2010-2011 SC HFMA - Annual Institute Embassy Suites Hotel Columbia, SC July 30, 2010 - PowerPoint PPT Presentation


Title: 2010-2011 SC HFMA - Annual Institute Embassy Suites Hotel Columbia, SC July 30, 2010


1
2010-2011 SC HFMA - Annual InstituteEmbassy
Suites HotelColumbia, SCJuly 30, 2010
Quality and Finance The Stars Align
Jason Sanders, Budget and Reimbursement, Sisters
of Charity Providence Karen Reeves, VP Quality
Compliance and Risk Management, SCHA Barney
Osborne, VP Finance, SCHA
2
Institute of Medicine and AHRQ
RHQDAPU and HCAHPS
Pay for Reporting
Never Events
Hospital Acquired Conditions
Quality and Finance The Stars Align
MS DRGs
ARRA HITECH Meaningful Use
Value Based Purchasing
Bundling
30 Day Readmissions
Medicaid HACs
3
Quality or Finance
4
Quality or Finance
  • The DRG and Case Management
  • Case management clinical
  • Medical Records clinical
  • Forced hospitals manage physicians
  • Counterbalance
  • Hospitals risk physician discharge
  • Value Based Purchasing
  • Hospitals manage physicians and hospital
  • Shared risk

5
Before the math, a brief summary of VBP
just in case you havent heard
6
A Brief History of Pay for Performance (P4P)
  • 1980s and 1990s
  • Increase in HMOs and managed care
  • Capitated payment models
  • Physician incentives based on financial
    performance
  • 2000-Present
  • Institute of Medicine reports
  • To Err is Human and Crossing the Quality Chasm
  • Rewarding provider Performance
  • Physician and hospital incentives based on
    clinical performance
  • Legislated changes
  • Pay for Reporting (2 penalty)
  • Senate and CMS models for value-based purchasing

7
What are the simple rules for the 21st Century
Healthcare System
What Patients Should Expect (IOM Crossing the Quality Chasm, p. 67) What Patients Sometimes Receive
Care is beyond the patient visits, wherever you need it Care is fragmented
Individualization Care can be confusing and repetitive
Transparency Communication and information sometimes minimal
Information is a record and yours to know Integrated Electronic Health Records rarely exist minimal and disjointed information given to patients
Decision-making is based on science Is care based on evidence-based practices?
Do no harm Is patient safety at the core of quality?
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Never Events

1. Wrong Surgical or Other Invasive Procedure 2.
Surgical or Other Invasive Procedure
Performed on the Wrong Body Part 3. Surgical or
Other Invasive Procedure Performed on the Wrong
Patient Medicare will not cover
hospitalizations and other services related to
these non-covered procedures. All services
provided in OR when an error occurs are
considered related and therefore not covered. All
providers in OR who could bill individually are
not eligible for payment. All related services
provided during same hospitalization are not
covered. http//www.cms.gov/transmittals/downloa
ds/R101NCD.pdf
9
Hospital-Acquired Conditions


These are conditions that are high cost/volume,
resulting in higher paying DRG when present as a
secondary diagnosis, and which could reasonably
have been prevented 1. Foreign Object Retained
After Surgery 2. Air Embolism 3. Blood
Incompatibility 4. Pressure Ulcers (Stage III and
IV) 5. Falls and Trauma (Fractures,
Dislocations, Intracranial Injuries, Crushing
Injuries, Burns, Electric Shock)
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Hospital-Acquired Conditions
6. Manifestations of Poor Glycemic Control
(Diabetic Ketoacidosis, Nonketotic Hyperosmolar
Coma, Hypoglycemic Coma, Secondary Diabetes with
Ketoacidosis, Secondary Diabetes with
Hyperosmolarity) 7. Catheter-Associated Urinary
Tract Infection (UTI) 8. Vascular
Catheter-Associated Infection 9. Surgical Site
Infection Following Coronary Artery Bypass
Graft (CABG), Bariatric Surgery, Certain
Orthopedic Procedures 10. Deep Vein Thrombosis
(DVT)/Pulmonary Embolism (PE) Following
total hip/knee replacement       
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POA Indicator Descriptor
  • Y Indicates that the condition was present on
    admission.
  • W Affirms that the provider has determined based
    on data and clinical judgment that it is not
    possible to document when the onset of the
    condition occurred.
  • N Indicates that the condition was not present on
    admission.
  • U Indicates that the documentation is
    insufficient to determine if the condition was
    present at the time of admission.
  • 1 Signifies exemption from POA reporting. CMS
    established this code as a workaround to blank
    reporting on the electronic 4010A1. A list of
    exempt ICD-9-CM diagnosis codes is available in
    the ICD-9-CM Official

Source Federal Register
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CMS Example
MS-DRG Assignment (Examples for a single secondary diagnosis) POA Status of Secondary Diagnosis Average Payment
Principal Diagnosis Stroke Without CC/MCC -- 5,347.98
Principal Diagnosis Stroke With secondary CC Injury due to a fall (code 836.4) Y Y 6,177.43
Principal Diagnosis Stroke With secondary CC - Injury due to a fall (code 836.4) Y N 5,347.98
Baseline
(829.45)
Source CMS Progress Toward Implementing
Value-Based Purchasing Lisa Graberth
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Payment Implications
  • More impact on accounts where the HAC was a
    CC/MCCs
  • More impact on accounts with few CC/MCCs
  • Heavier impact on small/rural facilities
  • Less impact on accounts with many other CC/MCCs
  • Impact on large facilities will increase as more
    CC/MCCs become HACs

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SC Example With Few MCC/CCs
Primary Procedure Incisional hernia repair Primary Procedure Incisional hernia repair Primary Procedure Incisional hernia repair Primary Procedure Incisional hernia repair Primary Procedure Incisional hernia repair
Diagnoses Diagnoses POA POA
Ventral hernia w/ obstruction Ventral hernia w/ obstruction Ventral hernia w/ obstruction Y Y
Infection and inflammatory rcn due to indwelling catheter (CC) Infection and inflammatory rcn due to indwelling catheter (CC) Infection and inflammatory rcn due to indwelling catheter (CC) Infection and inflammatory rcn due to indwelling catheter (CC) Infection and inflammatory rcn due to indwelling catheter (CC) Y   N
UTI (CC)         Y   N
Diabetes mellitus w/o complication Diabetes mellitus w/o complication Diabetes mellitus w/o complication Diabetes mellitus w/o complication Y Y
Essential hypertension Essential hypertension Essential hypertension Y Y
Unspecified hypothyroidism Unspecified hypothyroidism Unspecified hypothyroidism Y Y
Other unspecified hyperlipidemia Other unspecified hyperlipidemia Other unspecified hyperlipidemia Other unspecified hyperlipidemia Y Y
Coronary atherosclerosis of unspecified type vessel Coronary atherosclerosis of unspecified type vessel Coronary atherosclerosis of unspecified type vessel Coronary atherosclerosis of unspecified type vessel Coronary atherosclerosis of unspecified type vessel Y Y
Venous insufficiency, unspecified Venous insufficiency, unspecified Venous insufficiency, unspecified Venous insufficiency, unspecified Y Y
Spondylosis w/o myelopathy Spondylosis w/o myelopathy Spondylosis w/o myelopathy Y Y
Overweight Overweight Y Y
Other chronic non alcoholic liver disease Other chronic non alcoholic liver disease Other chronic non alcoholic liver disease Other chronic non alcoholic liver disease Other chronic non alcoholic liver disease Y Y
Constipation Constipation Y Y
Esophageal reflux Esophageal reflux Y Y
Gout, unspecified Gout, unspecified Y Y

MSDRG weight MSDRG weight 1.4092 1.0147
Base rate 4,990.60 4,990.60
7,032.75 5,063.96

Impact (1,968.79)

