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CMS Plan Would Tie Efficiency Scores to Hospital Payments

Cheryl Clark, for HealthLeaders Media, May 2, 2012

'Unfair'
Cheryl Rayl, CEO of the 48-bed Allegiance Hospital in Midland, the most expensive cost per beneficiary hospital, says she was surprised to see her hospital listed at the high end. Allegiance operates primarily as a 39-bed psychiatric hospital, she says, and rarely do its psych patients require acute medical care, which is provided in its nine medical beds.

"The most expensive thing I do over there (for psychiatric patients who occasionally need medical care is insert an IV," she says. "We don't do surgery. We don't deliver babies. We don't have an intensive care unit or telemetry. This doesn't make sense to me."

'Putting reimbursements at risk'
CMS officials say that these cost efficiency scores are risk adjusted for age and severity of illness, so cancer or other specialty hospitals that treat more severely ill patients are fairly compared. 

But the measure has not yet received the endorsement of the National Quality Forum, an approval CMS says its seeks. And some hospital leaders are worried about whether the risk-adjustment and scoring system are fair.

Blair Childs, senior vice president of public affairs for Premier healthcare alliance, a network of 2,400 hospitals and other health providers, says he is concerned that "CMS is putting reimbursements at risk based on an unproven Medicare spending per beneficiary measure as part of value-based purchasing. While the measure in principle has merit, it still has not been tested and can’t be replicated," he said in a statement.

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