June 25, 2012
Centers for Medicare & Medicaid Services
Department of Health and Human Services
P.O. Box 8011
Baltimore, MD 21244-1850
File Code: CMS-1588-P
Re: Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2013 Rates; Hospitals' Resident Caps for Graduate Medical Education Payment Purposes; Quality Reporting Requirements for Specific Providers and for Ambulatory Surgical Centers
Dear Ms. Tavenner:
The Healthcare Financial Management Association (HFMA) would like to thank the Centers for Medicare & Medicaid Services (CMS) for the opportunity to comment on the 2013 Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2013 Rates; Hospitals' Resident Caps for Graduate Medical Education Payment Purposes; Quality Reporting Requirements for Specific Providers and for Ambulatory Surgical Centers (hereafter referred to as the 2013 IPPS Proposed Rule) that was published May 11, 2012 Federal Register.
HFMA is a professional organization of more than 39,000 individuals involved in various aspects of healthcare financial management. HFMA is committed to helping its members improve the management of and compliance with the numerous rules and regulations that govern the industry.
HFMA would like to commend CMS for its thorough analysis and discussion of the myriad of Medicare hospital reimbursement decisions addressed in the 2013 IPPS Proposed Rule. Our members have significant concerns regarding the proposals related to the MS-DRG documentation and coding adjustment, implementation of the readmissions reduction and value-based reimbursement program, and changes to the Inpatient Quality Reporting Program (IQR).
Documentation and Coding Adjustments
A growing body of health economic research calls into question both CMS's method of measuring the impact of alleged changes in documentation and coding (DCI) practices and the impact changes in DCI have on payments compared to the continuation of prevailing trends in case-mix prior to the implementation of MS-DRGs. See links to prior comment letters below from the American Hospital Association, Federation of American Hospitals, and Association of American Medical Colleges highlighting the findings of this work.
The proposed rule includes negative coding adjustments related to multiple years for all hospital types (IPPS, MDH, and SCH). MedPAC estimates Medicare margins will decline from -4.5 percent in 2010 to -7 percent in 2012(1) as a direct result of these cuts, placing additional, unwarranted financial stress on hospitals. Based on the findings of the studies summarized in Appendix I, HFMA strongly urges CMS to:
- Effective immediately, cease additional recoupments for alleged increases in DCI until a more accurate methodology can be developed and deployed
- Develop and deploy a methodology for determining the impact of changes in DCI that adequately separates true case mix change from documentation and coding
- Use this more accurate methodology to both examine the impact of DCI changes moving forward and apply the calculation to prior years (if CMS determines that it has over-recouped payments from hospitals as a result of a flawed methodology, provider reimbursement should be adjusted for the error)
Implementation of Readmissions Reduction Program
HFMA has expressed significant concerns related to the implementation of the readmissions reduction program (RRP) on multiple occasions (see links to these comment letters below) and is disappointed that the proposed rule fails to address these items.
We are specifically concerned about the dearth of socioeconomic variables included in the risk-adjustment mechanism, given the role that these factors play in a patient's likelihood of readmission. We appreciate CMS's attempt to analyze the impact of socioeconomic status (presented on pages 366-367) on the penalties meted out by the RRP; however, we believe that using DSH status is insufficient for this type of analysis. While status as a DSH eligible hospital is one indicator of the socioeconomic conditions in a hospital's catchment area, it is not uncommon for hospitals in areas with relatively affluent Medicare beneficiaries to qualify for DSH reimbursement due to the high volume of labor and delivery services provided to non-resident aliens.
Prior to implementing the RRP HFMA strongly recommends CMS conduct a thorough analysis of the role socioeconomic factors play in Medicare readmissions. We believe that this analysis should be conducted at the claims level for readmitted Medicare patients and match their zip codes to existing poverty data to provide an accurate understanding of the role socioeconomic conditions, which are beyond a hospital's control, play in readmissions.
Further, HFMA continues to recommend that CMS include SSI and other similar socioeconomic indicators (e.g., presence of Medicaid as a secondary payer) to improve risk adjustment at the claims level. If CMS does not believe that it can improve the risk-adjustment mechanism without endorsement from the NQF, HFMA recommends that CMS delay the implementation of the readmissions reduction program until NQF develops readmissions measures that fully account for socioeconomic drivers.