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Source SC ORS
15
SC Example With Many MCC/CCs
Primary Procedure Other Enterostomy
Diagnoses POA POA
Pneumonitis due to inhalation of food/vomitus Y   Y
Toxic encephalopathy (CC) Y   Y
Decubitis ulcer, lower back (CC) (MCC) Y   N HAC
Grand mal status (CC) Y   Y
Other protein-calorie malnutrition (CC) Y   Y
UTI (CC) Y   Y
Deep vein thrombosis (CC) Y   N
Mechanical complication of vascular device (CC) Y   N
Dsphagia Y   Y
Hypotension, unspecified (MCC) Y   Y
Dehydration (CC) Y   N
Mental d/o due to conditions classified elsewhere Y   Y
Parkinson's Y   Y
Electrolyte and fluid d/0 (CC) Y   Y
S. aureus Y   Y HAC

MSDRG weight 1.8444 1.8444
Base rate 4,990.60 4,990.60
9,204.66 9,204.66
Y
Y
Y
No Impact
Source SC ORS
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Hypothetical With Many HACs
Primary Procedure Other Enterostomy
Diagnoses POA POA
Pneumonitis due to inhalation of food/vomitus Y   Y
Toxic encephalopathy (CC) Y   Y
Decubitis ulcer, lower back (CC) (MCC) Y   N HAC
Grand mal status (CC) Y   Y
Other protein-calorie malnutrition (CC) Y   Y
UTI (CC) Y   Y
Deep vein thrombosis (CC) Y   N HAC
Mechanical complication of vascular device (CC) Y   N HAC
Dsphagia Y   Y
Hypotension, unspecified (MCC) Y   Y
Dehydration (CC) Y   N HAC
Mental d/o due to conditions classified elsewhere Y   Y
Parkinson's Y   Y
Electrolyte and fluid d/0 (CC) Y   Y
S. aureus Y   Y HAC

MSDRG weight 1.8444 1.8444
Base rate 4,990.60 4,990.60
9,204.66 6136.44
3,068.22
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Pay-for-ReportingQuality Measurements
  • Reporting Hospital Quality Data for Annual
    Payment Update (RHQDAPU)
  • and
  • Hospital Consumer Assessment of Healthcare
    Providers and Systems (HCAHPS)

18
RHQDAPU Heart Attack
Hospital Compare 10/01/2008 to 09/30/2009
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RHQDAPU Heart Attack
Hospital Compare 10/01/2008 to 09/30/2009
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RHQDAPU Heart Failure
Hospital Compare 10/01/2008 to 09/30/2009
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RHQDAPU Pneumonia
Hospital Compare 10/01/2008 to 09/30/2009
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RHQDAPU Surgical Care
Hospital Compare 10/01/2008 to 09/30/2009
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RHQDAPU Surgical Care
Hospital Compare 10/01/2008 to 09/30/2009
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HCAHPS
Hospital Compare 10/01/2008 to 09/30/2009
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HCAHPS
Hospital Compare 10/01/2008 to 09/30/2009
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Full APU August 15 Deadline!
  • As of July 27, 30 of hospitals had not submitted
    form indicating
  • Registry participation (cardiac surgery, stroke,
    nursing sensitive measures)
  • Attestation of accuracy and completeness of
    quality data
  • 2 APU at risk participation in registry not
    required, but form must be submitted through QNet
    Exchange

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New Measures and Changes (total 46 for FY 2011
APU)
  • Participation in registries (stroke, cardiac
    surgery)
  • Re-admissions 30-day readmissions for heart
    attack, heart failure and pneumonia.
  • Re-admission payment reductions start in 2013
    and will apply to all Medicare discharges
  • Beginning in FY 2015, the Secretary is able to
    expand the list of conditions to include chronic
    obstructive pulmonary disorder and several
    cardiac and vascular surgical procedures, as well
    as any other condition or procedure the Secretary
    chooses.
  • 2015 Hospitals in top quartile for
    Hospital-acquired conditions will have
    payment reduction for all Medicare discharges.
    Will be posted to CMS Hospital Compare website
    before 2015.
  • Physician Quality Reporting System- incentive
    for reporting through 2014. Penalty of 1.5 in
    2015, and 2 penalty in 2016.

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The Patient Protection and Affordable Care Act
(PPAC)
29
Health Care Reform Act 2013 Senate Committee
Apr. 29, 2009, Page 4 Hospitals that meet or
exceed performance standards would receive
value-based bonus payments. The incentive
payments would apply to all MS-DRGs under which a
hospital provides services.
30
PPAC 2010
  • Support comparative effectiveness research by
    establishing a non-profit Patient-Centered
    Outcomes Research Institute.
  • Reauthorize and amend the Indian Health Care
    Improvement Act.

BASED ON HEALTH REFORM IMPLEMENTATION TIMELINE,
THE HENRY J. KAISER FAMILY FOUNDATION
31
PPAC 2011
  • Prohibit federal payments to states for Medicaid
    services related to health care acquired
    conditions.
  • Develop a national quality improvement strategy
    that includes priorities to improve the delivery
    of health care services, patient health outcomes,
    and population health.
  • Prohibit federal payments to states for Medicaid
    services related to health care acquired
    conditions.

BASED ON HEALTH REFORM IMPLEMENTATION TIMELINE,
THE HENRY J. KAISER FAMILY FOUNDATION
32
PPAC 2011
  • Rewards physicians for participation in the
    Physician Quality Reporting Initiative (PQRI).

BASED ON HEALTH REFORM IMPLEMENTATION TIMELINE,
THE HENRY J. KAISER FAMILY FOUNDATION
33
PPAC 2012
  • Allow providers organized as accountable care
    organizations (ACOs) that voluntarily meet
    quality thresholds to share in the cost savings
    they achieve for the Medicare program.
  • Reduce Medicare payments that would otherwise be
    made to hospitals by specified percentages to
    account for excess (preventable) hospital
    readmissions.

BASED ON HEALTH REFORM IMPLEMENTATION TIMELINE,
THE HENRY J. KAISER FAMILY FOUNDATION
34
PPAC 2012
  • Reduce annual market basket updates for home
    health agencies, skilled nursing facilities,
    hospices, and other Medicare providers.
  • Establish an acute hospital value-based
    purchasing program in Medicare on or after
    October 1, 2012.
  • The baseline data for the initial FFY 2013
    calculation in 2013 is April 1, 2010 to March 31,
    2011.
  • The measurement data for FFY 2013 calculations is
    April 1, 2011 to March 31, 2012.

BASED ON HEALTH REFORM IMPLEMENTATION TIMELINE,
THE HENRY J. KAISER FAMILY FOUNDATION
35
PPAC 2012
  • Develop plans to implement value-based purchasing
    programs for skilled nursing facilities, home
    health agencies, and ambulatory surgical centers.
  • Establish VBP demonstration programs for CAHs and
    hospitals excluded from the VBP program because
    of insufficient volumes.

BASED ON HEALTH REFORM IMPLEMENTATION TIMELINE,
THE HENRY J. KAISER FAMILY FOUNDATION
36
PPAC 2012
  • Develop plans to implement value-based purchasing
    programs for skilled nursing facilities, home
    health agencies, and ambulatory surgical centers.
  • Establish VBP demonstration programs for CAHs and
    hospitals excluded from the VBP program because
    of insufficient volumes.

BASED ON HEALTH REFORM IMPLEMENTATION TIMELINE,
THE HENRY J. KAISER FAMILY FOUNDATION
37
ARRA HITECH 2011-2015
  • Meaningful Use
  • Ability to retrieve and accumulate new patient
    data electronically
  • ePrescriptions
  • Patient demo
  • Lab results
  • Patient conditions
  • Ability to communicate quality measures
    electronically
  • Additional Quality Measures

BASED ON HEALTH REFORM IMPLEMENTATION TIMELINE,
THE HENRY J. KAISER FAMILY FOUNDATION
38
South Carolina Medicaid
  • HACs structured by MS-DRG, SC Medicaid still
    codes by Medicare DRG codes. Since FFS pays per
    diem, current MMIS could not simply remove the
    HAC and recalculate the DRG.
  • Plan is for a third party to crosswalk the DRG to
    a MS-DRG, recalculate without the HAC and take a
    percent of total to the original total and apply
    that percentage to the per diem.
  • Mandatory MCOs will not completely solve the
    problem. MHNs remain FFS.

