For the most part, CMS's FY 2018 Inpatient Prospective Payment System (IPPS) proposed rule includes nothing unexpected for CV leaders. However, it does address one highly debated topic—socioeconomic status (SES) as it relates to pay-for-performance programs.
Some critics of the these programs have taken issue with their failure to account for SES, out of a concern that providers who serve low-SES populations with significant health risk factors may incur penalties at a disproportionate rate.
This is of particular concern for cardiovascular service lines, as there is a strong link between cardiovascular disease and social determinants. Additionally, cardiovascular programs have an increasing amount of their business tied to cross-continuum care through pay-for-performance programs such as the Hospital Readmissions Reduction Program (HRRP), in which reimbursement dollars are tied to what happens to patients after they leave the hospital.
Acknowledging the link between socioeconomic status and CV health
According to the American Heart Association, a wide range of cardiovascular quality metrics are impacted by SES, and in the shift to value-based care, cardiovascular service lines will be increasingly accountable for ensuring quality across the care continuum.
Health and Human Services (HHS) acknowledged concerns around SES and quality outcomes in a December 2016 report, which noted that safety-net providers face substantially greater penalties in CMS's value-based payment programs than non-safety-net providers and attributed this disparity to social risk factors such as "dual eligibility, low income, race, ethnicity, and rural area residency." The report held that beneficiaries with social risk factors have poorer quality outcomes and recommended that CMS adjust its programs to "reduce disparities and avoid inappropriately penalizing providers that serve beneficiaries with social risk factors."
That same month, Congress passed the 21st Century Cures Act, which requires CMS to incorporate patient SES in calculating readmissions penalties under the HRRP for FY 2019.
How will SES affect the Hospital Readmission Reduction Program?
As the HRRP currently stands, providers receive a reduction in DRG payment based on readmissions performance for specified conditions. Providers are compared nationally, irrespective of the proportion of beneficiaries they serve with heightened risk factors. In order to comply with the 21st Century Cures Act, CMS in the IPPS proposed rule suggested comparing providers relative to peers with similar proportions of dual-eligibility patients. CMS selected dual-eligibility as a proxy for incorporating SES into readmissions evaluations because HHS's initial report found dual-eligibility to be "the most powerful predictor of poor outcomes."
As it is currently written, the proposal divides providers into five categories based on the proportion of dual-eligible inpatient stays, and would compare providers against the median readmissions performance of those in their category. It is important to note that the proposed rule also says CMS is considering expanding SES adjustments to the Value-Based Purchasing (VBP) Program more broadly as well as Inpatient Quality Reporting metrics.
What does this mean for cardiovascular services lines?
If finalized, providers would be compared only against those with similar proportions of dual eligibility patients. But, that is no reason to step off the gas when it comes to preventing readmissions for CABG, HF, AMI, and COPD. The new methodology may decrease payment reduction for some cardiovascular services lines, but trends toward value-based care would persist.
To learn more details about what the FY 2018 IPPS proposed rule would mean for service lines, check out Eric Fontana's blog post on the topic.