Analysis(2) has shown that safety net hospitals are more likely to have higher readmission rates for the conditions included in CMS's readmissions policy. We continue to believe that refining the risk-adjustment mechanism is necessary to ensure a level playing field for all providers while protecting safety net hospitals and their communities from the unintended and counter-productive consequences of an incomplete risk-adjustment mechanism. For these facilities inpatient Medicare payments are a larger than average component of their revenue. Any reduction in Medicare payment related to an incomplete risk adjustment will have both direct and indirect consequences. As a direct consequence, it will limit providers' ability to invest in programs to reduce unnecessary readmissions, and the socio-economic factors that cause them, further harming Medicare beneficiaries. Indirectly, it will reduce employment and increase the ranks of uninsured in these communities as safety net hospitals will likely respond to additional financial pressure by reducing staffing levels.
Value-Based Reimbursement Program
In prior comment letters (see links to HFMA comment letters below), HFMA has expressed concern over the HCHAPs and efficiency components of the Value Based Reimbursement Program (VBP). As stated in previous comment letters we remain strongly concerned that the currently proposed VBP program exacerbates existing misalignments amongst the various provider types to the detriment of some providers.
HCHAPS Weighting: We continue to believe the HCHAPS domain is over-weighted as it comprises 30% of the overall VBP score in 2013, 2014, and 2015. While providers should focus on improving patient satisfaction, anecdotal evidence has shown significant variation in scores due to differences in acuity level and region of the country.
HFMA strongly recommends that CMS conduct a patient level study to better understand the relationship between HCHAPS scores and factors beyond a hospital's control such as patient severity and region. Otherwise, CMS runs the risk of inappropriately penalizing facilities that provide higher acuity services to a sicker patient population or disadvantaging hospitals in one region over another. Further, we believe that CMS should significantly reduce the weighting of the HCHAPS domain until the relationship between HCHAPs scores and differences in geography and variances in acuity are better understood.
Efficiency Metric: CMS proposes to include an efficiency metric in the 2015 VBP. The metric is defined as "inclusive of all Part A and Part B payments from 3 days prior to a subsection (d) hospital admission through 30 days post discharge with certain exclusions. It is risk adjusted for age and severity of illness, and the included payments are standardized to remove differences attributable to geographic payment adjustments and other payment factors."
As discussed in previous comment letters, physicians control the majority of decisions that impact spending across an episode of care. Therefore, it will be difficult to isolate and ascribe responsibility for a beneficiary's overall spending to a given hospital. CMS needs to work with the hospital community to develop and implement efficiency metrics sensitive enough to measure spending that hospitals directly influence. Any metric that does not achieve this goal will ultimately reflect variations within physician practices, not underlying hospital cost efficiency. This will only penalize hospitals for the clinical preferences of community physicians, a factor that is beyond the control of hospitals.
HFMA strongly recommends that CMS take the following steps to ensure that hospitals aren't inappropriately penalized for factors beyond their control related to the overall efficiency of patient care.
- Delay implementation of the efficiency metric until after a corresponding metric is developed and included in the physician "Value Modifier" that is currently under development. Hospitals should not be expected to bear the brunt of penalties related to physician preferences. Implementing a penalty on only one side of the equation will only further misalign the financial incentives among physicians and hospitals and fail to improve the quality of care for Medicare beneficiaries.
- Work with hospitals to refine the efficiency metric. Limiting the measurement to only conditions related to the index admission would be a significant improvement over all spending over a 30 period and would be a more accurate proxy for factors within a hospital's control.
- Provide hospitals with the underlying claims data for patients included in the efficiency metric. This will allow hospitals to work with community physicians and other care providers to make care delivery more efficient.
Inpatient Quality Reporting Program
HFMA has significant concerns related to the proposed additions of Elective Delivery Prior to 39 Completed Weeks Gestation (NQF #0469) measure and the Hospital-Wide Readmission (tentative NQF #1789, measure to the Inpatient Quality Reporting Program (IQR) in 2013, with the intent to include these measures in the value-based purchasing program in 2015.
Proposed New Chart-Abstracted Measure: Elective Delivery Prior to 39 Completed Weeks Gestation: Percentage of Babies Electively Delivered Prior to 39 Completed Weeks Gestation (NQF #0469): Medicare pays for approximately 14,000 of the 4.1 million(3) births that occur annually in the United States. Based on the lack of Medicare births nationally, it's reasonable to question how many hospitals would have sufficient volume to even report this measure. Further, as of today there is no corresponding mandated metric that CMS collects for all obstetricians and gynecologists. Given that pre-term elective deliveries are driven by physician order, often for the convenience of the physician and/or the patient, we believe it is inappropriate to hold hospitals accountable for NQF #0469 until a measure is implemented that aligns incentives between physicians and hospitals. Therefore, HFMA strongly believes NQF #0469 should not be included in the Medicare IQR in 2013.
