Life Science Compliance Update

January 06, 2017

A Review of CMS' Hospital Compare Website

Hospitalcompare

As we reported, in July CMS released its first-ever hospital quality star ratings on its Hospital Compare website. The overall star ratings are based on 64 quality measures grouped under three process categories—effectiveness of care, efficient use of medical imaging, and timeliness of care—and four outcomes categories: mortality, patient experience, readmissions, and safety of care. Many of the hospitals widely considered to be the nation’s best were unable to achieve a five-star rating.

Unfairly punishes hospitals

According to a recent analysis, this star rating system rewards hospitals that serve mostly affluent patients and punishes those serving the poor. The research by Bloomberg BNA compares star ratings of hospitals, indicating a correlation between high star ratings and high household income, and a corresponding correlation between low ratings and low income.

Critics of the rating system point out that low-income patients are more likely to have difficulty accessing transportation for both routine primary care and post-discharge follow-up care. That can and does affect readmission rates, which are a key component of quality ratings. Critics of the system also point to anomalous results such as the consistently low ratings of academic medical centers, which are generally considered among the nation’s best hospitals and which are often located in low income urban areas. 

As published by Bloomberg BNA:

Bloom

 

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Outcome reporting issue

As reported in Health Affairs, CMS calculated and published star ratings for hospitals that had sufficient data to report on as few as three quality domains, including some hospitals that only had data from one clinical outcome domain. The fewer the clinical outcome domains a hospital reports, the less that hospital’s overall star rating is actually tied to performance on patient outcomes. Based on the July 2016 release of hospital compare data, 40 percent of the 102 hospitals that received a five-star rating did not have the minimum data necessary to report on either mortality or readmissions. Of those, 20 performed at only the national average on patient safety. Are all the shining stars here an accurate representation of quality?

This inconsistent value matrix leads to a wide performance divide among five-star hospitals. As shown by the Health Affairs research, among the 30 five-star hospitals that had sufficient data to report only the minimum number of quality domains required—three out of a total of seven (red bars)—14 had performed higher than the national average on only one quality domain, 15 performed above average on two domains, and a single hospital excelled at those three quality domains. Hospitals that reported all seven quality domains (yellow bars), however, needed at least three quality domains with above national average performance to receive a five-star rating:

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MedPAC: Change the program

In October, the Medicare Payment Advisory Commission (MedPAC) sent a letter to CMS raising concerns about the agency's methodology for calculating hospital quality star ratings. Specifically, MedPAC is concerned the ratings do not fully consider the intrinsic health risks that patients bring to hospitals, therefore creating an output score that is not “apples-to-apples”. For example, at one-star hospitals, an average of 78 percent of admissions were admitted through the emergency department. At five-star hospitals, only 36 of admissions were admitted through the emergency department. One-star hospitals treat a higher share of more severe cases from emergency rooms.

MedPAC is also concerned regarding overlapping quality payment and reporting programs.

The Commission asks CMS to align the star rating methodology as much as possible with existing CMS programs, like the Hospital Value-based Purchasing program, which scores hospitals on a set of quality and cost measures and redistributes payments from lower- to higher-performing hospitals. This may perhaps be the only way for CMS to save the program and correct the methodological challenges that currently call into question the utility of the hospital star ratings.

January 05, 2017

The Future of CMMIs

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The Affordable Care Act and the Medicare and CHIP Reauthorization Act (MACRA) provided the Centers for Medicare and Medicaid Services (CMS) with tremendous authority, by creating the Center for Medicare and Medicaid Innovation (CMMI). With the recent election leaving the executive and legislative branch in the hands of the Republicans, depending on who you ask, the future of that authority is in question.

CMMI was created under the ACA to test innovative payment and service delivery models to reduce program expenditures and improve health care. To meet that goal, the ACA allows CMMI to waive any Medicare provision of the Social Security Act, in addition to select Medicaid provisions, that may be necessary to carry out and evaluate demonstration policies. If the demonstrations prove effective, CMS may roll out the program nationally.

CMS has implemented numerous demonstration projects under CMMI’s authority over the past few years, including delivery reform demonstrations such as the Medicare Shared Savings Program and Pioneer ACO program, and the Financial Alignment Initiative (a program that integrates care for dual-eligible individuals in select states).

Demonstrations such as the Medicare Advantage Value-Based Insurance Design Model have focused on encouraging the use of high-value clinical services, while others, such as the Diabetes Prevention Program, focused more on preventive service models. In July 2016, CMS proposed expanding the Diabetes Prevention Program nationally.

Giving credence to the concerns of those who believe the future of CMMI authority hangs in the balance is the nomination of Representative Tom Price as Health and Human Services Secretary in the Trump Administration. In September 2016, Representative (and physician) Tom Price sent a letter to CMS condemning CMMI’s large mandatory demonstrations, stating that “CMMI has exceeded its authority, failed to engage stakeholders, and has upset the balance of power between the legislative and executive branches.”

