Raising the Stakes for Pay-for-Performance

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After many assurances over the past year that the Office of the National Coordinator for Health IT and the Centers for Medicare & Medicaid Services (CMS) want to relieve some of the regulatory burden providers face, the Department of Health & Human Services (HHS) announced an aggressive plan to move to pay-for-performance rather than volume.

“From the standpoint of the dynamics between Congress and the administration, this move is bold,” says Jeffery Smith, MPP, vice president of public policy for the College of Healthcare Information Management (CHIME). “It’s something that merits serious attention.” The organization supports the direction HHS is signaling with this announcement, he says, but “even once CMS begins to identify regulatory mechanisms to make some of these payment changes, there will be continued debate over which path is going to get us toward these goals.”

This also relates to the sustainable growth rate fix (SGR) which comes up every year. “Clearly, HHS is not sitting on its hands while Congress considers another patch. The conversation between the SGR and what HHS is doing are very intertwined.”

When considering how many providers are currently engaged in some kind of pay-for-performance program compared with what HHS wants to achieve in the next three years, “it really does seem like a stretch,” says Smith. Once HHS reveals more details, “we will try to work with the government to figure out what a sensible pace looks like. It’s too early to say outright that these goals are unattainable or too easy.”

Howard Landa, MD, CMIO of Alameda County Medical Center in Alameda, Calif., agrees. The devil’s in the details, he says. Conceptually, the plan is “completely in line with what Medicare has always said about moving from volume to value. This could be a real game-changer.” But, providers all across the care continuum must be supported to make it work. “Optimizing one little piece gets you some benefit but if doesn’t go across the whole continuum, you get improvement in one area at the cost of another area.

“Initially I found this announcement incredibly concerning. It sounded like the vast majority of payments would be entirely quality based by 2018. In reading it more carefully, the implication is that there will be a quality portion of the majority of these payments. Now it is all a question of how they implement it,” he says. “If 90 percent of payments will have a quality piece by 2018 and we use the current model of a fee-for-service payment penalty or incentive tied to data, will that be 1 percent or 50 percent of the payment? That’s the real key.” If, as suggested, the movement will be to accountable care and bundled payments, how fast can they pull that off? In my opinion that is where we will see real value.”

Given the reaction to the Meaningful Use penalty that went into effect on Jan. 1, expect a fair amount of angst. “If a significant amount of your payment is going to be based on quality, we need a system to tell us what our quality is. There are a lot of EMRs out there but not a lot of doctors are getting Meaningful Use on the provider side.”

Landa predicts this plan could push people to look at ICD-10 more positively because it provides more granular data. “Providers have been pushing for ages on the informatics side for quality, efficiency and usability, and this brings quality up to the top. That’s great but we still need to see enough patients to make the system work. If we’re now pushing for more and more data needed to support the quality side, it’s only going to make the systems more and more difficult to use.” Volume and quality have been fighting each other for some time but this could “magnify it and make it worse.”

While the government has talked about aligning programs to reduce provider burden, Landa says that doesn’t meet their goal of reducing cost. Healthcare organizations have been tasked with doing far more than the government has despite their resources. “They tell us to figure out Meaningful Use and value-based purchasing but they can’t figure out to get the insurance exchange website working. Talk about the pot calling the kettle black.”

Timing could be a driver of this effort, says Smith. Currently, Congress is actively discussing how to repeal and replace the SGR but he says he’d put his money on yet another patch. So, to start working toward the end goal of more payment contingent on quality and outcomes, “HHS is saying ‘we’re done waiting on Congress to act on ideas that have been kicking around for quite some time.’”

Landa agrees. “Depending on how this is implemented, it give CMS extensive control over the total payout of Medicare dollars. The impact could dwarf any effect existing penalties the SGR legislation could provide.”

However, now that technology adoption is so high, it has raised a red flag, Smith says. “The state of quality measurement is pretty poor. It’s pretty complicated and pretty messy. And when you talk about quality measurement through EHRs or electronic quality measurement, the situation gets much worse.”

While progress has been made over the past two years, it has “been painstaking,” Smith adds. “If the ultimate goal is to reimburse off of performance and rely heavily on quality measures, we’ve got a tough road to hoe.”


