1. Federal Quality Measurement Update Alaska State Hospital and Nursing Home Association February 4, 2015

2. Presentation Overview Federal quality measurement context FY 2015 Final Rules Inpatient PPS, IPFs, LTCHs, IRFs CY 2015 Final Rules OPPS, Physician Fee Schedule NQF Updates

3. Major Issues In Public Measurement Measures, measures, measures… –But how do we get focus on what’s important to improving care? More linkages to payment –Will incentives drive change? –Are there unintended consequences? Continued push for transparency –But what (and how much) information is right for public accountability?

4. National Quality and Safety Efforts Institute for Healthcare Improvement Health Plans Institute for Safe Medication Practices Joint Commission AHRQ CMS IQR Professional Societies Partnership for Patients, HENs Leapfrog Group National Patient Safety Foundation PCPI National Committee for Quality Assurance Measurement Burden from Public and Private Sector Efforts CDC’s NHSN CMS OQR CMS Meaningful Use CMS HAC Penalty CMS VBP CMS Readmission Penalty PSO

5. Pay-for-Reporting For most hospitals: IQR OQR For some hospitals: IPF Quality Reporting IRF Quality Reporting LTCH Reporting HH Quality Reporting PQRS Incentive-Based Payment Meaningful Use (through FY 2014) Hospital Value-Based Purchasing (VBP)– upside and downside risk Physician Value Based Payment Modifier Shared Savings Program Payment Penalty Readmissions Hospital Acquired Conditions (HACs) Meaningful Use in FY 2015 and beyond SNF VBP Pay-for-performance Federal Quality Measurement Process for Hospitals Measures proposed and finalized in rulemaking process Measure Applications Partnership (MAP) Measure development and NQF endorsement

6. Small Hospitals and CAHs Generally NOT required to participate in CMS quality reporting programs, but… May voluntarily report measures into the IQR and OQR, or other pilot initiatives Often submit measures to fulfill accreditation requirements (e.g., The Joint Commission) May be required to submit measures under certain circumstances: –IPF quality measures for CAHs with separately licensed, distinct part inpatient psych units paid under Medicare’s IPF payment system –Physician Quality Reporting System (PQRS) measures for CAHs and hospitals who either directly employ or have been assigned billing rights for physicians under contract For CAHs, applies to those using Method II billing

7. AHA Policy Development and Advocacy Efforts Overarching Goals: –Fewer measures with less burden –Measures focused on national priorities for improvement across healthcare continuum –Minimize unintended consequences Policy and Advocacy Levers –AHA governance process –Engagement with NQF and MAP –Rulemaking process –Legislation (e.g., socioeconomic adjustment for readmissions)

8. What might a focused set of hospital measures look like? In 2014, AHA worked with hospital leaders to identify 11 prioritized areas of focus for national measurement efforts: Measure IdeaNational Quality Strategy Category Harm RatesSafety Risk-adjusted mortalityClinical Effectiveness Effective Patient TransitionsCare Coordination Infection RatesSafety End-of-life PreferencesPatient and Family Engagement Cost per case or episodeEfficiency Readmissions ratesCare Coordination Adherence to guidelines for commonly overused procedures Efficiency Medication errorsSafety Diabetes controlPopulation / Public Health ObesityPopulation / Public Health

9. FY 2015 Final Rules: AHA Resources

10. Hospital Acquired Conditions Beginning October 1: 1.0% reduction to total hospital Medicare payments for hospitals in top quartile of HAC rates CMS calculates total HAC Score: Claims-based Patient Safety Indicator (PSI) = 35% Healthcare Associated Infections (HAIs) = 65% Concerns remain about policy design and measures

11. HAC Impact 721 hospitals receiving penalties* −21% of eligible hospitals −Reduces hospital payments by $373 million Most impacted? −Penalizes 56% of major teaching hospitals −Penalizes 42% of urban hospitals with 500+ beds −Confirms the concern that hospitals caring for complex patients most likely to receive penalties 9 *Estimated in FY 2015 IPPS Final Rule

12. FY 2016 HAC Program Changes FY 2016 “Total HAC Score” weights HAIs more heavily: 25% x (Domain 1 Score) + 75% x (Domain 2 Score) Likely helpful, but HAC program still: −Uses unreliable PSIs −Inappropriately overlaps with VBP −Does not recognize improvement −Penalizes hospitals caring for complex patients 9

13. Readmission Penalties Beginning October 1 Maximum payment reduction of 3.0% for excess readmissions 2,610 hospitals penalized $428 million (vs. $227 million) Roughly 76 percent of hospitals will receive a penalty For 2015, CMS adds COPD and total hip/knee CABG (not NQF endorsed!) added in FY 2017 1

14. Key HRRP problems remain No exclusion for readmissions unrelated to the reason for initial admission (despite ACA requirement) No adjustments for socioeconomic factors beyond hospital control –Seeking legislative relief –NQF Trial Period