BASED ON HEALTH REFORM IMPLEMENTATION TIMELINE,
THE HENRY J. KAISER FAMILY FOUNDATION
39
2013 Implementation
  • Bonus
  • 2 of annual Marketbasket Update set-aside to be
    earned back as a reward.
  • Budget Neutral

40
Translating Performance Score into Incentive
Payment Example
Full Incentive Earned
Penalties
Hospital A 57 performance 76 Reimbursement
Percent Of VBP Incentive Payment Earned
Hospital Performance Score Of Points Earned
Source CMS Progress Toward Implementing
Value-Based Purchasing Lisa Graberth
18
41
Budget Neutrality
Full Incentive Earned
Translating Performance Score into Incentive
Payment Example
Savings due to penalties
No Bonuses ?
Percent Of VBP Incentive Payment Earned
Hospital Performance Score Of Points Earned
Source CMS Progress Toward Implementing
Value-Based Purchasing Lisa Graberth
18
42
Budget Neutrality
  • How will savings be distributed?
  • Reimburse above 100 to high ranking hospitals
  • Fund programs for underachieving hospitals
  • Fund CMS expansion of the VBC program
  • Other

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Madness to the Method
VBP Math
44
Actual Chart Extracted Data
45
Scoring
Base Period National Scores
Base Period Hospital Scores for Improvement
Comparisons
Actual Scores for Period
Score Calculated From Scoring Period Data
If Score lt 10, Scoring Period Improvement from
Base Period
Higher of Attainment or Improvement
46
Case count lt 100 is not computed
Improvement does not apply once Attainment is
maxed out at 19
Higher of Attainment or Improvement
47
Attainment Score
Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial
Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details

Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008
                     
  National National National Hospital - Base Year Hospital - Base Year Hospital - Scoring Year Hospital - Scoring Year      
Indicator Benchmark Benchmark Threshold Case Count Performance Case Count Performance Attainment Score Improvement Score Final Score
Heart Attack Patients Given ACE Inhibitor or ARB for Left Ventricular Systolic Dysfunction (LVSD) 90.0 90.0 60.0 95 67 120 78 6 5 6
Performance 78 Benchmark 90
Threshold -60 Threshold -60
18 30

18 / 30 .6 18 / 30 .6

.6 x 10 6 .6 x 10 6
(Period Performance - Threshold) /
(Benchmark-Threshold) x 10 The amount you
exceeded the threshold compared to the amount the
national benchmark exceeded the threshold
48
Improvement Score
Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial
Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details

Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008
                     
  National National National Hospital - Base Year Hospital - Base Year Hospital - Scoring Year Hospital - Scoring Year      
Indicator Benchmark Benchmark Threshold Case Count Performance Case Count Performance Attainment Score Improvement Score Final Score
Heart Attack Patients Given ACE Inhibitor or ARB for Left Ventricular Systolic Dysfunction (LVSD) 90.0 90.0 60.0 95 63 120 78 6 5 6
Performance 78 Benchmark 90
Base Period -63 Threshold -60
15 30

15 / 30 .5 15 / 30 .5

.5 x 10 5 .5 x 10 5
(Period Performance Base Period Performance) /
(Benchmark-Threshold) x 10 The amount of your
improvement from base compared to the amount the
national benchmark exceeded the threshold
49
Combining Clinical Process and HCAHPS
Scoresfor a Total Performance Score
The Proration
CMS EXAMPLE Hospital A
Performance Score on RHQDAPU Process Measures (PSPM) 58
Performance Score on Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) (PSH) 54
Total Performance Score (TPS) (.7PSPM) (.3PSH) 57
PSPM 58 X .7 0.406 58 X .7 0.406
PSH 54 X .3 0.162 54 X .3 0.162
TPS 0.568
Source CMS Progress Toward Implementing
Value-Based Purchasing Lisa Graberth
17
50
Percentage recovery of 2 Withhold
CMS Model
51
Percentage recovery of 2 Withhold
Senate Model
52
Time to share the sandbox.
53
Current SCHA Reports
54
Annual Clinical ResultsHCAHPS
55
Hospital, State Top 10 Percentile, US Top 10
Percentile
HCAHPS Measures
CMS National Averages
Hospital Specific Scores
State Comparatien Data Urban/Rural,
Teaching/Non-teaching, Bed Size
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(No Transcript)
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Annual Clinical ResultsHACs
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Actual Occurrences
1.69 of every 1000 patients are at risk of some
HAC
Potential Cases
Rate per Thousand (Actual/potential X 1000)
1.36 of every 1000 patients are at risk of a
fall/trauma
6.21 of every 1000 patients are at risk of
surgical site infection
59
This worksheet was reduced to show just
categories with occurrences for simplicitys sake
Risk
Falls Trauma Catheter Associated UTI Surgical Site Infection Total
Medicare HACs Reported Using POA Indicator (Numerator) 8 1 1 10

Medicare Discharges Related to the HAC Category (Denominator) 5,902 5,902 161 5,902
All Cases All Cases Certain Ortho Procedures, Bariatric Surgery and CABG Cases All Cases

Estimated Medicare HAC Rate per 1,000 Discharges 1.36 0.17 6.21 1.69

Discharges Subject to Reduced Medicare Payment Because the HAC Reported was the Only Qualifying CC/MCC 1 0 0 1
Occurrences
Cost
60
This indicates the number of occurrences that not
only impacted your quality score, but the HAC was
the only paying diagnosis, so no payment was made
for the entire account
61
Occurrences (Percent of Total)
62
Risk (Cases pr Thousand)
63
(No Transcript)
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Quarterly Outcomes and Financial Impact
65
RHQDAPU Scores
66
HCAHPS Scores
67
CMS Model
Assumes No Distribution of Excess Pool Dollars Assumes No Distribution of Excess Pool Dollars Assumes No Distribution of Excess Pool Dollars Assumes No Distribution of Excess Pool Dollars Assumes No Distribution of Excess Pool Dollars Assumes No Distribution of Excess Pool Dollars Assumes No Distribution of Excess Pool Dollars Assumes No Distribution of Excess Pool Dollars
               
               
Piedmont Medical Center Piedmont Medical Center Piedmont Medical Center          
Piedmont Medical Center Piedmont Medical Center Piedmont Medical Center FFY 2013 FFY 2014 FFY 2015 FFY 2016 FFY 2017
Process Measures Score 82   1 Carve-Out 1.25 Carve-Out 1.5 Carve-Out 1.75 Carve-Out 2 Carve-Out
HCAHPS Score 33 Dollars Contributed to VBP 564,000 728,000 728,000 876,000 1,033,000
Overall VBP Score 67 Expected Payment from VBP 506,961 654,375 654,375 787,408 928,530
Payment Percentage 90 Excess Pool Dollars (57,039) (73,625) (73,625) (88,592) (104,470)
South Carolina State South Carolina State South Carolina State          
South Carolina State South Carolina State South Carolina State FFY 2013 FFY 2014 FFY 2015 FFY 2016 FFY 2017
Process Measures Score 84   1 Carve-Out 1.25 Carve-Out 1.5 Carve-Out 1.75 Carve-Out 2 Carve-Out
HCAHPS Score 34 Dollars Contributed to VBP 18,722,000 24,152,000 24,152,000 29,050,000 34,263,000
Overall VBP Score 69 Expected Payment from VBP 17,057,667 22,004,955 22,004,955 26,467,536 31,217,115
Payment Percentage 91 Excess Pool Dollars (1,664,333) (2,147,045) (2,147,045) (2,582,464) (3,045,885)
68
Senate Model
69
Problems with current reports
  • Only preparing and reporting quarterly
  • Hospitals are not tracking and trending
  • Age of data
  • No longer actionable
  • Hospitals with purchased software have data
    available but dont use it
  • Small hospitals cant afford software

70
the clock is already ticking.
The VBP time bomb...
71
Data Application
Baseline Period For Comparative data to use as a
based for measuring improvement
Measurement Period For determination of current
score
Application Period Calculated adjustment applied
to reimbursement
72
Data Application
Measurement Data 2011
2013 Application
Score Determinations 2012
U.S. Department of Health and Human Services
REPORT TO CONGRESS Plan to Implement a
Medicare Hospital Value-Based Purchasing Program
November 21, 2007
73
(No Transcript)
74

The South Carolina Hospital Association Value
Based Care Pilot Project March, 2010 Funding
provided by The University of South
Carolina Arnold School of Public Health Centers
for Health Policies and Policy Research A²HA
Finance Spring Meeting, March 22, 2010 A²HA
Quality Spring Meeting, May 24,
2010 Barney Osborne and Karen Reeves
75
Purpose
  • To help our members prepare for healthcare
    reform and VBP, we established the SCHA
    finance-quality pilot. VBP will require hospital
    finance departments and hospital clinical quality
    staff to work closely together. The Workgroup had
    three primary goals

76
Purpose
  • The Workgroup had three primary goals
  • Identify best practices and models in S.C.
    hospitals that promote the alignment of finance
    and quality,
  • Develop a model financial-quality dashboard to be
    used by hospitals to track monthly quality
    outcomes.
  • Identify the data report elements that all S.C.
    hospitals can easily utilize in their
    finance-quality work.

