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Medicare's Quality Measure Development Should Be on Your Revenue Cycle Radar

Analysis  |  By Alexandra Wilson Pecci  
   October 23, 2018

A CMS grant will help seven healthcare organizations develop quality measures for the Medicare Quality Payment Program.

The Centers for Medicare & Medicaid Services recently awarded seven health organizations grants to develop quality measures in different specialty areas for use in the Medicare Quality Payment Program (QPP), which changes the way Medicare pays providers under the Physician Fee Schedule.

The QPP rewards "high value, high quality Medicare clinicians with payment increases—while at the same time reducing payments to those clinicians who aren’t meeting performance standards," according to the CMS website.

Grantees include organizations such as American Society for Clinical Pathology, University of Southern California, and American Academy of Hospice and Palliative Medicine, which will develop measures in pathology, mental health and substance use, and palliative care, respectively.

Existing QPP quality measures were set using public-private efforts, but some gaps remain. The new CMS grantees will aim to fill those gaps by developing, improving, expanding, or updating quality measures for use in the QPP, according to a CMS spokesperson via email.

The measures developed through this initiative will be for the QPP’s two participation pathways for doctors and other clinicians, including the Merit-based Incentive Payment System and Advanced Alternative Payment Models. 

Each of the grantees' proposed measures provides insight into the kinds of quality outcomes that CMS will prioritize for value-based care, which has become an increasing priority for both CMS and private payers.

Recent data shows that adoption of alternative-payment models has increased steadily over two years, and CMS said earlier this year that the QPP exceeded its year-one participation goal.

High volume, high costs

Brigham and Women's Hospital in Boston is among the seven CMS grantees, and will develop orthopedic surgery quality measures, most of which are related to total knee and hip replacement, for the QPP.

With more than 1 million procedures performed annually, hip and knee replacements have long been an area where hospitals have sought to improve their financial performance.

"Organizations that are thinking about their revenue cycle tend to be especially focused on how well they can do with hips and knees," says David Bates, MD, chief of general internal medicine at Brigham and Women's Hospital and director for the Center for Patient Safety Research and Practice.

That's why orthopedic surgery is an area that's ripe for developing new and better ways for hospitals to get reimbursed.

Bates says hip and knee replacements in particular can be done much more efficiently and with higher quality if organizations work on improving care for patients.

Orthopedics is a good fit for the QPP because "these procedures are performed frequently; they end up being relatively expensive," Bates says. "Hip and knee replacements are two of the ones that CMS picked for prospective reimbursement early on."

There's already a lot of room for improvement. When it comes to the costs of hip and knee replacement for hospitals, there's a considerable amount of variation from facility to facility.

For instance, a May 2018 Premier study showed that providers paid significantly different prices for a range of hip and knee devices.

There was a $1,500 difference between the top-performing and bottom- performing hospitals for knee implants, and a $1,700 difference between the top-performing and bottom-performing hospitals for hip implants.

Premier identified other wide cost variations for providers, too, regarding anesthesia, labor spending in the operating room, and bone cement.

Volume also plays a role in costs. A 2016 Hospital for Special Surgery study found that if all patients scheduled for knee replacement were directed to high-volume hospitals for the surgery, it could save the U.S. healthcare system between $2.5 and $4 billion annually by the year 2030.

"I think those two procedures in particular are ones that every hospital should be working on," Bates says.

Outcome and payment priorities

Brigham and Women's proposed quality measures attempt to get a better understanding of how well patients are doing after orthopedic surgery.

"For a long time, it's been clear that many of the outcomes that we measure are perhaps not the most relevant for patients," Bates says.

For instance, typically used measures such as death or infection are usually unlikely after orthopedic surgery. Instead, what's important are patient-reported outcome measures, like the patient's physical and mental function.

That's why one of Brigham and Women's proposed quality measures will measure the average pre- and postoperative change in patients' functional status a year after total hip replacement, translating patient-reported information from a 10-item survey tool into a summary score for physicians to assess.

"[Hospitals] have not been paid based on how they're doing with respect to those metrics," Bates says.

The CMS spokesperson says that once the measures are developed, they'll go through a pre-rule and rule-making processes before being implemented in the QPP.

"Patients who do better on these metrics will have better outcomes, and payment is fairer if you get paid more for having patients who do better," Bates says.

Inside the development process

Bates says Brigham and Women's is in the relatively early stages of their work, but developing the measures will involve lots of stakeholders, including patients.

"The hard issue is just getting the data from patients, and then in addition, taking it and summarizing it and giving it to providers in a way that works for them in respect to their workflow," Bates says.

Bates says he believes that "the basic coding would likely remain pretty much the same," but on the quality front, providers would report things like "what someone's promised scores were after they had procedures or what their complication rate is."

He continues, "A lot of the first year is really going through the metrics, presenting them to patients, making sure that this meets with their needs, and then understanding what our current workflow is and what needs to change to actually implement these."

Although financial analysis will come much later in the process, Bates says looping in the revenue cycle team might include asking for help determining "what things they think would make sense in terms of a payment adjustment."

Alexandra Wilson Pecci is an editor for HealthLeaders.


New proposed quality measures developed by seven CMS grantees will potentially change the way providers are paid through the Medicare Quality Payment Program.

Each of the healthcare organizations' proposed measures provides insight into the kinds of quality outcomes that CMS will prioritize for value-based care.

CMS moves toward quality, and private payers follow that lead.

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