As CMS’ value-based purchasing program enters its second year, emergency departments are poised to influence hospital outcomes

An interview with reimbursement and coding expert Michael Granovsky, MD , FACEP

This year, more than 1,400 hospitals are seeing their Medicare reimbursements cut based on a new quality incentive program mandated by the Centers for Medicare and Medicaid Services (CMS). More than 1,200 hospitals are receiving a payment boost.

The CMS Quality Incentive Program is built on the Hospital Inpatient Quality Reporting (IQR) measure-reporting infrastructure, with the clinical process of care measures coming from the Hospital Inpatient Prospective Payment Systems final rule. Several of the measures under CMS’s Hospital Value-Based Purchasing program (HVBP) are emergency department–specific, uniquely positioning EDs to influence whether hospitals come out ahead or fall behind, said Michael Granovsky, MD, FACEP, president of coding for LogixHealth and chair of ACEP’s Coding and Nomenclature Commitee.

For several years, CMS has had stiff penalties associated with not fully reporting on Hospital Outpatient Prospective Payment System quality measures. For 2014, CMS will apply a 2 percent penalty to hospitals not reporting outpatient quality measures, which directly reduces the hospital’s conversion factor. CMS, consistent with an escalating focus on quality, added penalties to the Value-Based Payment program as well. The mandatory program began last year, when diagnosis-related group (DRG) payments to all participating acute care hospitals were cut by 1 percent. For the 2014 reimbursement year, which began Oct. 1, 2013, and extends through Sept. 30, 2014, the cuts grew to 1.25 percent. By 2017, they will top out at 2 percent per Medicare patient.

The money goes into a pool intended to incentivize hospitals to perform better than the median or show significant improvement relative to their own baseline year, whichever score is higher. Hospitals demonstrating high performance or improvement either break even or receive more money than they put in, according to an adjusted payment calculation. Those that perform worse than the middle 50 percent of hospitals or fail to improve will sustain a net loss in revenue.

This year, reimbursement was based on hospital performance across more than a dozen clinical process of care measures; the results of patient-satisfaction surveys; and patient outcomes, such as inpatient mortality rates for heart attack, heart failure, and pneumonia.

Four of the 13 clinical process of care measures include ED-specific patient care performance: fibrinolytic therapy received within 30 minutes of patient arrival at the hospital (AMI-7a), primary percutaneous coronary intervention received within 90 minutes of hospital arrival (AMI-8a), blood culture testing before initial antibiotic received in the ED (which is being phased out), and initial antibiotic selection for community-acquired pneumonia in immunocompetent patients (PN-6).