77
End Products
  • Document on Characteristics and Best Practices at
    Hospitals with Quality-Finance-Clinical Alignment
    for VBP
  • Compilation of best practices, policies and
    procedures
  • Computer program to model and project data
    linking quality and finance on a monthly basis
  • Sample dashboards which include statewide
    benchmark data
  • Educational program collateral

78
Expected Outcomes
  • Pilot sites adopt dashboards, computer program
  • 10 additional hospitals implement improvement
    activities (adopting tools, establishing joint
    quality and finance team meetings)
  • Surveys show improvement and identified needs
    met. Opportunities for future activities
    identified.
  • Positive financial impact of implemented changes
    occurred.

79
Observations
  • Lack of actionable data
  • MySCHospital.org and HospitalCompare data is too
    old to be used to resolve real-time problems
  • Ahead of your time Michael T. Rapp, MD, JD,
    FACEP
  • CMS Director. Quality Measurement and
    Health Assessment Group
  • High cost of quality data tracking systems
  • No cooperation from vendors
  • No peer comparisons outside of purchased reports
    or multi-hospital systems

80
Observations
  • CFOs are unaware of the financial risk of VBP
  • No joint efforts between the quality and finance
    departments
  • Most quality teams do not include a financial
    specialist
  • Most CFOs do not attend quality meetings and have
    little coordination with the clinical departments
    except for issues relating to finance
  • Few cost accounting departments evaluate the
    additional cost of care due to quality errors
    added LOS, higher level of care for corrective
    measures, legal risks
  • Little comparison of hospital staffing levels
    outside of multi-hospital systems

81
Observations
  • Quality directors are uninformed about the
    financial risks of VBP
  • Few directors had knowledge of the Medicare cost
    reporting structure
  • Few had an understanding of how CMS proposes to
    penalize for non-compliance
  • Few had communicated the need for additional
    attention to quality results during the budgeting
    process

82
Observations
  • Small and rural hospitals have the greatest risk
    of non-compliance
  • The lack of funds to purchase the necessary
    software and support services
  • Dependency on paper records and totally manual
    gathering quality measures data
  • Lack of budgetary allocations to provide the
    staff necessary to perform analysis, recognize
    weaknesses and create recovery plans
  • The lack of built-in edits of reported data
  • Dependency on CMS data results which are no
    longer actionable because of their age.

83
The Reports
  • Real-time actionable data
  • Brainless, seamless and effortless

84
  • Jasons Sanders, Reimbursement and Budget Analyst

85
The Next Level
Put on your big girl panties and deal with it.
86
Implementation
CMS
87
Quality as a Key Component of Finance
  • Component of reimbursement
  • Determines annual increases
  • Component of cost
  • Poor quality has a defined cost

Must measure costs relative to quality
88
Internal Approaches
  • Cost Accounting / Reporting
  • Never Events and HACs
  • Lost reimbursement (net)
  • Cost of initial visit/procedure
  • Cost of corrective visit/procedure
  • Cost of increasing quality compared to the
    potential lost reimbursement

89
Internal Approaches
  • Include quality as a component of productivity
  • Comparing costs not only to volume and charges
    but to quality outcomes.
  • Does quality suffer if cost (staff) is reduced?
  • Re-evaluate the value of your quality department
    now is a revenue department.

90
The Next Level Quality as a Component of
Productivity
91
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92
(No Transcript)
93
Find New Approaches
94
Measurement / Comparison Internally
  • Staffing has usually been negotiated in budget
    based on history and demands rather than
    justified like all other expenses.
  • There is little measurement of how staffing
    relates to outcomes in order to require
    accountability
  • No predefined standards for data or calculations
  • Difficult to measure and evaluate because of
    variance in staffing needs for sicker patients
    Severity is a determinate of staffing intensity

95
Challenge New Ways of Thinking
  • Comparing to other distinct units
  • Comparing to other facilities

96
Mnhrs/APD
Acute 1 150
Acute 2 160
Acute 2 175
Oncology 260
ICU 330
Average 154
Acuity
Quality
97
Neutralize Severity
  • Medicare Case Mix index
  • Average of DRG weights
  • Used to apply cost of care based on severity of
    the average patient based on extensive national
    reviews
  • Adjusting by CMI can convert the denominator to a
    relative amount for both acute and specialties

98
Mnhrs per Patient Day CMI Mnhrs Per Adjusted Patient Day
Acute 1 150 0.96 156
Acute 2 160 1.02 157
Acute 2 175 1.15 152
Oncology 260 1.60 163
ICU 330 2.10 157
Average 154 156
99
Net of Severity
No correlation Investigate productivity and
process
Mnhrs per APD CMI Adjusted Mnhrs Per Apd
Acute 1 150 0.96 156
Acute 2 160 1.02 156
Acute 2 175 1.15 152
Oncology 260 1.60 162
ICU 330 2.10 157
Average 154 156
There may be a correlation Investigate staffing
level
100
Compare
101
Use of results
  • Identify productive and less-productive
    departments
  • Review strengths and weaknesses of each notable
    variances to identify focus areas to either
    reduce cost by improved productivity and/or
    improve quality outcomes
  • Highlight focus areas for monitoring and
    evaluation through use of value stream mapping
    (LEAN, Toyota, Six Sigma) or other
    technology/functional approaches
  • Maintain routine measurements to identify
    successes, failures and new potential improvements

102
Lean and Related Trends
  • Waste Reduction Targets (National Priorities
    Partnership)
  • Inappropriate medication use
  • Unnecessary laboratory tests
  • Unwarranted maternity care interventions
  • Unwarranted diagnostic procedures
  • Unwarranted procedures

103
Waste Reduction Targets (National Priorities
Partnership)
  • Preventable emergency department
  • visits and hospitalizations
  • Inappropriate non-palliative services
  • at end of life
  • Potentially harmful preventive
  • services with no benefit

104
CMS Don Berwick
Per Capita Cost
Population Health
Experience of Care
105
Any questions before we close?
106
Closing
  • The time is now 2011 quality results will be a
    component of the first VBP adjustments in 2013
  • Tracking real-time is imperative to intercept
    problems and reduce the length of impact
  • Quality is now a component of productivity
  • New quality focused approach to cost accounting
  • Quality Department as a financial function
  • Quality Department as a revenue department

107
Closing
  • Beware of contractions
  • Preventative medicine CPT reimbursement
  • Defensive medicine VBP waste reduction
  • Tort reform Defensive medicine
  • Bundling Starke law
  • Outcomes - ALOS
  • Readmissions ALOS
  • This is just the beginning of a new era.

