Starting next week, some hospitals that receive Medicare reimbursements will be subject to a program that changes how they are paid.
Starting Oct. 1 as part of the Affordable Care Act, some Medicare providers will take another step toward a system that bases payments not on the procedures performed but on the effectiveness of the care provided – as measured by statistics and surveys filled out by patients.
“There is absolutely no question that we’re moving away from a system that pays per procedure to a system that pays based on outcomes. … (We’re) looking at that as a fundamental shift in the way the system is designed,” said Tom Bell, president of the Kansas Hospital Association, in a recent interview.
“For years, if someone comes in, they (Medicare) pay you, and now they don’t. The quality is considered,” said JoAnn Paul, director of quality and infection control for Wesley Medical Center.
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For fiscal year 2013, Medicare will withhold up to 1 percent of reimbursement funds from some hospitals. Those funds will be released to hospitals if they show that the care they provide surpasses national benchmarks. The amount withheld increases to 2 percent in 2014. Some of those benchmarks involve 17 publicly reported clinical measures that are related to care for heart attacks, heart failure, pneumonia and surgical care. Mortality rates will eventually be included in the measures as well.
A portion of reimbursements will also depend on how hospitals fare in surveys the hospitals conducts with patients.
“I call it the ‘hotel measurements,’ ” said Steve Nesbit, chief medical officer for Via Christi Health.
“The patient’s perception of care is something that’s different for everyone, but it is truly about communication. … As we improve efficiencies and the flow, (patients) are going to sense that and will probably score us a lot higher,” he said.
The value-based purchasing program, as the new system is described, will affect 43 inpatient prospective payment system (IPPS) hospitals in Kansas, which includes community hospitals and some surgical hospitals. It does not affect 83 critical access hospitals in Kansas that are located in rural areas and are reimbursed differently. Five Kansas IPPS hospitals were excluded in the program for this year because they did not have enough data or patients, according to Cindy Samuelson, vice president of member services and public relations at the Kansas Hospital Association.
Millions at stake
For Via Christi’s Wichita hospitals, an estimated $1.3 million is on the table.
Wesley Medical Center declined to provide an estimate of how much money it thinks is at stake.
Health care providers have some concerns about patients scoring the hospital poorly if they do not agree with a health care provider’s recommendations – or even if they don’t like the low-fat, low-sodium hospital meals.
“The big question is ‘Does patient satisfaction equate with quality care?... They’re not happy, but what’s best?’ There can be a bit of a disconnect there,” Paul said.
Patients need to understand their role in improving their health – as well as how their survey responses could make a big difference in terms of hospital reimbursement, Paul said.
Nesbit said most hospitals are meeting about 95 percent of the benchmarks that have been established, and that could skew the bell curve for quality standards. On the one hand, it’s good that so many are compliant, but that can make it harder for hospitals to receive reimbursement.
“My sense from the statistical standpoint is that if you’re not bumping up against 100 percent, you’re probably not going to get the full dollars,” Nesbit said.
The hospitals will also be judged on things such as hospital-acquired infections, if a foreign body has been left inside of a patient following surgery, if a patient has to be readmitted to the hospital for the same ailment or if a patient developed a blood clot after treatment. Hospitals will have the burden of proof to show their care did not result in those conditions if they occur, Paul said.
Nesbit said he doesn’t think the new value-based purchasing program will have much of an impact on day-to-day operations at the hospital, which already focuses on quality and improvement.
“Patient-centered care means a lot of different things to different people, but to me, it means putting yourself into patients’ shoes,” Nesbit said. “We’re just going to keep doing what we’ve been doing.”
The long-term effect, he said, will include more requirements and standards over time and eventually the insurance companies will pick up on the quality standards, which Nesbit thinks is positive.
Hospitals will be informed of the reimbursement amounts by Nov. 1 based on their current data and will have three months to challenge those figures if they so choose, Nesbit said.