Posts Tagged payment for performance

Unlike the Senate Finance Committee, whose ideas on Value-Based Purchasing (VBP) are very clear and consistently focused on payment incentives to providers, the House Tri-Committee takes a more roundabout way to integrating value concepts into healthcare reform. The House Tri-Committee draft broadly implements VBP concepts in three initiatives: health insurance, quality-based reductions in payment, and additional provider quality reporting initiatives.

VBP and Health Insurance Option. The House plan authorizes the Secretary of HHS to “utilize innovative payment mechanisms and policies to determine payments for items and services under the public health insurance option. The payment mechanisms and policies under this section may include patient-centered medical home and other care management payments, accountable care organizations, value-based purchasing, bundling of services, differential payment rates, performance or utilization based payments, partial capitation, and direct contracting with providers.”

In addition, the Secretary is required to “design and implement the payment mechanisms and policies under this section in a manner that…promotes care that is integrated, patient centered, quality, and efficient.” In the Data Advantage Hospital Value Index™, we evaluate care on the axes of quality, affordability, efficiency, and patient satisfaction.

The House plan also introduces the concept of value and quality based payments for Medicare Advantage (MA) plans. By ranking MA plans based on the quality and value that the MA plans deliver on behalf of their members, MA plans will effectively be forced to be more selective in establishing provider networks, which will in turn reinforce other value-based purchasing reforms.

Finally, the House plan explicitly encourages the public health insurance option to use  “high value services” through the implementation of “cost sharing and payment rates to encourage the use of services that promote health and value.”

Quality-Based Reductions in Payment. The House plan contains provisions to adjust payments to hospitals for excess readmissions beginning October 1, 2010. In addition, the House plan contemplates comprehensive payment reform, i.e. bundling, for post-acute care service providers (SNF, LTAC, IRF, hospital-based outpatient rehabilitation facilities and home health)

Additional Provider Quality Initiatives. The House plan contains numerous initiatives to increase quality measurement and reporting, including:

• Integration of physician quality reporting and EHR reporting
• New requirements for ASCs to submit cost reports and data on quality and health care associated infections
• Establishment of National Priorities for Performance Improvement – goal is to develop national consensus standard for measuring the performance and improvement of population health or of institutional providers of services, physicians and other practitioners

Under the National Priorities for Performance Improvement, the AHRQ is instructed to enter into agreements with “qualified entities” to develop quality measures for delivery of health care services. Among other things, the quality measures must be designed to assess patient experience and patient engagement, the safety, effectiveness and timeliness of care, and efficiency and resource use. In other words, what the Hospital Value Index™ measures.

Another proposal is to establish the Center for Quality Improvement headed by the Director of AHRQ. Until the Center is fully operational, the Director of the AHRQ is instructed to focus in on healthcare-associated infections, including nursing homes and outpatient settings; hospital and outpatient perioperative safety; improved quality in hospital ED, especially in identification of sepsis.

Finally, the House plan proposes the establishment of an Assistant Secretary for Health Information to collect, report and publish statistics on key health indicators.

In summary, the House Tri-Committee plan proposes to introduce VBP concepts in both health insurance coverage and healthcare services. While not as obvious as the Senate Finance Committee initiatives, the House initiatives may effectively be more far-reaching.