CMS VALUE-BASED PURCHASING-Will your state be affected?
CMS, after several false starts, has unveiled its proposed pilot program on value-based purchasing (VBP) in the proposed rule. The VBP model follows a path previously traveled with hospitals, but with some significant variation. Generally, a VBP program establishes a financial bonus pool funded by payment reductions to the provider group involved. Performance and outcome standards are established to determine which providers receive bonus payments. Those that do not meet the standards are left with lower payment revenues. Those that outperform the standards receive financial rewards.
CMS has proposed to move forward with a VBP pilot program in 2016. CMS proposes to use 2015 as the baseline year for performance with 2016 as the first year for performance measurement. In 2018, HHAs will see the payment consequences of their 2016 performance. NAHC has supported the use of VBP reimbursement provided it is based on reliable, risk adjusted measures and does not pose an access or quality of care problem for beneficiaries. As usual, the devil is in the details of the VBP model.
The VBP model put forward by CMS follows these general guidelines. However, the detailed part of the VBP model deserves special attention. First, the CMS model would reduce or increase Medicare payments in a range of 5-8% over the life of the seven year pilot (ending in 2022) with the first payment years at 5% (2018 and 2019). This is in contrast with the current hospital VBP which puts at risk 1.25% rising gradually to 2.0%. In 2014 comments, NAHC strongly objected to the suggested 5-8% as putting continued access to care in jeopardy. While the pilot program would be budget neutral, CMS projects that 10% of providers (with the exception of small volume providers in two states) will receive payment reductions ranging from 2.26 to 3.33%. As such, while 5% of payment may be at risk in the first years, the payment impact is expected to be less based on an evaluation of the pilot design on prior year’s data.
The VBP measures would be based on both achievement and improvement in quality outcomes. CMS proposes to use 10 process measures, 15 outcome measures, and four new measures coming from OASIS, Medicare claims data, and HHCAHPS.
HHAs that reach a minimal threshold level in quality performance would receive the incentive bonus payments with the amount determined by the level of quality above the threshold. Performance and bonus payment determinations would be made based on an HHA’s performance in comparison to other HHAs in the state. CMS proposes to compare the performance based on HHA size, separating smaller-volume HHAs from larger-volume HHAs.
CMS proposes to institute the VBP program in nine states. It would be a mandatory program in all the affected states. The proposed states are: Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska, and Tennessee. CMS says it selected these states randomly from the 10 HHS regions. While CMS says that the final states in the pilot may change, there is good reason to question the failure to include such bellwether states as California, Texas, Michigan, Illinois, and New York. The pilot is also deficient in its failure to include more rural states such as Montana, Oregon, Utah, Arkansas, and Mississippi.
The VBP model proposes that CMS would take away 5-8% of all payments from the Medicare participating providers in the nine selected states over the seven-year life of the pilot, some of which would be returned to high-performing providers.