Rethinking Stage 2

After multiple requests from a range of established organizations and newly created coalitions to relieve the burden of Meaningful Use (MU), the Centers for Medicare & Medicaid Services (CMS) has announced its intent to engage in rulemaking to update the Medicare and Medicaid EHR Incentive Programs beginning in 2015. These intended changes would help to reduce the reporting burden on providers, while supporting the long-term goals of the program, according to a CMS blog post authored by Patrick Conway, MD, CMS chief medical officer and deputy administrator for innovation and quality.

Conway cited the rapid increase in EHR adoption over the past few years and said the new rule “would be intended to be responsive to provider concerns about software implementation, information exchange readiness and other related concerns in 2015. It would also be intended to propose changes reflective of developments in the industry and progress toward program goals achieved since the program began in 2011.”

CMS is considering proposals to:

  • Realign hospital EHR reporting periods to the calendar year to allow eligible hospitals more time to incorporate 2014 Edition software into their workflows and to better align with other CMS quality programs.
  • Modify other aspects of the program to match long-term goals, reduce complexity and lessen providers’ reporting burdens.
  • Shorten the EHR reporting period in 2015 to 90 days to accommodate these changes.

Professional organizations are offering their enthusiasm. The American Medical Association “welcomes” the announcement, says AMA President-Elect Steven J. Stack, MD.

“We are eager to see the proposed rule as we have been working with CMS and the Office of the National Coordinator for Health IT (ONC) offering solutions to improve the incentive program for quite some time.” Stack cited the AMA’s recommendations for revamping the EHR certification process, blueprint for fixing the Meaningful Use program and framework for improving EHR usability.

“We hope the new rule will be issued expediently to provide the flexibility needed to allow more physicians to successfully participate in the Meaningful Use program and better align Meaningful Use with other quality reporting programs such as the Physician Quality Reporting System and the Value-base Modifier. Additionally, we hope ONC will address problems with interoperability and support technologies that provide the ability for information to be exchanged, incorporated and presented to a physician in a contextual and meaningful manner.

CMS is wise to take action to address concerns, says Peter Basch, MD, medical director for ambulatory EHR and health IT policy at MedStar Health, based in Columbia, Md. “The attestation history in 2014 supports the contention that there are still plenty of providers who either did not or could not get on 2014 certified software by the end 2014, or just squeaked by with a rushed implementation.” Struggling providers and late adopters aren’t necessarily done with MU but CMS letting them face a negative payment adjustment “would be a signal from CMS that Meaningful Use is done with them.”

Whether this is enough relief to keep things on track with the MU timeline is hard to say, according to Basch. “Clearly, it buys breathing room and allows more docs to keep participating while other events take shape.”

The intention of CMS to accelerate its transition to pay-for-value “is the game changer that should have CMS reconsidering a course correction, or perhaps a premature end to the MU program.” A different payment structure means providers need to be more concerned about having an EHR interconnected with information sources and engagement tools and quality measures that help them do better.

“While docs need time in 2015 to stay inside the existing MU rails, CMS and ONC need this time to determine—hopefully with input from other stakeholders--how the MU trajectory needs to change such that doctors and hospitals are ready for pay-for-value.”

Meaningful Use Stage 2 “contains numerous noble goals that require an ecosystem/marketplace to develop first,” says John Halamka, MD, CIO of Beth Israel Deaconess Medical Center in Boston. “The HIE marketplace is just developing and the usable apps for patients view/download/transmit are still six months away. The new timeline gives us the flexibility we need to do these projects right, leveraging the market foundation that is developing.”

CMS could either keep MU the way it was and watch the numbers of eligible providers and hospitals missing out go up significantly and face the wrath of bad press or let the program die and reboot it as many have suggested, says Colin Banas, MD, CMIO of VCU Health System, based in Richmond, Va.

Ninety-day flexibility is extremely helpful, he says, even for his EMR-mature organization. “This would buy much needed breathing room to continue to work on what has proven to be extremely onerous minutia that continues to prevent us from meeting Meaningful Use for our eligible providers and our eligible hospital.”

Banas too predicts changes in MU. “There’s a general consensus from those of us in the trenches that Stage 2 ended up feeling ‘over-engineered’ and often non-value-added. For the amount of effort we are putting in to date the juice has not been worth the squeeze. I am hopeful that Stage 3 rules will be more inclusive of ideology we’ve seen to date such as SAFER guidelines and interoperability.”