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MedPAC Advancing Efforts to Link Payments to Quality in PACs

by Elizabeth Hofheinz, M.P.H., M.Ed., September 12, 2019

“Value” is the word of the day, and MedPAC, the Medicare Payment Advisory Commission, is taking it further. They have proposed a new uniform value incentive program (VIP) for all post-acute care (PAC) providers.

Their rationale, in part, is that “Medicare needs to tie its payments to quality of care to incentivize improvement.”

Saying that the current skilled nursing facilities (SNFs) and home health agencies (HHAs) value-based payment programs don’t meet the Commission’s principles, the proposed program will include a “small amount of risk-adjusted, claims-based measures” and that the “data will be pooled over multiple years.”

As for scoring, “performance will be scored using absolute, prospectively set targets. To account for social risk factors, providers with similar shares of dual-eligible beneficiaries will be compared in determining a provider’s reward or penalty. A 5 percent withhold will fund the incentive payments. Medicare margins are high for many PAC providers. A large withhold may be needed to influence behavior.”

The proposed measures are as follows:

  • All-condition hospitalization within the PAC stay
  • Successful discharge to the community
  • Medicare spending per-beneficiary

Saying that “variation in performance across settings results in initial need to score within each setting,” the Commission indicates that as a unified PPS [prospective payment system] is implemented, it would be possible to utilize the same standards across all PAC providers.

Citing the need to take into account, “differences in social risk factors across providers,” MedPAC says that:

  • “Medicare should take into account, as necessary, differences in provider populations, including social risk factors
  • Adjusting measure results for social risk factors can mask disparities in clinical performance
  • Medicare should account for social risk factors by directly adjusting payment through peer grouping”

Asked which of the 4 arenas—nursing facilities, home health services, inpatient rehabilitation facilities and long-term care hospitals—would have the biggest challenges in implementing this and why, Rossana Williams Vice President, Hospital and ASC Strategy, at Ortho Spine Partners in Scottsdale, Arizona, commented, “I do think that accountability in healthcare is crucial to improving patient outcomes, especially in post-acute care facilities, where they often care for our most vulnerable patients. I could see inpatient rehabilitation facilities facing the greatest challenges in implementing this program given the volatility and unknown variables in the responses to treatment as well as widely differentiated therapies implemented to meet the individual needs of each beneficiary.”

“It makes sense to me to initiate implementation in those areas with the most consistent treatment plans, like the skilled nursing facilities, in my mind, where variability is minimized, allowing for clearly defined standards. I do think that universal performance measures should be implemented to improve the fundamental baseline measures such as facility cleanliness, up-to-date licensing, timely reporting of patient progress to designated physician, etc., with clear consequences for lack of improvement in addition to financial incentives for positive performance.”

Look to 2020 for more detail as MedPAC will be modeling the program and then presenting the results.

Read the full report here:

Josh Sandberg

Josh Sandberg is the President and CEO of Ortho Spine Partners and sits on several company and industry related Boards. He also is the Creator and Editor of OrthoSpineNews.

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