Congressmen and women who signed off on the letter were concerned about the “potentially negative effects on patients, especially our vulnerable seniors” that the proposals made by CMMI may have. The letter insisted that “CMMI stop experimenting with Americans’ health, and cease all current and future planned mandatory initiatives within the CMMI.” Additionally, the letter requested CMS “commit to ensuring future CMMI models fully comply with current law.”

The letter, signed by roughly 150 members of Congress, specifically references the Cardiac Bundled Payment Model, the Comprehensive Care Joint Replacement Model, and the Part B Drug Payment model as problematic programs. The House Budget Committee also held a hearing criticizing the authority granted to CMS and CMMI, effectively usurping the role of Congress in creating public policy. They noted that by “focusing solely on cost-savings without adequate regard to the detrimental effects that the CJR Model, Part B Drug Payment Model, and Cardiac Models may potentially have, CMS at best has heeded only part of its statutory duty – “reduc[ing] program expenditures” – at the expense of its other duties – “preserving or enhancing the quality of care.”

Those who signed the letter also took issue with CMMI failing to meet its statutory requirements for implementing models, including starting with a limited, “Phase I” test, engaging stakeholders in model development, and describing the “defined population” and “deficits in care” the model seeks to address.

With new nominees and news coming out daily about various focuses of the Trump administration, it is possible that CMMI (and perhaps other programs) will soon be eliminated or modified.

January 03, 2017

Trump CMS Administrator Has Work Cut Out for Her

Verma

As we previously announced, President Elect Donald Trump plans to nominate Seema Verma, a private health policy consultant, to head the Centers for Medicare and Medicaid Services (CMS). While Ms. Verma likely has a few ideas of her own that should be instituted rather quickly, current CMS acting administrator Andy Slavitt believes that “[t]he person sitting in my chair next isn’t going to have a choice but to make this one of their top two or three priorities,” discussing drug pricing.

Slavitt continued, noting that CMS will need to create partnerships with members of the Medicare Part D community in order to be successful. He believes that the current dialogue on prescription drug pricing is set up between whether to have innovative, expensive drugs, or to have less expensive treatments. Slavitt believes boiling it down to simple terms creates a false choice and is not productive for anyone, least of all patients.

Slavitt compared the current pharmaceutical spending debate to conversations several years ago about rising hospital costs. He noted that we now know how to have treatments that are both innovative and less expensive, and that several years ago, frameworks were created to help make hospital care more affordable. He believes similar frameworks can be created for pharmaceuticals.

Slavitt also expressed his hopes that the new political climate in Washington, DC will not reverse the progress made over the last eight years, including the Affordable Care Act (ACA) and implementation of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which is set to change how clinicians get reimbursed under Medicare.

Slavitt cited the following statistics, in support of not only his reign over the past few years, but over the past eight years under President Obama:

  • Today, 30% of fee-for-service Medicare payments flow through alternative payment models, up from essentially none in 2010. And, millions more are covered through innovative Medicare Advantage programs.
  • Quality and safety have improved with the rate of hospital-acquired conditions declining by 17%, which has prevented an estimated 87,000 deaths over 4 years. The rate at which Medicare patients are readmitted to the hospital within 30 days after discharge has decreased sharply, resulting in 565,000 fewer total readmissions.
  • Medicare provides more access with new prescription benefits and, thanks to the Affordable Care Act (ACA), we’ve closed the Medicare donut hole and with that, 11 million beneficiaries have saved an average of more than $2,000.
  • The CMS Innovation Center, which the ACA created, takes best practices from the clinical field and has developed over 30 alternative payment models and initiatives, serving millions of Medicare beneficiaries. The CBO expects the Innovation Center to reduce federal spending by about $34 billion over the next 10 years as we find new and better ways to care of people.
  • And, with all of this, we have been spending tax payer resources more wisely with extended record low medical inflation. The ACA extended the life of the Medicare trust fund and has helped deliver $473 billion in savings.

MACRA is not likely to go anywhere with the new administration, but the ACA is under extreme attack. Slavitt noted that he hopes Ms. Verma “build[s] from a foundation of progress, not head backwards. There can be no delivery system reform without building on the foundation of reaching universal coverage.”

Slavitt believes that the CMS Innovation Center, created by the ACA to take best practices and develop alternative payment models and initiatives, is crucial to the success of MACRA, stating, “I’ll say this bluntly: MACRA can’t work as well without a CMS Innovation Center that can move quickly to develop and expand new approaches to paying for care.”

Slavitt ended his talk reminding attendees that “people are the heart of every policy made,” and that “[w]e are on a journey as a nation towards better health for all. Patients. Care givers. Consumers. You know them better than anyone because you care for them. View MACRA as a step in the journey to develop care together.”

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