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CMS amps up value-based payments in 2018 as other quality issues fall by the wayside


Risk was the buzzword for healthcare quality and safety in 2018 as the CMS strongly pushed its value-based payment agenda. But the agency gave mixed signals about other patient-safety issues.

The CMS spent 2018 forcefully supporting the transition to value-based payment. The agency announced it would force Medicare accountable care organizations to assume downside risk sooner and that a mandatory oncology payment model would be released soon.

“CMS has really made it clear that their energy is behind alternative payment models that feature downside risk for providers and that the days of one-sided risk are numbered,” said Dr. Mark Friedberg, a senior policy researcher at the RAND Corp.

The risk-based agenda is in stark contrast to 2017 when HHS was headed by Dr. Tom Price. During his short tenure, mandatory bundled-payment models were rolled back and the industry was uncertain about where the shift to value was headed. The confirmation of Alex Azar as HHS secretary at the start of 2018 signaled a shift.

“Under the Obama administration there was a lot of emphasis on value-based payment but not as much on burden, and under Tom Price there was a lot of attention to burden but a real rollback of value-based payment. Secretary Azar has suggested an interesting middle ground,” said Dr. Karen Joynt Maddox, assistant professor of medicine at Washington University School of Medicine.

The backing of risk-based payment has rippled beyond the CMS’ authority, and the industry as a whole is moving toward value-based payment, said Francois de Brantes, senior vice president of commercial business development at healthcare consultancy Remedy Partners.

“I’m not hearing any resistance against taking financial risk on payment. I’m getting calls asking, ‘How do we expand this?’ We are willing to take on risk.’ So that mindset I think has completely shifted,” he said.

Providers are quick to admit that the push to value is full steam ahead.

“Moving to risk in some form or another—upside, downside, both sides, pay for performance—all of that has definitely become a reality almost everywhere. That is very real across the Carolinas and across the footprint of Atrium Health,” said Dr. James Hunter, chief medical officer of the Charlotte, N.C.-based health system.

Atrium, which plans to merge with Navicent Health, is working on ways to reduce hospital admissions and readmissions by focusing on the continuum of care, including coordinating outpatient and home health services with acute care.

“I think the landscape now of population health is very real,” he said. “To be successful you need to get more data and to improve across the whole continuum.”

But not everyone is convinced the CMS’ actions are good. Dr. Don Berwick, former acting CMS administrator and president emeritus of the Institute for Healthcare Improvement, questioned if the movement to value-based payment is meaningfully changing the healthcare landscape.

“Volumes have gone up and costs aren’t falling—it’s a different way to spend the same money,” he said in an interview with Modern Healthcare at the IHI’s conference in Orlando, Fla., earlier this month.

CMS programs and models that have been implemented to achieve value-based payment don’t appear to be changing practice behavior but instead are causing arguments over risk adjustment and measurement, he said. This year, hospitals that participate in the CMS’ Hospital Readmissions Reduction Program were separated by proportion of dual-eligible inpatient stays after long-held complaints from safety-net providers that they were unfairly penalized under the program.

“There are risk-adjustment games. Once we are going to work on value, I (a provider) have to prove to you even more that my patients are sicker, and it’s like, c’mon, we are here to produce health, why are we talking about the math?” Berwick said.

He added that he supports global budgeting, which is when hospitals are given a predetermined budget for the year, usually by the state. He said the model encourages hospitals to focus on preventing disease rather than hospitalizations.

Unlike the movement to value-based payment, the CMS wasn’t as clear this past year about safety and quality issues. The agency followed through with its plan to remove quality measures—mostly infection measures—from the Inpatient Prospective Payment System in an effort to eliminate administrative burden. It also only has two new patient-reported outcome measures on the docket that may be added to CMS programs even though there is widespread buy-in that these measures are the future of quality measurement.

“There is just not a very straightforward consistent policy of saying these patient-safety events aren’t tolerable. Turning the dial on moving away from fee-for-service is incredibly consistent but on the patient-safety and quality front, it’s not as consistent,” de Brantes said.

The ambivalence toward patient safety is also evident in the provider space, said Derek Feeley, CEO of the IHI.

“We can see patient safety falling off the radar of leaders and the diverging of views about where patient safety is going next. And frankly sometimes just complacency that safety was something we had done,” he said. “Safety is not something we have done. Safety is something we ought to be doing every single day.”

Feeley said provider leaders seem to be too distracted by shifting payment models and merger activity to focus intently on quality and safety.

Hunter at Atrium said hospitals are facing “serious competing priorities.” In order to keep patient safety a priority, Atrium has focused on how quality-improvement efforts usually lead to cost savings because efforts focus on standardization of practice and harmful or unnecessary care.

“There is a clinical and patient-safety way to get to the financial pressures,” he said.

Hunter added that much of the focus right now for Atrium and other health systems is to transition patient-safety practices, which have largely started in the acute-care space, to the ambulatory and home health environments.

Along with its eye on risk-based contracts, the CMS continued its focus on transparency for consumers with mixed results. As mandated by the 21st Century Cures Act, the CMS launched the Procedure Price Lookup tool, which allows Medicare beneficiaries to find the national average Medicare pays for certain surgeries at hospitals and ambulatory surgical centers. But the agency also struggled to improve the hospital star ratings on Hospital Compare. July marked the second time the Trump administration delayed the star ratings in response to a backlash from stakeholders who say they aren’t an accurate representation of hospital quality. The CMS plans to update the star ratings in February 2019 after a 14-month delay, but hospital lobbying groups were still displeased with the changes the agency came up with, calling them minimal.

“We saw this year, yet again, that this is hard to do,” RAND’s Friedberg said. “The star ratings are one of the best products out there. They are the most transparent, the most vetted of all the performance sites … and yet they are having problems, so it just goes to show how hard this is and how far we have to go.”

De Brantes said the pressure from consumers for a site like the star ratings will only grow in the years ahead, so the CMS will need to focus on it in more seriously eventually.

“I don’t think anyone can do this outside of the federal government. There are attempts by the private sector to do this but they end up being self-serving. I think the pressure from the (younger) generation will exert itself and it will happen,” he said.