108
Thank you.
109
Value Based Purchasing Combining Cost and
Quality Michael T. Rapp, MD, JD, FACEPDirector,
Quality Measurement and Health Assessment
GroupOffice of Clinical Standards Quality
Centers for Medicare Medicaid Services
http//www.ncvhs.hhs.gov/091014p4.pdf
110
Hospital Acquired Conditions Projected Costs
savings Savings estimates for the next 5 fiscal
years are shown below Year Savings (in
millions) FY 2009 ................................
...21 FY 2010 ...................................
. 21 FY 2011 ....................................
21 FY 2012 ....................................
22 FY 2013 .................................... 22
111
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112
Distribution of AMI Readmission by HRR
113
Distribution of HF Readmission by HRR 4
114
Distribution of Pneumonia Readmission by HRR 43
115
CMS ultimate goal is to shift the curve
116
(No Transcript)
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2010-2011 SC HFMA - Annual Institute Embassy Suites Hotel Columbia, SC July 30, 2010

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Title: 2010-2011 SC HFMA - Annual Institute Embassy Suites Hotel Columbia, SC July 30, 2010


1
2010-2011 SC HFMA - Annual InstituteEmbassy
Suites HotelColumbia, SCJuly 30, 2010
Quality and Finance The Stars Align
Jason Sanders, Budget and Reimbursement, Sisters
of Charity Providence Karen Reeves, VP Quality
Compliance and Risk Management, SCHA Barney
Osborne, VP Finance, SCHA
2
Institute of Medicine and AHRQ
RHQDAPU and HCAHPS
Pay for Reporting
Never Events
Hospital Acquired Conditions
Quality and Finance The Stars Align
MS DRGs
ARRA HITECH Meaningful Use
Value Based Purchasing
Bundling
30 Day Readmissions
Medicaid HACs
3
Quality or Finance
4
Quality or Finance
  • The DRG and Case Management
  • Case management clinical
  • Medical Records clinical
  • Forced hospitals manage physicians
  • Counterbalance
  • Hospitals risk physician discharge
  • Value Based Purchasing
  • Hospitals manage physicians and hospital
  • Shared risk

5
Before the math, a brief summary of VBP
just in case you havent heard
6
A Brief History of Pay for Performance (P4P)
  • 1980s and 1990s
  • Increase in HMOs and managed care
  • Capitated payment models
  • Physician incentives based on financial
    performance
  • 2000-Present
  • Institute of Medicine reports
  • To Err is Human and Crossing the Quality Chasm
  • Rewarding provider Performance
  • Physician and hospital incentives based on
    clinical performance
  • Legislated changes
  • Pay for Reporting (2 penalty)
  • Senate and CMS models for value-based purchasing

7
What are the simple rules for the 21st Century
Healthcare System
What Patients Should Expect (IOM Crossing the Quality Chasm, p. 67) What Patients Sometimes Receive
Care is beyond the patient visits, wherever you need it Care is fragmented
Individualization Care can be confusing and repetitive
Transparency Communication and information sometimes minimal
Information is a record and yours to know Integrated Electronic Health Records rarely exist minimal and disjointed information given to patients
Decision-making is based on science Is care based on evidence-based practices?
Do no harm Is patient safety at the core of quality?
8
Never Events

1. Wrong Surgical or Other Invasive Procedure 2.
Surgical or Other Invasive Procedure
Performed on the Wrong Body Part 3. Surgical or
Other Invasive Procedure Performed on the Wrong
Patient Medicare will not cover
hospitalizations and other services related to
these non-covered procedures. All services
provided in OR when an error occurs are
considered related and therefore not covered. All
providers in OR who could bill individually are
not eligible for payment. All related services
provided during same hospitalization are not
covered. http//www.cms.gov/transmittals/downloa
ds/R101NCD.pdf
9
Hospital-Acquired Conditions


These are conditions that are high cost/volume,
resulting in higher paying DRG when present as a
secondary diagnosis, and which could reasonably
have been prevented 1. Foreign Object Retained
After Surgery 2. Air Embolism 3. Blood
Incompatibility 4. Pressure Ulcers (Stage III and
IV) 5. Falls and Trauma (Fractures,
Dislocations, Intracranial Injuries, Crushing
Injuries, Burns, Electric Shock)
10
Hospital-Acquired Conditions
6. Manifestations of Poor Glycemic Control
(Diabetic Ketoacidosis, Nonketotic Hyperosmolar
Coma, Hypoglycemic Coma, Secondary Diabetes with
Ketoacidosis, Secondary Diabetes with
Hyperosmolarity) 7. Catheter-Associated Urinary
Tract Infection (UTI) 8. Vascular
Catheter-Associated Infection 9. Surgical Site
Infection Following Coronary Artery Bypass
Graft (CABG), Bariatric Surgery, Certain
Orthopedic Procedures 10. Deep Vein Thrombosis
(DVT)/Pulmonary Embolism (PE) Following
total hip/knee replacement       
11
POA Indicator Descriptor
  • Y Indicates that the condition was present on
    admission.
  • W Affirms that the provider has determined based
    on data and clinical judgment that it is not
    possible to document when the onset of the
    condition occurred.
  • N Indicates that the condition was not present on
    admission.
  • U Indicates that the documentation is
    insufficient to determine if the condition was
    present at the time of admission.
  • 1 Signifies exemption from POA reporting. CMS
    established this code as a workaround to blank
    reporting on the electronic 4010A1. A list of
    exempt ICD-9-CM diagnosis codes is available in
    the ICD-9-CM Official

Source Federal Register
12
CMS Example
MS-DRG Assignment (Examples for a single secondary diagnosis) POA Status of Secondary Diagnosis Average Payment
Principal Diagnosis Stroke Without CC/MCC -- 5,347.98
Principal Diagnosis Stroke With secondary CC Injury due to a fall (code 836.4) Y Y 6,177.43
Principal Diagnosis Stroke With secondary CC - Injury due to a fall (code 836.4) Y N 5,347.98
Baseline
(829.45)
Source CMS Progress Toward Implementing
Value-Based Purchasing Lisa Graberth
13
Payment Implications
  • More impact on accounts where the HAC was a
    CC/MCCs
  • More impact on accounts with few CC/MCCs
  • Heavier impact on small/rural facilities
  • Less impact on accounts with many other CC/MCCs
  • Impact on large facilities will increase as more
    CC/MCCs become HACs

14
SC Example With Few MCC/CCs
Primary Procedure Incisional hernia repair Primary Procedure Incisional hernia repair Primary Procedure Incisional hernia repair Primary Procedure Incisional hernia repair Primary Procedure Incisional hernia repair
Diagnoses Diagnoses POA POA
Ventral hernia w/ obstruction Ventral hernia w/ obstruction Ventral hernia w/ obstruction Y Y
Infection and inflammatory rcn due to indwelling catheter (CC) Infection and inflammatory rcn due to indwelling catheter (CC) Infection and inflammatory rcn due to indwelling catheter (CC) Infection and inflammatory rcn due to indwelling catheter (CC) Infection and inflammatory rcn due to indwelling catheter (CC) Y   N
UTI (CC)         Y   N
Diabetes mellitus w/o complication Diabetes mellitus w/o complication Diabetes mellitus w/o complication Diabetes mellitus w/o complication Y Y
Essential hypertension Essential hypertension Essential hypertension Y Y
Unspecified hypothyroidism Unspecified hypothyroidism Unspecified hypothyroidism Y Y
Other unspecified hyperlipidemia Other unspecified hyperlipidemia Other unspecified hyperlipidemia Other unspecified hyperlipidemia Y Y
Coronary atherosclerosis of unspecified type vessel Coronary atherosclerosis of unspecified type vessel Coronary atherosclerosis of unspecified type vessel Coronary atherosclerosis of unspecified type vessel Coronary atherosclerosis of unspecified type vessel Y Y
Venous insufficiency, unspecified Venous insufficiency, unspecified Venous insufficiency, unspecified Venous insufficiency, unspecified Y Y
Spondylosis w/o myelopathy Spondylosis w/o myelopathy Spondylosis w/o myelopathy Y Y
Overweight Overweight Y Y
Other chronic non alcoholic liver disease Other chronic non alcoholic liver disease Other chronic non alcoholic liver disease Other chronic non alcoholic liver disease Other chronic non alcoholic liver disease Y Y
Constipation Constipation Y Y
Esophageal reflux Esophageal reflux Y Y
Gout, unspecified Gout, unspecified Y Y

MSDRG weight MSDRG weight 1.4092 1.0147
Base rate 4,990.60 4,990.60
7,032.75 5,063.96

Impact (1,968.79)