15. Value-Based Purchasing In FY 2015, funded by reducing base operating payments by 1.5 percent −Budget neutral (all funds paid to hospitals) −Available pool of FY 2015 VBP Funds: $1.4 billion FY 2017 New Measures ­C Difficile ­MRSA ­Early Elective Delivery FY 2019 New Measure ­Total Hip and Total Knee Arthroplasty Complications

16. VBP Domain Weight Changes CMS placing significantly less weight on process measures Measure Domain FY 2017 Weight Adopted in FY 2014 IPPS Final Rule New FY 2017 Weight finalized in FY 2015 IPPS Final Rule Safety15%20% Clinical Care:  Clinical Care – Outcomes  Clinical Care – Process 35%  25%  10% 30%  25%  5% Efficiency and Cost Reduction25% Patient and Caregiver Centered Experience of Care / Care Coordination 25%

17. Inpatient Quality Reporting CMS aggressively removes “topped out” chart-abstracted measures Expanded voluntary electronic clinical quality measure (eCQM) reporting option Credit for both IQR and EHR Incentive Program Retains the eCQM version of 10 removed measures Adds 6 measures that are only reportable as eMeasures AHA concerns Lack of NQF endorsement (several measures) Accuracy and feasibility of eMeasures

18. IQR Comings and Goings Permanently Removed –Cardiac surgery data participation –3 SCIP measures –4 previously suspended measures Newly added for FY 2017 (non eCQMs) –CABG readmissions –CABG mortality –Pneumonia Payments per 30-day episode of care –Heart Failure Payments per 30-day episode of care Newly added and subsequently suspended –Severe Sepsis and Septic Shock Bundle (NQF #500)

19. Electronic Clinical Quality Measures (eCQMs) 10 measures removed from IQR as chart- abstracted measures but retained as voluntarily-reported eCQMs Six “new” measures for eCQM voluntary reporting only: –Hearing Screening –Exclusive Breast Milk Feeding –Home Management Plan of Care –Healthy Term Newborn –Aspirin on Discharge –Statin on Discharge Concerns remain about accuracy and feasibility of eMeasures

20. Inpatient Psychiatric Facility Quality Reporting Measures MeasureFY 2014 FY 2015 FY 2016 FY 2017 HBIPS 2, 3, 4, 5, 6, 7XXXX SUB 1 – Alcohol Use ScreeningXX FUH – Follow-up after Mental Health Hospitalization (calculated by CMS) XX IPF Patient experience survey useXX IPF Electronic Health Record useXX Patient flu vaccination (IMM-2)X Health care personnel flu vaccination X TOB-1 – Tobacco use screeningX TOB-2/TOB-2a – Tobacco use treatment offered or provided X Red = Finalized in FY 2015 IPF PPS final rule

21. Post-Acute Quality Reporting Long-Term Care Hospitals –For FY 2018, CMS finalizes Ventilator-associated event (VAE) measure 2 functional status measures Data completeness standards –But did not finalize validation process Inpatient Rehabilitation Facilities –For FY 2017, CMS adds MRSA and C Difficile measures –Validation process and data completeness standards

22. Post-Acute Reporting Changes: IMPACT Act Signed into law Oct. 6 Framed as creating “building blocks” of post-acute care reform through collection and reporting of “standardized and “interoperable”: –Patient assessment data –Quality measures Expands data collection and reporting requirements for LTCHs, IRFs, SNFs and HHAs –Payment penalties for non- reporting Significant regulatory activity in 2015

23. Physician Quality Measurement CY 2015 PFS Final Rule Physician Quality Reporting System (PQRS) –CG CAHPS reporting required for all groups of 100 or more eligible professionals (EPs) For CY 2015 reporting (CY 2017 payment) Value-Based Payment Modifier (VM) –Applies to ALL physicians and group practices starting Jan. 1, 2017 –For CY 2017, maximum adjustment amount increases from 2 to 4 percent Individuals and groups of 2-9 “held harmless” –CMS will apply VM to participants in MSSP and CMMI initiatives (e.g., Pioneer ACO Program) –VM to apply to non-physician EPs in CY 2018

24. Outpatient and ASC Quality Reporting CY 2015 OPPS Final Rule Finalizes facility 7-day hospital visit rate after outpatient colonoscopy measure –Will be implemented for CY 2018 OQR and ASCQR (instead of the proposed CY 2017) –Dry run during 2015 Quantitative criteria for “topped out” performance, aligned with IQR and VBP Removal of two “topped out” measures on abx prophlaxis –But retention of OP-4 (aspirin on arrival) Voluntary reporting of OP-31/ASC-11 (improvement in visual function after cataract surgery)

25. NQF Update Annual MAP process –Measures list on Dec. 1 –Recommendations by Feb. 1 –Updated MAP process But AHA still urging greater focus and alignment Sociodemographic adjustment “trial period” beginning Jan. 1, 2015 Measure Endorsement Projects –Admissions and Readmissions –Patient and Family-Centered Care –Rural Quality Measurement –Other standing committees ongoing

26. Federal Regulatory Update Akin Demehin Senior Associate Director, Policy ademehin@aha.org 202-626-2365