8 Points on Dealing With Medicare Value-Based Purchasing

CMS' new Value-Based Purchasing program will move a small but significant portion of hospital payments to a new pay-for performance system that begins in October 2012, according to John T. Kelly, MD, managing director of Huron Healthcare, part of Huron Consulting Group in Chicago. "Hospitals will need to start preparing now to perform well under this new system," he advises.

Hospitals have already been reporting 17 process-of-care measures and eight patient satisfaction measures that will be measured in the new payment program. Now, however, a hospital will be rewarded or penalized based on how its measures compare to those of other hospitals.

Hospitals with lower scores on these measures will see their Medicare payments reduced by 1 percent starting in fiscal year 2013 and that reduction will slowly rise to 2 percent in FY 2017. Meanwhile, incentive payments will be paid to high-performing hospitals out of those reductions.

Here Dr. Kelly makes eight points on how hospitals can prepare for value-based purchasing.

1. Start preparing now. "In view of the timetable, hospitals need to recognize there is a certain level of urgency here," Dr. Kelly says. This year, CMS will start using the information hospitals report to create a benchmark from which to measure improvement for each hospital. Process-of-care involves comparatively simple measures for high-cost conditions such as whether aspirin was provided for patients with acute myocardial infarctions.

2. Create a steering committee. Involve senior management in the process to make sure the program has the resources it needs. Establish a steering committee and define the program's guiding principles. Include clinical information management representatives who can help with data. The committee should establish objectives, priorities and a timetable. Determine accountabilities, roles and responsibilities. "This involves identifying who is responsible for getting things done," Dr. Kelly says.

3. Monitor performance on VBP metrics. Compare performance on each metric with nationwide benchmarks. Performance relative to the benchmark will indicate whether the hospital estimate might initially gain or lose funding. The benchmarks, however, are "a moving target," Dr. Kelly says. Hospitals are expected to improve compliance, meaning that an above-average hospital that did not improve could fall to below average and lose money. "Hospitals will constantly have to get better," he says.  

4. Focus on low-performing metrics. The next step is to focus on measurements where the hospital is lagging. Establish project teams made up of physicians, nurses and other clinicians in that area to develop ways to improve performance.

5. Select best practices. The project team can base its strategy on best practices recommended by organizations such as the Agency for Healthcare Research and Quality. Identify gaps where the organization is not following best practices.

6. Get very specific. When measurements require taking action within a certain time frame, such as giving aspirin to heart attack patients within 30 minutes, map out steps in the process to make sure the deadline can be met. "Ask how this can be done within the time frame prescribed," Dr. Kelly says. In addition, identify barriers to best practices.

6. Create implementation plan. Develop policies, guidelines, clinical pathways, order sets, metrics and reports. Provide adequate staff, time and other resources to support the plan. For example, put a checklist on the patient's chart to help guide nurses. The plan should promote alignment, teamwork and collaboration. Communicate information about the plan to hospital staff. And establish incentives for staff to achieve your objectives.

7. Dedicate staff to carry out plan. Consider establishing a project management office that is dedicated to helping clinical staff implement process-of-care and other quality improvements. "Process-of-care may just be the tip of the iceberg," Dr. Kelly says. "There are other quality-related issues that could be focused on." The office may involve just one staff member at a small hospital or a team at a larger hospital.

8. Monitor results frequently. Disseminate results to key stakeholders and update and modify the plan as necessary. Also, develop and implement a plan to assure that improvements are sustained.

Learn more about Huron Consulting.

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