March 8, 2011

Donald Berwick, MD
Centers for Medicare & Medicaid Services
Department of Health and Human Services
P.O. Box 8010
Baltimore, MD 21244-8010

File Code: CMS-3239-P

Re: Proposed Rule on the Hospital Inpatient Value-Based Purchasing Program

Dear Dr. Berwick:

The Healthcare Financial Management Association (HFMA), on behalf of its 35,000 members, appreciates this opportunity to comment on the Center for Medicare and Medicaid Services' (CMS) proposed rule on the hospital inpatient value-based purchasing program, published in the January 13, 2011, Federal Register.

HFMA appreciates CMS's efforts to promulgate value-based purchasing regulations associated with Section 3001 of the Patient Protection and Affordable Care Act and Health Care Education Reconciliation Act of 2010.  We recognize CMS's well-intentioned approach to the hospital inpatient value-based purchasing proposed rule.  However, we are concerned with specific components of the proposed rule as it is currently written.

Below, please find our detailed comments related to the components of the hospital inpatient value-based purchasing rule that concern our members.

Hospital Acquired Conditions (HACs):  CMS proposes to include eight measures related to hospital acquired conditions in federal fiscal year 2014 (FFY14).  This inclusion in the final rule would be duplicative and result in significant overlap with current and impending rules.  Providers are already subject to nonpayment for HACs under the existing inpatient prospective payment system and in FFY15 will be subject to an additional one percent reduction in operating payments if their volume of HACs is in the fourth quartile nationally.

HCAHPS Weighting:  The patient experience or HCAHPS domain comprises 30 percent of the overall VBP score.  While providers should focus on improving patient satisfaction, experience has shown that little can be done to satisfy a patient once they reach a certain level of acuity.  Therefore, CMS should either reduce the overall weighting of the patient experience domain or develop a mechanism to risk adjust the scores so as not to penalize hospitals that provide care to patients with a higher acuity level. Additionally, due to observed differences in scores at a regional level, we recommend normalizing to remove any regional effects.

Minimum Number of Cases:  The proposed rule establishes 10 cases as the minimum number necessary to calculate a score for an individual process of care measure.  This number is not consistent with the Hospital Compare website, which requires 25 cases as a minimum to calculate a process of care score.  CMS should harmonize the minimum number of cases to provide consistency in reporting and should use a minimum number of at least 25 cases.

Efficiency Metrics:  In addition to these immediate concerns, the proposed rule does not address one key item.  We believe that it is imperative that CMS collaborate with hospitals to review existing efficiency metrics and risk adjustment mechanisms before adopting the efficiency metrics that will apply in FFY14 as part of the value-based purchasing program.

The Accountable Care Act mandates that in 2014 CMS must include efficiency measures, including measures of Medicare spending per beneficiary.  Given that physicians control the majority of decisions that impact spending, 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.

HFMA looks forward to any opportunity to provide assistance or comments to support  CMS's effort to promulgate regulations for hospital inpatient value-based purchasing.  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.


Richard L. Clarke, DHA, FHFMA
President and Chief Executive Officer
Healthcare Financial Management Association

About HFMA

HFMA is the nation's leading membership organization for more than 35,000 healthcare financial management professionals. Our members are widely diverse, employed by hospitals, integrated delivery systems, managed care organizations, ambulatory and long-term care facilities, physician practices, accounting and consulting firms, and insurance companies. Members' positions include chief executive officer, chief financial officer, controller, patient accounts manager, accountant, and consultant.

HFMA is a nonpartisan professional practice organization. As part of its education, information, and professional development services, HFMA develops and promotes ethical, high-quality healthcare finance practices. HFMA works with a broad cross-section of stakeholders to improve the healthcare industry by identifying and bridging gaps in knowledge, best practices, and standards.

Publication Date: Tuesday, March 08, 2011