Apr. 30—Providers that treat low-income patients should not be penalized by federal quality standards that unfairly compare them with providers that treat mostly higher-income patients, a study commissioned by the Obama administration concluded.

Federal payment policies that reward high-quality healthcare and penalize hospitals and physicians with many low-income patients that fail to meet such quality standards require “sweeping” changes, a draft report by National Quality Forum (NQF) panel recommended, according to The New York Times. The NQF did not respond to requests for the report.

The consensus-based group, which included representatives of consumer groups, insurers, healthcare providers, and employers, said increasingly used quality measures are fundamentally flawed. That conclusion was based on the lack of any adjustments in the policies for account for more low-income patients, who are harder to treat due to lower treatment compliance and other factors.

Payment policies, the panel concluded, unintentionally worsen disparities by shifting money away from doctors and hospitals that care for “disadvantaged patients.”

The panel urged Medicare and private insurers to calculate financial rewards and penalties by adjusting for various “sociodemographic factors.”

Many provisions of the Affordable Care Act aim to improve care by tying Medicare payments to the performance of hospitals and other providers on quality measures. For instance, Medicare has begun to reduce payments to hospitals with higher-than-average readmissions.

Hospitals Support Panel’s Recommendations

Obama administration officials said adjusting the data for social or demographic factors would be equivalent to accepting a double standard, with lower expectations for the care provided to low-income patients.

Previously, the Medicare Payment Advisory Commission, which is Congress’ primary Medicare advisor, has found that lower-income patients have higher readmission rates and major teaching hospitals, which serve large numbers of indigent patients, face the highest penalties.

Among possible changes suggested by the panel were for payers to compare providers with other providers who serve similar proportions of low-income patients.

The American Hospital Association endorsed the panel’s recommendations and urged the Centers for Medicare & Medicaid Services (CMS) to quickly adopt the changes.

"A large body of evidence demonstrates that sociodemographic factors such as income and insurance status affect many patient outcomes, including readmissions and costs," Rick Pollack, executive vice president for AHA, wrote to CMS and NQF. “The current approach used to measure and report outcomes, such as CMS’s measures of mortality, readmissions and cost per beneficiary, does not include this type of analysis, and effectively assumes that any disparities in outcomes are attributable only to either how sick the patient is or to the quality of care provided by the hospital.”

Publication Date: Thursday, May 01, 2014