Home Health & Hospice Week

You'd better get used to the idea, because experts say pay-for-performance is inevitable.

The time has come to get even friendlier with your patient outcomes, as they may soon determine your Medicare payment levels.

The Medicare Payment Advisory Commission has succeeded in getting payment linked to performance indicators for Medicare Advantage plans and end-stage renal dialysis facilities. Now it wants to the do the same for home health agencies, hospitals and physicians.

In its annual March report, MedPAC recommends that Congress establish "a quality incentive payment policy for home health agencies in Medicare." HHAs come with a ready-made set of indicators to set payment levels upon, MedPAC notes - the outcome-based quality improvement standards, including the 11 currently posted on the Home Health Compare Web site. And MedPAC is especially laudatory of the OBQI measures endorsed by the National Quality Forum (see Eli's HCW, Vol. XIV, No. 7).

The advisory body to Congress doesn't want to stop at the OBQI measures though. It also recommends using outcome-based quality monitoring measures, otherwise known as adverse events.

But MedPAC does admit that the Centers for Medicare & Medicaid Services can't use the adverse events in their current, non-risk-adjusted form. So MedPAC also recommends that CMS "develop a valid set of measures of home health adverse events, including adequate risk adjustment."

Once the risk adjustment is in place, CMS can use both the OBQI and OBQM measures to affect how much HHAs get paid, the report says.

Not Whether, But How and When

Law- and policy-makers love the idea of pay for performance, so providers had better get used to the idea. "You might as well argue against motherhood or democracy," quips Bob Wardwell with the Visiting Nurse Associations of America.

But CMS must work hard to make sure the quality measures used to influence payment truly reflect quality of care differences, says Wardwell, a former top CMS official. "It's hard to imagine that we are ready for prime time" with the current measures and risk-adjustment formulas, he says.

MedPAC offers few specifics on implementing P4P, notes William Dombi with the National Association for Home Care & Hospice's Center for Health Care Law. "MedPAC has merely set the stage."

HHAs can help shape how the payment idea becomes reality. "P4P has a long way to go in terms of design and implementation," Dombi says. "We will be involved all the way." The American Association for Homecare notes it has a task force developing a P4P model to present to MedPAC, CMS and Congress.

Editor's Note: MedPAC's chapter on P4P is at www.medpac.gov/publications/congressional_reports/Mar05_Ch04.pdf.