for a 30 day readmission time window

22. Top 15 Initial Admissions followed by one or more PPR - 2007 Top 15 represents 35% of all initial admissions followed by PPRs

23. Top Five PPR Reasons for an Initial Admission of Heart Failure - 2007

24. Length of Stay and Charges for Initial Admissions Followed by a PPR within a 30 Day Readmission Time Interval - 2007 Patients readmitted had a longer LOS than those not readmitted.