CMS tying efficiency scores to incentive payments

The Centers for Medicare & Medicaid Services has discreetly added "cost per Medicare beneficiary" scores to the Hospital Compare website for acute care hospitals--a measure the agency wants to include in the hospital value-based purchasing program.

Under its proposed inpatient prospective payment system rule, Medicare spending per-beneficiary would account for 20 percent of a hospital's value-based purchasing score, which is used to determine incentive payments starting Oct. 1, 2014, HealthLeaders Media reported.

The Medicare spending per-beneficiary measure is important "because it complements the quality and outcome measures to be used in assessing hospitals' performance," CMS spokesman Don McLeod told HealthLeaders in an email.

However, hospitals are questioning the fairness of using such cost-efficiency scores.

According to the CMS website, a lower score is better. However, a lower spending hospital may have poor outcomes because it fails to deliver all the services needed, noted HealthLeaders.

Meanwhile, the most expensive cost-per-beneficiary hospital raises doubts about the score's accuracy. "The most expensive thing I do over there (for psychiatric patients who occasionally need medical care is insert an IV," Allegiance Hospital in Midland CEO Cheryl Rayl said. "We don't do surgery. We don't deliver babies. We don't have an intensive care unit or telemetry. This doesn't make sense to me."

Tying efficiency scores to quality incentive payments may be challeging because "quality" is often a moving target, as described by Catherine Hinz, patient safety leader at HealthEast Care System in St. Paul, Minn., in a HCPro Patient Safety Monitor blog post.

"I've come to the conclusion that quality really needs to be dictated by the specific needs and desires of the patients and the families who care for them--not by the organizations, who are searching for a simple way to measure and ultimately pay for care," she wrote.

To learn more:
- read the HealthLeaders article
- here's the HCPro blog post