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Rural Hospital CEO: CMS Star Ratings Use 'Slanted' Metrics

Analysis  |  By John Commins  
   August 03, 2016

Margaret Mary Health is among the top-scoring hospitals in the nation. Still, its CEO isn't satisfied.

Tim Putnam, CEO of Margaret Mary Health, says he wasn't surprised by the 4-Star rating the 25-bed critical access hospital in Batesville, IN, received last week from the Centers for Medicare & Medicaid Services.

"We take our work seriously. We always strive to be a high-performing institution and we measure ourselves against the best healthcare delivery systems we can find, focused on patient and staff satisfaction," says Putnam.

According to CMS, only 102 (2.2%) of the nearly 5,000 rated hospitals earned five stars, and only 934 hospitals, about 20.3% earned four stars, including Margaret Mary Health.


Related: CMS Releases 5-Star Hospital Quality Rankings


"We've been in the National Rural ACO, which has focused on a lot of quality measures and helped us figure out where we needed to be," Putnam says.

"We are constantly comparing ourselves with others in what we can do better and searching for best practices. That's been pretty active for the last three years, so we didn't anticipate being surprised by the star ratings."

Putnam says that Margaret Mary's membership in the National Rural ACO and in the Suburban Health Organization, a group of eight hospitals in the Indianapolis area, has provided a framework for improvement.

"When you look at all the hard data you have on how you are delivering care, it makes you look at all the data a lot more closely," he says.

"You find out who is doing well and you have a way to find out how to improve your processes because you know they do well and they want to see you do well. This small network of hospitals has shared a lot. A lot of this is an informal process of working together to improve."

In one telling example, Putnam recalls that Margaret Mary clinicians and administrators were baffled by their relatively high pneumonia mortality statistics.

"We were scratching our heads trying to figure out why," he says. "We work with a great infectious diseases physician. We have a lot of histoplasmosis in the area and a lot of COPD, but why is our pneumonia mortality so high?"

"As we got down to it, our processes were good, but our charting of severity of illness was not," he says.

"When we looked at it, our case mix index, our severity of inpatients for all of our Medicare patients, was 1.0. When we had it assessed, we found out that our real severity of illness should have been 1.4 or should have reflected the real disease process going on."

Medicare Pays on Cost of Illness, Not Severity

The problem, it turns out, was that Margaret Mary didn't compare well with general acute care hospitals, because critical access hospitals aren't paid on severity of illness. They're paid on cost.

"By and large we don't document that well," Putnam says. "We're paid on our costs, so how severe the illness is on the Medicare report doesn't get charted. When we looked at the (prospective payment system) hospitals, they are paid on severity of illness, so they track that very carefully and report that very carefully."

"When we figured out what other hospitals were doing and how to do it correctly, all of a sudden our pneumonia scores are accurately reflecting what is going on."

Even though Margaret Mary got a relatively high score, Putnam says he is not satisfied with the rating, neither for his hospital, nor for all hospitals with a mission to improve community health and serve anyone.

Many of CMS's 5-Star hospitals, he says, are niche and specialty hospitals that don't have an open emergency room. "So, they don't take all of the community. They don't take everyone coming through the door," he says.

'Slanted' Metrics

"I don't know all the metrics that go into the rating system, but it is definitely slanted. If you can pick and choose your patients, you do better on the ratings. From the community hospital's perspective, where you are serving and benefitting the whole community, they don't fare as well, yet I know they do an excellent job, especially given their patient population."

It's frustrating, he says, because "ratings only tell a small portion of a story of any hospital. When I look at the ratings, I see some hospitals that are very solid institutions that provide great care and are not ranked very highly. I don't like to see anything that discourages the patients' confidence in their local community hospitals." 

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


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