28
Source SC ORS
15
SC Example With Many MCC/CCs
Primary Procedure Other Enterostomy
Diagnoses POA POA
Pneumonitis due to inhalation of food/vomitus Y   Y
Toxic encephalopathy (CC) Y   Y
Decubitis ulcer, lower back (CC) (MCC) Y   N HAC
Grand mal status (CC) Y   Y
Other protein-calorie malnutrition (CC) Y   Y
UTI (CC) Y   Y
Deep vein thrombosis (CC) Y   N
Mechanical complication of vascular device (CC) Y   N
Dsphagia Y   Y
Hypotension, unspecified (MCC) Y   Y
Dehydration (CC) Y   N
Mental d/o due to conditions classified elsewhere Y   Y
Parkinson's Y   Y
Electrolyte and fluid d/0 (CC) Y   Y
S. aureus Y   Y HAC

MSDRG weight 1.8444 1.8444
Base rate 4,990.60 4,990.60
9,204.66 9,204.66
Y
Y
Y
No Impact
Source SC ORS
16
Hypothetical With Many HACs
Primary Procedure Other Enterostomy
Diagnoses POA POA
Pneumonitis due to inhalation of food/vomitus Y   Y
Toxic encephalopathy (CC) Y   Y
Decubitis ulcer, lower back (CC) (MCC) Y   N HAC
Grand mal status (CC) Y   Y
Other protein-calorie malnutrition (CC) Y   Y
UTI (CC) Y   Y
Deep vein thrombosis (CC) Y   N HAC
Mechanical complication of vascular device (CC) Y   N HAC
Dsphagia Y   Y
Hypotension, unspecified (MCC) Y   Y
Dehydration (CC) Y   N HAC
Mental d/o due to conditions classified elsewhere Y   Y
Parkinson's Y   Y
Electrolyte and fluid d/0 (CC) Y   Y
S. aureus Y   Y HAC

MSDRG weight 1.8444 1.8444
Base rate 4,990.60 4,990.60
9,204.66 6136.44
3,068.22
17
Pay-for-ReportingQuality Measurements
  • Reporting Hospital Quality Data for Annual
    Payment Update (RHQDAPU)
  • and
  • Hospital Consumer Assessment of Healthcare
    Providers and Systems (HCAHPS)

18
RHQDAPU Heart Attack
Hospital Compare 10/01/2008 to 09/30/2009
19
RHQDAPU Heart Attack
Hospital Compare 10/01/2008 to 09/30/2009
20
RHQDAPU Heart Failure
Hospital Compare 10/01/2008 to 09/30/2009
21
RHQDAPU Pneumonia
Hospital Compare 10/01/2008 to 09/30/2009
22
RHQDAPU Surgical Care
Hospital Compare 10/01/2008 to 09/30/2009
23
RHQDAPU Surgical Care
Hospital Compare 10/01/2008 to 09/30/2009
24
HCAHPS
Hospital Compare 10/01/2008 to 09/30/2009
25
HCAHPS
Hospital Compare 10/01/2008 to 09/30/2009
26
Full APU August 15 Deadline!
  • As of July 27, 30 of hospitals had not submitted
    form indicating
  • Registry participation (cardiac surgery, stroke,
    nursing sensitive measures)
  • Attestation of accuracy and completeness of
    quality data
  • 2 APU at risk participation in registry not
    required, but form must be submitted through QNet
    Exchange

27
New Measures and Changes (total 46 for FY 2011
APU)
  • Participation in registries (stroke, cardiac
    surgery)
  • Re-admissions 30-day readmissions for heart
    attack, heart failure and pneumonia.
  • Re-admission payment reductions start in 2013
    and will apply to all Medicare discharges
  • Beginning in FY 2015, the Secretary is able to
    expand the list of conditions to include chronic
    obstructive pulmonary disorder and several
    cardiac and vascular surgical procedures, as well
    as any other condition or procedure the Secretary
    chooses.
  • 2015 Hospitals in top quartile for
    Hospital-acquired conditions will have
    payment reduction for all Medicare discharges.
    Will be posted to CMS Hospital Compare website
    before 2015.
  • Physician Quality Reporting System- incentive
    for reporting through 2014. Penalty of 1.5 in
    2015, and 2 penalty in 2016.

28
The Patient Protection and Affordable Care Act
(PPAC)
29
Health Care Reform Act 2013 Senate Committee
Apr. 29, 2009, Page 4 Hospitals that meet or
exceed performance standards would receive
value-based bonus payments. The incentive
payments would apply to all MS-DRGs under which a
hospital provides services.
30
PPAC 2010
  • Support comparative effectiveness research by
    establishing a non-profit Patient-Centered
    Outcomes Research Institute.
  • Reauthorize and amend the Indian Health Care
    Improvement Act.

BASED ON HEALTH REFORM IMPLEMENTATION TIMELINE,
THE HENRY J. KAISER FAMILY FOUNDATION
31
PPAC 2011
  • Prohibit federal payments to states for Medicaid
    services related to health care acquired
    conditions.
  • Develop a national quality improvement strategy
    that includes priorities to improve the delivery
    of health care services, patient health outcomes,
    and population health.
  • Prohibit federal payments to states for Medicaid
    services related to health care acquired
    conditions.

BASED ON HEALTH REFORM IMPLEMENTATION TIMELINE,
THE HENRY J. KAISER FAMILY FOUNDATION
32
PPAC 2011
  • Rewards physicians for participation in the
    Physician Quality Reporting Initiative (PQRI).

BASED ON HEALTH REFORM IMPLEMENTATION TIMELINE,
THE HENRY J. KAISER FAMILY FOUNDATION
33
PPAC 2012
  • Allow providers organized as accountable care
    organizations (ACOs) that voluntarily meet
    quality thresholds to share in the cost savings
    they achieve for the Medicare program.
  • Reduce Medicare payments that would otherwise be
    made to hospitals by specified percentages to
    account for excess (preventable) hospital
    readmissions.

BASED ON HEALTH REFORM IMPLEMENTATION TIMELINE,
THE HENRY J. KAISER FAMILY FOUNDATION
34
PPAC 2012
  • Reduce annual market basket updates for home
    health agencies, skilled nursing facilities,
    hospices, and other Medicare providers.
  • Establish an acute hospital value-based
    purchasing program in Medicare on or after
    October 1, 2012.
  • The baseline data for the initial FFY 2013
    calculation in 2013 is April 1, 2010 to March 31,
    2011.
  • The measurement data for FFY 2013 calculations is
    April 1, 2011 to March 31, 2012.

BASED ON HEALTH REFORM IMPLEMENTATION TIMELINE,
THE HENRY J. KAISER FAMILY FOUNDATION
35
PPAC 2012
  • Develop plans to implement value-based purchasing
    programs for skilled nursing facilities, home
    health agencies, and ambulatory surgical centers.
  • Establish VBP demonstration programs for CAHs and
    hospitals excluded from the VBP program because
    of insufficient volumes.

BASED ON HEALTH REFORM IMPLEMENTATION TIMELINE,
THE HENRY J. KAISER FAMILY FOUNDATION
36
PPAC 2012
  • Develop plans to implement value-based purchasing
    programs for skilled nursing facilities, home
    health agencies, and ambulatory surgical centers.
  • Establish VBP demonstration programs for CAHs and
    hospitals excluded from the VBP program because
    of insufficient volumes.

BASED ON HEALTH REFORM IMPLEMENTATION TIMELINE,
THE HENRY J. KAISER FAMILY FOUNDATION
37
ARRA HITECH 2011-2015
  • Meaningful Use
  • Ability to retrieve and accumulate new patient
    data electronically
  • ePrescriptions
  • Patient demo
  • Lab results
  • Patient conditions
  • Ability to communicate quality measures
    electronically
  • Additional Quality Measures

BASED ON HEALTH REFORM IMPLEMENTATION TIMELINE,
THE HENRY J. KAISER FAMILY FOUNDATION
38
South Carolina Medicaid
  • HACs structured by MS-DRG, SC Medicaid still
    codes by Medicare DRG codes. Since FFS pays per
    diem, current MMIS could not simply remove the
    HAC and recalculate the DRG.
  • Plan is for a third party to crosswalk the DRG to
    a MS-DRG, recalculate without the HAC and take a
    percent of total to the original total and apply
    that percentage to the per diem.
  • Mandatory MCOs will not completely solve the
    problem. MHNs remain FFS.

