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Home Health & Hospice Week

Legislation:

P4P MAY COME KNOCKING SOONER THAN YOU THINK

Published on Mon Jun 06, 2005

Leading lawmakers take action on paying health care providers for quality measures.

You'd better get friendly with your patient outcomes in the next few years, if the Senate Finance Committee gets its way.

Senate Finance Chair Charles Grassley (R-IA) and ranking member Max Baucus (D-MT) introduced the Medicare Value Purchasing Act of 2005 on June 30. The bill calls for basing a portion of Medicare providers' payments on quality measures.

Payment changes for home health agencies would take effect as soon as 2007, according to the proposed legislation. In that first year, HHAs would receive the usual inflation update if they report as-yet-unspecified quality data and the update minus 2 percent if they don't report the data.

Translation: In 2005 payment levels, that would have meant an agency would have received only a 0.1 percent payment increase over 2004 payment levels if it didn't report quality data, points out the National Association for Home Care & Hospice.

In 2008, the Centers for Medicare & Medicaid Services would shave 1 percent off the prospective payment system rate and use those funds for a "quality pool." At the end of the year, CMS would distribute the 1 percent to agencies that meet quality thresholds or that make specified improvements in quality measures.

Between 2008 and 2012, that quality pool would increase by 0.25 percent increments every year to reach 2 percent of total payments based on quality measures, according to a bill summary.

In addition, the quality data CMS uses to set payments would be publicly available, the Senate Finance Committee says in a set of frequently asked questions about the bill.

Stakeholders, including providers, would play a "significant role in determining which measures to use," Sen. Grassley said when introducing the bill.

Watch Out for These Problems

The American Association for Homecare applauds the concept of pay for performance and this bill, AAH says. But there are several pitfalls to watch out for in the legislation, industry representatives warn:
 

  • No pilot. Any P4P system needs a pilot or demonstration project to work out the kinks and avoid payment disaster, agree NAHC, AAH and the Visiting Nurse Associations of America.
     
  • Risk adjustment. CMS must properly risk adjust any measures chosen, AAH notes. Many HHAs feel the current outcome measures involved in Outcome-Based Quality Improvement (OBQI) and Home Health Compare don't use adequate risk adjustment.
     
  • Relevant measures. CMS must use measures over which agencies actually have control, NAHC urges.
     
  • Withhold delay. Waiting until the end of the year to receive 1 percent of payments could present a financial hardship, NAHC warns.
     
  • OASIS changes. Any measures used for payment should include the pending changes to the OASIS tool, NAHC adds.
     
  • Timeframe. The period of time in which CMS compares outcomes should be long enough for agencies' outcomes to show improvement, AAH says.
     
  • Data collection. CMS should limit new data collection for the P4P effort and reimburse agencies for any new data collection expenses, NAHC maintains.

    More Support for P4P

    The House of Representatives looks likely soon to follow in the Senate's footsteps on introducing P4P legislation. House Ways and Means Chair Bill Thomas (R-CA) and Health Subcommittee Chair Nancy Johnson (R-CT) sent a June 16 letter to CMS Administrator Mark McClellan asking for P4P-related details and urging a transition to the system.

    "Medicare pays providers the same whether they deliver excellent care or care that is ineffective, poor quality or out-of-date," the letter says. "It is time to change this irrational system."

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