I'll See Your 10 HACs and Raise You Three

When I read the phrase "value-based purchasing," I can't help but also think of another saying we hear frequently these days: "high-value target." Value, in both of these cases, means someone will be paying a steep price—presumably for the better of society.

For hospitals, it means CMS is tightening its purse strings on 10 hospital-acquired conditions, plus three never events starting in fiscal year 2009. While this reform has been a long time coming, it is the first time that nonpayment could occur for thousands of hospitals across the United States.

A recent report by consulting firm CSC, called Value-Based Purchasing: Non-Payment for Hospital-Acquired Conditions, estimates that for eight of the 10 current HACs, this translates to about $26.7 million in reduced Medicare claims payments for fiscal year 2009, or when you break it down across the 5,000 affected hospitals, $5,340 per facility.

That doesn't seem so bad. However, the report's authors also acknowledge that CMS has predicted a much bigger hit on hospitals of $9.3 billion total per year, due to 2.4 million fewer billable days for hospital-acquired conditions. That's close to $2 million a year per hospital. And it will get worse fast as other payers begin to adopt similar policies. I spoke to Walt Zywiak, principal researcher with CSC, and co-author of the report, who says hospitals seem to be prepared in terms of developing work flow protocols, for example. But leaders should also be taking a closer look at their staffing plan and shoring up documentation policies so they are better equipped to diagnose a patient's state of health on admission, and especially be able to identify pre-existing conditions.

Documentation is a big challenge, says Zywiak. "In order to be considered present on admission, these conditions have to be well documented in the patient record." Doing so requires good coordination between the nurses, who are doing the exams on admission for conditions such as pressure ulcers, and the physicians who are legally required to assign a diagnosis. Zywiak points out that while organizations are focused right now on big-ticket items like electronic health records and computerized physician order entry, physician documentation is often last on the list.

Without automated documentation, a nurse, coder, or a case manager has to make sure the physician is documenting a condition present on admission. "A lot of organizations are still using dictation and transcription that gets loaded online and is entered as the notes as opposed to being integrated with the nursing documentation," notes Zywiak. Therefore, helping physicians rethink their documentation practices has to happen now.

Meanwhile, the work duties of certain staff members will have to be rethought. For example, according to the report, the roles of coders, case managers, clinical documentation specialists, and quality nurses are starting to change to incorporate more point-of-care documentation. Zywiak says some hospitals are bringing in case managers to review the documentation at the start of the visit, which has not been done before.

"People have to deal with the fact that those people are here to stay in order to manage these things," he says.

With this latest rollout in value-based purchasing, the bottom-line impact is that organizations must become more adept at managing additional processes at the point of care and managing them well. Many preparations have been made for value-based purchasing, but with the immediacy of reduced payments for HACs pressing down on hospitals, now is the time for agility. The ability to move quickly now and make point of care adjustments in staffing and documentation could make a big difference a year from now.