BASED ON HEALTH REFORM IMPLEMENTATION TIMELINE,
THE HENRY J. KAISER FAMILY FOUNDATION
39
2013 Implementation
  • Bonus
  • 2 of annual Marketbasket Update set-aside to be
    earned back as a reward.
  • Budget Neutral

40
Translating Performance Score into Incentive
Payment Example
Full Incentive Earned
Penalties
Hospital A 57 performance 76 Reimbursement
Percent Of VBP Incentive Payment Earned
Hospital Performance Score Of Points Earned
Source CMS Progress Toward Implementing
Value-Based Purchasing Lisa Graberth
18
41
Budget Neutrality
Full Incentive Earned
Translating Performance Score into Incentive
Payment Example
Savings due to penalties
No Bonuses ?
Percent Of VBP Incentive Payment Earned
Hospital Performance Score Of Points Earned
Source CMS Progress Toward Implementing
Value-Based Purchasing Lisa Graberth
18
42
Budget Neutrality
  • How will savings be distributed?
  • Reimburse above 100 to high ranking hospitals
  • Fund programs for underachieving hospitals
  • Fund CMS expansion of the VBC program
  • Other

43
Madness to the Method
VBP Math
44
Actual Chart Extracted Data
45
Scoring
Base Period National Scores
Base Period Hospital Scores for Improvement
Comparisons
Actual Scores for Period
Score Calculated From Scoring Period Data
If Score lt 10, Scoring Period Improvement from
Base Period
Higher of Attainment or Improvement
46
Case count lt 100 is not computed
Improvement does not apply once Attainment is
maxed out at 19
Higher of Attainment or Improvement
47
Attainment Score
Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial
Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details

Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008
                     
  National National National Hospital - Base Year Hospital - Base Year Hospital - Scoring Year Hospital - Scoring Year      
Indicator Benchmark Benchmark Threshold Case Count Performance Case Count Performance Attainment Score Improvement Score Final Score
Heart Attack Patients Given ACE Inhibitor or ARB for Left Ventricular Systolic Dysfunction (LVSD) 90.0 90.0 60.0 95 67 120 78 6 5 6
Performance 78 Benchmark 90
Threshold -60 Threshold -60
18 30

18 / 30 .6 18 / 30 .6

.6 x 10 6 .6 x 10 6
(Period Performance - Threshold) /
(Benchmark-Threshold) x 10 The amount you
exceeded the threshold compared to the amount the
national benchmark exceeded the threshold
48
Improvement Score
Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial Reeves-Osborne Memorial
Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details Process Measures Score Details

Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008 Base Period April 2007 - March 2008
                     
  National National National Hospital - Base Year Hospital - Base Year Hospital - Scoring Year Hospital - Scoring Year      
Indicator Benchmark Benchmark Threshold Case Count Performance Case Count Performance Attainment Score Improvement Score Final Score
Heart Attack Patients Given ACE Inhibitor or ARB for Left Ventricular Systolic Dysfunction (LVSD) 90.0 90.0 60.0 95 63 120 78 6 5 6
Performance 78 Benchmark 90
Base Period -63 Threshold -60
15 30

15 / 30 .5 15 / 30 .5

.5 x 10 5 .5 x 10 5
(Period Performance Base Period Performance) /
(Benchmark-Threshold) x 10 The amount of your
improvement from base compared to the amount the
national benchmark exceeded the threshold
49
Combining Clinical Process and HCAHPS
Scoresfor a Total Performance Score
The Proration
CMS EXAMPLE Hospital A
Performance Score on RHQDAPU Process Measures (PSPM) 58
Performance Score on Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) (PSH) 54
Total Performance Score (TPS) (.7PSPM) (.3PSH) 57
PSPM 58 X .7 0.406 58 X .7 0.406
PSH 54 X .3 0.162 54 X .3 0.162
TPS 0.568
Source CMS Progress Toward Implementing
Value-Based Purchasing Lisa Graberth
17
50
Percentage recovery of 2 Withhold
CMS Model
51
Percentage recovery of 2 Withhold
Senate Model
52
Time to share the sandbox.
53
Current SCHA Reports
54
Annual Clinical ResultsHCAHPS
55
Hospital, State Top 10 Percentile, US Top 10
Percentile
HCAHPS Measures
CMS National Averages
Hospital Specific Scores
State Comparatien Data Urban/Rural,
Teaching/Non-teaching, Bed Size
56
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57
Annual Clinical ResultsHACs
58
Actual Occurrences
1.69 of every 1000 patients are at risk of some
HAC
Potential Cases
Rate per Thousand (Actual/potential X 1000)
1.36 of every 1000 patients are at risk of a
fall/trauma
6.21 of every 1000 patients are at risk of
surgical site infection
59
This worksheet was reduced to show just
categories with occurrences for simplicitys sake
Risk
Falls Trauma Catheter Associated UTI Surgical Site Infection Total
Medicare HACs Reported Using POA Indicator (Numerator) 8 1 1 10

Medicare Discharges Related to the HAC Category (Denominator) 5,902 5,902 161 5,902
All Cases All Cases Certain Ortho Procedures, Bariatric Surgery and CABG Cases All Cases

Estimated Medicare HAC Rate per 1,000 Discharges 1.36 0.17 6.21 1.69

Discharges Subject to Reduced Medicare Payment Because the HAC Reported was the Only Qualifying CC/MCC 1 0 0 1
Occurrences
Cost
60
This indicates the number of occurrences that not
only impacted your quality score, but the HAC was
the only paying diagnosis, so no payment was made
for the entire account
61
Occurrences (Percent of Total)
62
Risk (Cases pr Thousand)
63
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64
Quarterly Outcomes and Financial Impact
65
RHQDAPU Scores
66
HCAHPS Scores
67
CMS Model
Assumes No Distribution of Excess Pool Dollars Assumes No Distribution of Excess Pool Dollars Assumes No Distribution of Excess Pool Dollars Assumes No Distribution of Excess Pool Dollars Assumes No Distribution of Excess Pool Dollars Assumes No Distribution of Excess Pool Dollars Assumes No Distribution of Excess Pool Dollars Assumes No Distribution of Excess Pool Dollars
               
               
Piedmont Medical Center Piedmont Medical Center Piedmont Medical Center          
Piedmont Medical Center Piedmont Medical Center Piedmont Medical Center FFY 2013 FFY 2014 FFY 2015 FFY 2016 FFY 2017
Process Measures Score 82   1 Carve-Out 1.25 Carve-Out 1.5 Carve-Out 1.75 Carve-Out 2 Carve-Out
HCAHPS Score 33 Dollars Contributed to VBP 564,000 728,000 728,000 876,000 1,033,000
Overall VBP Score 67 Expected Payment from VBP 506,961 654,375 654,375 787,408 928,530
Payment Percentage 90 Excess Pool Dollars (57,039) (73,625) (73,625) (88,592) (104,470)
South Carolina State South Carolina State South Carolina State          
South Carolina State South Carolina State South Carolina State FFY 2013 FFY 2014 FFY 2015 FFY 2016 FFY 2017
Process Measures Score 84   1 Carve-Out 1.25 Carve-Out 1.5 Carve-Out 1.75 Carve-Out 2 Carve-Out
HCAHPS Score 34 Dollars Contributed to VBP 18,722,000 24,152,000 24,152,000 29,050,000 34,263,000
Overall VBP Score 69 Expected Payment from VBP 17,057,667 22,004,955 22,004,955 26,467,536 31,217,115
Payment Percentage 91 Excess Pool Dollars (1,664,333) (2,147,045) (2,147,045) (2,582,464) (3,045,885)
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Senate Model
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Problems with current reports
  • Only preparing and reporting quarterly
  • Hospitals are not tracking and trending
  • Age of data
  • No longer actionable
  • Hospitals with purchased software have data
    available but dont use it
  • Small hospitals cant afford software

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the clock is already ticking.
The VBP time bomb...
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Data Application
Baseline Period For Comparative data to use as a
based for measuring improvement
Measurement Period For determination of current
score
Application Period Calculated adjustment applied
to reimbursement
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Data Application
Measurement Data 2011
2013 Application
Score Determinations 2012
U.S. Department of Health and Human Services
REPORT TO CONGRESS Plan to Implement a
Medicare Hospital Value-Based Purchasing Program
November 21, 2007
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The South Carolina Hospital Association Value
Based Care Pilot Project March, 2010 Funding
provided by The University of South
Carolina Arnold School of Public Health Centers
for Health Policies and Policy Research A²HA
Finance Spring Meeting, March 22, 2010 A²HA
Quality Spring Meeting, May 24,
2010 Barney Osborne and Karen Reeves
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Purpose
  • To help our members prepare for healthcare
    reform and VBP, we established the SCHA
    finance-quality pilot. VBP will require hospital
    finance departments and hospital clinical quality
    staff to work closely together. The Workgroup had
    three primary goals

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Purpose
  • The Workgroup had three primary goals
  • Identify best practices and models in S.C.
    hospitals that promote the alignment of finance
    and quality,
  • Develop a model financial-quality dashboard to be
    used by hospitals to track monthly quality
    outcomes.
  • Identify the data report elements that all S.C.
    hospitals can easily utilize in their
    finance-quality work.