However, HFMA agrees with CMS that sufficient evidence exists linking pre-term elective deliveries to neonatal mortality and morbidity as well as increased risk of complications for the mother as a result of elective induction. HFMA encourages CMS to:
- Work with NQF and the American College of Obstetricians and Gynecologists to develop a corresponding measure of pre-term elective deliveries for physicians and
- Once a corresponding metric is developed, collaborate with state Medicaid agencies and commercial payers to implement NQF #0469 and the physician equivalent in populations where they are appropriate.
Hospital-Wide Readmission (tentative NQF #1789): HFMA believes that including the HWR in the IQR opens up the possibility that the same readmission will be double-counted against the hospital. CMS staff verified that the HWR will not be adjusted to remove other measured readmissions (HF, PN, AMI, THA (proposed) and TKA (proposed)). Therefore, in 2013 a HF patient readmitted for dehydration from a SNF would also appear in the HWR measure in the IQR and thus be double-counted. While CMS staff state that the HWR hasn't been proposed for the value-based purchasing program, it's safe to assume that it will eventually be included once sufficient data collection requirements have been satisfied. HFMA strongly recommends that CMS eliminate the potential for a hospital to face "double jeopardy" and either remove the condition-specific readmission measures from the HWR or simplify the readmission measurement program by eliminating all other measured readmissions in favor of the HWR.
As discussed in previous comment letters, research shows patients who receive timely physician follow-up care post discharge are significantly less likely to be readmitted.(4,5) However, in many instances, beneficiaries do not receive follow-up care in the recommended time frame. There are many reasons for this, which include-but are not limited to-socioeconomic issues, appointment availability, and patient compliance.
While hospitals and the physicians they employ are working diligently to address the issues listed above, these efforts are limited in their effect by a lack of aligned incentives with community physicians. We believe altruism motivates many community physicians to participate in efforts to reduce readmissions where they can. However, given the intractable nature of the issues that contribute to readmissions, we believe altruism is insufficient to create the urgency necessary. HFMA continues to strongly recommend that CMS use all means at its disposal to align physician and hospital incentives to reduce readmissions:
- Expedite implementation of a physician value modifier and include a component that rewards physicians with low volumes of risk-adjusted readmissions (RARs) using funds withheld from physicians with high volumes of RARs.
- Work with Congress to create a bonus payment for physicians who see patients within 72 hours of discharge. Based on discussion with our members, payment comparable to a level 4 new patient visit would be sufficient to ensure prompt follow-up. Additionally, for patients unable to come to the office within 72 hours, there needs to be adequate reimbursement for a home visit, even if the patient doesn't qualify for home health services.
- Work with the OIG to create waivers from Stark, Civil Monetary Penalties, and other legal barriers to hospital gain-sharing arrangements, allowing hospitals to pay bonuses to community physicians who have successfully collaborated with the hospital to lower readmission rates.
HFMA looks forward to any opportunity to provide assistance or comments to support CMS's efforts to refine and improve the 2013 IPPS Proposed Rule. As an organization, we take pride in our long history of providing balanced, objective financial technical expertise to Congress, CMS, and advisory groups.
We are at your service to help CMS gain a balanced perspective on this complex issue. If you have additional questions, you may reach me or Richard Gundling, Vice President of HFMA's Washington, DC, office, at (202) 296-2920. The Association and I look forward to working with you.
Joseph J. Fifer, FHFMA, CPA
President and Chief Executive Officer
Healthcare Financial Management Association
The Healthcare Financial Management Association (HFMA) provides the resources healthcare organizations need to achieve sound fiscal health in order to provide excellent patient care. With more than 39,000 members, HFMA is the nation's leading membership organization of healthcare finance executives and leaders. HFMA helps its members achieve results by providing education, analysis, and guidance, and creating practical tools and solutions that optimize financial management. The organization is a respected and innovative thought leader on top trends and challenges facing the healthcare finance industry. From addressing capital access to improved patient care to technology advancement, HFMA is an indispensable resource on healthcare finance issues.
- Hernandez, A., M. Greiner, G. Fonarow, B. Hammill, P. Heidenreich, C. Yancy et al. "Relationship Between Early Physician Follow-up and 30-day Readmission among Medicare Beneficiaries Hospitalized for Heart Failure." JAMA 303(17) (2010):1716-1722
- Misky, G., H. Wald, E. Coleman. "Post-hospitalization Transitions: Examining the Effects of Timing on Primary Care Provider Follow-up." Journal of Hospital Medicine 2010; DOI 10.1002/jhm.666.
DCI related comment letters from the American Hospital Association, Federation of American Hospitals, and Association of American Medical Colleges:
HFMA Comment Letters:
Publication Date: Monday, June 25, 2012