Home Health & Hospice Week

Will you have to pay for your patients' high rehospitalization rates?

The pay for performance train may have lost steam in recent years, but it appears to be picking up speed again.

"The Centers for Medicare and Medicaid Services (CMS) views implementation of a home health value-based purchasing (VBP) program as an important step in revamping how Medicare pays for health care services, moving the program towards rewarding better value, outcomes, and patient-focused care instead of the volume of services provided," CMS says in a report about P4P -- now called VBP -- which the agency sent to Congress recently. "Using financial incentives to reward quality and improvement in health care, VBP programs aim to hold providers accountable for the quality of care they provide to Medicare beneficiaries, promote more effective, efficient and high quality care processes, and address the variation in quality across care settings."

P4P combats fraud: A VBP program ad-dresses many worries that CMS holds about the industry, the report maintains. It has "significant concerns with fraud and abuse in the Medicare home health benefit," the report notes. And "while the benefit is designed to encourage teams of skilled professionals to provide patient-focused care to homebound beneficiaries, there is growing concern that the existing payment system does not provide the necessary incentives to provide such high quality patient focused care."

And there is the problem of the industry's swift utilization increase in the past decade or so. "Home health PPS has grown rapidly, both in program expenditures and the number of Medicare beneficiaries. HHAs served 3.3 million beneficiaries in 2009, an increase of 10 percent from 2005. How-ever, Medicare spending on HHAs grew at a disproportionate rate relative to the number of beneficiaries, reaching $18.9 billion in 2009, an increase of nearly 50 percent from $12.9 billion in 2005," the reports points out.

CMS has theories about the reasons behind the change. "The disproportionate increase could be attributed to an increase in the reporting of severe conditions among home health beneficiaries, an increase in the number of 60-day payment episodes each beneficiary receives, and increasing numbers of financial outlier cases," the report notes. "In addition, growth in case-mix, not related to real changes in patient health status, may also have contributed to the growth in expenditures."

Watch For These Specifics

A VBP program could help cure many of these problems, CMS suggests. But before CMS can implement a VBP system, it must hammer out the details of some major program elements:

• Measures. The home health P4P demonstration that ran in 2008 and 2009 used these measures: incidence of acute care hospitalization (25 percent), incidence of any emergent care (15 percent), and improvement in bathing (10 percent), ambulation/locomotion (10 percent), transferring (10 percent), urinary incontinence (10 percent), oral medications management (10 percent), and status of surgical wounds (10 percent).

But CMS appears to be ready to go beyond those basics. For example, the report emphasizes the importance of using "patient experience" measures, which most likely means the Home Health Con-sumer Assessment of Healthcare Providers (HH-CAHPS) survey. And CMS raises the idea of using claims data for measures.

Participants in the P4P demo were not thrilled with the idea of using CAHPS data. The survey is too long for their patients, subjective, and open to confusion between medical providers, they told CMS.

Demo agencies also protested the use of emergent care and rehospitalization measures, which were "beyond the HHA's ability to improve, effectively punishing agencies for hospitalizations that were beyond their control," according to the report. HHAs probably won't get much traction on that front, however, with CMS's current focus on reducing hospitalization rates.

• Award criteria. Once CMS does settle on the VBP measures, it will have to decide which scores to reward -- straight-up performance, or also improvement. In the demo, 60 percent of rewards went to top performers while 40 percent went to those who improved most (above a threshold).

Rewarding most improved may increase care quality for those providers, but also may fund substandard care, observers worry.

• Pay source. The P4P demo used savings the Medicare program realized on the group as its pay source. But in a real system, CMS most likely will penalize poor performers to pay for those who perform best or improve the most, experts predict. One suggestion from CMS is to dock agencies' pay rates 2 percent if they fail to make it into a reward-winning category.
• Peer group. Who will you have to compete against to make it into the top VBP categories? In the P4P demo, CMS ranked participants within four multi-state regions. If a P4P system goes nationwide, participants suggested ranking agencies within their own state.
• Data source. The report expresses some hesitancy about basing VBP rewards solely on OASIS data, which is self-reported by agencies. Expect to see other data sources tapped, such as the HHCAHPS survey, claims data, and more.
• Cherry picking. Picking the most desirable patients for a new VBP system is another major concern. CMS must consider ways to counteract potential cherry picking of patients, HHAs told the agency.

Note: CMS's 73-page report to Congress on VBP is at www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/downloads//Stage-2-NPRM.pdf.