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End Products
  • Document on Characteristics and Best Practices at
    Hospitals with Quality-Finance-Clinical Alignment
    for VBP
  • Compilation of best practices, policies and
    procedures
  • Computer program to model and project data
    linking quality and finance on a monthly basis
  • Sample dashboards which include statewide
    benchmark data
  • Educational program collateral

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Expected Outcomes
  • Pilot sites adopt dashboards, computer program
  • 10 additional hospitals implement improvement
    activities (adopting tools, establishing joint
    quality and finance team meetings)
  • Surveys show improvement and identified needs
    met. Opportunities for future activities
    identified.
  • Positive financial impact of implemented changes
    occurred.

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Observations
  • Lack of actionable data
  • MySCHospital.org and HospitalCompare data is too
    old to be used to resolve real-time problems
  • Ahead of your time Michael T. Rapp, MD, JD,
    FACEP
  • CMS Director. Quality Measurement and
    Health Assessment Group
  • High cost of quality data tracking systems
  • No cooperation from vendors
  • No peer comparisons outside of purchased reports
    or multi-hospital systems

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Observations
  • CFOs are unaware of the financial risk of VBP
  • No joint efforts between the quality and finance
    departments
  • Most quality teams do not include a financial
    specialist
  • Most CFOs do not attend quality meetings and have
    little coordination with the clinical departments
    except for issues relating to finance
  • Few cost accounting departments evaluate the
    additional cost of care due to quality errors
    added LOS, higher level of care for corrective
    measures, legal risks
  • Little comparison of hospital staffing levels
    outside of multi-hospital systems

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Observations
  • Quality directors are uninformed about the
    financial risks of VBP
  • Few directors had knowledge of the Medicare cost
    reporting structure
  • Few had an understanding of how CMS proposes to
    penalize for non-compliance
  • Few had communicated the need for additional
    attention to quality results during the budgeting
    process

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Observations
  • Small and rural hospitals have the greatest risk
    of non-compliance
  • The lack of funds to purchase the necessary
    software and support services
  • Dependency on paper records and totally manual
    gathering quality measures data
  • Lack of budgetary allocations to provide the
    staff necessary to perform analysis, recognize
    weaknesses and create recovery plans
  • The lack of built-in edits of reported data
  • Dependency on CMS data results which are no
    longer actionable because of their age.

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The Reports
  • Real-time actionable data
  • Brainless, seamless and effortless

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  • Jasons Sanders, Reimbursement and Budget Analyst

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The Next Level
Put on your big girl panties and deal with it.
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Implementation
CMS
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Quality as a Key Component of Finance
  • Component of reimbursement
  • Determines annual increases
  • Component of cost
  • Poor quality has a defined cost

Must measure costs relative to quality
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Internal Approaches
  • Cost Accounting / Reporting
  • Never Events and HACs
  • Lost reimbursement (net)
  • Cost of initial visit/procedure
  • Cost of corrective visit/procedure
  • Cost of increasing quality compared to the
    potential lost reimbursement

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Internal Approaches
  • Include quality as a component of productivity
  • Comparing costs not only to volume and charges
    but to quality outcomes.
  • Does quality suffer if cost (staff) is reduced?
  • Re-evaluate the value of your quality department
    now is a revenue department.

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The Next Level Quality as a Component of
Productivity
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Find New Approaches
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Measurement / Comparison Internally
  • Staffing has usually been negotiated in budget
    based on history and demands rather than
    justified like all other expenses.
  • There is little measurement of how staffing
    relates to outcomes in order to require
    accountability
  • No predefined standards for data or calculations
  • Difficult to measure and evaluate because of
    variance in staffing needs for sicker patients
    Severity is a determinate of staffing intensity

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Challenge New Ways of Thinking
  • Comparing to other distinct units
  • Comparing to other facilities

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Mnhrs/APD
Acute 1 150
Acute 2 160
Acute 2 175
Oncology 260
ICU 330
Average 154
Acuity
Quality
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Neutralize Severity
  • Medicare Case Mix index
  • Average of DRG weights
  • Used to apply cost of care based on severity of
    the average patient based on extensive national
    reviews
  • Adjusting by CMI can convert the denominator to a
    relative amount for both acute and specialties

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Mnhrs per Patient Day CMI Mnhrs Per Adjusted Patient Day
Acute 1 150 0.96 156
Acute 2 160 1.02 157
Acute 2 175 1.15 152
Oncology 260 1.60 163
ICU 330 2.10 157
Average 154 156
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Net of Severity
No correlation Investigate productivity and
process
Mnhrs per APD CMI Adjusted Mnhrs Per Apd
Acute 1 150 0.96 156
Acute 2 160 1.02 156
Acute 2 175 1.15 152
Oncology 260 1.60 162
ICU 330 2.10 157
Average 154 156
There may be a correlation Investigate staffing
level
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Compare
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Use of results
  • Identify productive and less-productive
    departments
  • Review strengths and weaknesses of each notable
    variances to identify focus areas to either
    reduce cost by improved productivity and/or
    improve quality outcomes
  • Highlight focus areas for monitoring and
    evaluation through use of value stream mapping
    (LEAN, Toyota, Six Sigma) or other
    technology/functional approaches
  • Maintain routine measurements to identify
    successes, failures and new potential improvements

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Lean and Related Trends
  • Waste Reduction Targets (National Priorities
    Partnership)
  • Inappropriate medication use
  • Unnecessary laboratory tests
  • Unwarranted maternity care interventions
  • Unwarranted diagnostic procedures
  • Unwarranted procedures

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Waste Reduction Targets (National Priorities
Partnership)
  • Preventable emergency department
  • visits and hospitalizations
  • Inappropriate non-palliative services
  • at end of life
  • Potentially harmful preventive
  • services with no benefit

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CMS Don Berwick
Per Capita Cost
Population Health
Experience of Care
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Any questions before we close?
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Closing
  • The time is now 2011 quality results will be a
    component of the first VBP adjustments in 2013
  • Tracking real-time is imperative to intercept
    problems and reduce the length of impact
  • Quality is now a component of productivity
  • New quality focused approach to cost accounting
  • Quality Department as a financial function
  • Quality Department as a revenue department

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Closing
  • Beware of contractions
  • Preventative medicine CPT reimbursement
  • Defensive medicine VBP waste reduction
  • Tort reform Defensive medicine
  • Bundling Starke law
  • Outcomes - ALOS
  • Readmissions ALOS
  • This is just the beginning of a new era.

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Thank you.
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Value Based Purchasing Combining Cost and
Quality Michael T. Rapp, MD, JD, FACEPDirector,
Quality Measurement and Health Assessment
GroupOffice of Clinical Standards Quality
Centers for Medicare Medicaid Services
http//www.ncvhs.hhs.gov/091014p4.pdf
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Hospital Acquired Conditions Projected Costs
savings Savings estimates for the next 5 fiscal
years are shown below Year Savings (in
millions) FY 2009 ................................
...21 FY 2010 ...................................
. 21 FY 2011 ....................................
21 FY 2012 ....................................
22 FY 2013 .................................... 22
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Distribution of AMI Readmission by HRR
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Distribution of HF Readmission by HRR 4
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Distribution of Pneumonia Readmission by HRR 43
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CMS ultimate goal is to shift the curve
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