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GAO: Hospitals with low quality scores still got federal bonuses


The Government Accountability Office reports that while the Feds’ value-based purchasing program was created to financially reward hospitals that provide high-quality care at a lower cost, some hospitals with low quality scores still received bonuses because they had high efficiency scores.

Thus the GAO questions the methodology that the Centers for Medicare & Medicaid Services uses to determine bonuses and penalties.

The report’s writers found, perhaps not unexpectedly, that “safety-net hospitals,” which have a high-proportion of low-income patients, generally scored lower in quality compared to participating hospitals in general.  However, small and/or rural urban hospitals with 100 or fewer acute-care beds scored higher on efficiency compared to hospitals in general.

Small hospitals were more likely to get a bonus compared to participating hospitals in general but safety-net hospitals were more likely to be financially penalized.

To ensure that lower-quality hospitals don’t receive bonuses in the future, the GAO recommended that, among other things, CMS revise its methodology for calculating  total performance scores.

To read the GAO report, please hit this link.

To read a FierceHealthcare story on this, please hit this link.


Should standards be lowered for safety-net hospitals?


The federal government sometimes withholds money from safety-net hospitals because they fail to meet certain standards.

A piece in asks whether those standards should, at least in some cases, be lowered.

Penalties “handed down by CMS are part of the Affordable Care Act {and} are meant to motivate hospitals to correct procedures so as to avoid patient safety violations. But the problem with these penalties, some health policy experts say, is that they don’t take into account the particular challenges that individual hospitals face.”

“Most of the penalized hospitals take care of the poorest and sickest,” Ashish Jha,  M.D., a  Harvard professor who focuses on patient safety, told the news service.

“Jha and others argue that CMS should add a risk adjustment factor. Until then, safety-net and academic-centered hospitals {with the most challenging patients} will continue to get slapped with the most penalties.”

“Adding to the hospitals’ exasperation is the fact that there is little information about whether the penalties have actually improved health outcomes.”

To read the piece, please hit this link.


A better way for handling readmissions penalties for safety-net hospitals

The recently enacted Cures Act has what sounds like a better way for dealing with hospital-readmission penalties for safety-net hospitals..

A blog entry in Health Affairs notes: “The Hospital Readmissions Reduction Program (HRRP), authorized by the Affordable Care Act, aims to improve care and outcomes for patients by assessing hospitals’ risk-standardized readmission rates. Hospitals that do not meet the readmission standard receive a penalty of up to 3 percent of their Medicare payments. Before the program’s inception, hospitals and academics raised concerns that readmissions penalties would have disproportionate impact on safety-net hospitals and might lead to worsening disparities. And, in fact, studies have shown that safety-net hospitals were more likely to be penalized than non-safety-net hospitals in the first years of the program.”

But, the article says, the Cures Act “changes this by instructing HHS to set different penalty thresholds for hospitals, based on the portion of Medicare-Medicaid dual eligible patients that are served by a hospital. What is critical to note is that this law—in contrast to prior proposals, which argued for changes to the readmission measures—directly mitigates the impact of penalties on safety-net hospitals.”

To read the Health Affairs piece, please hit this link.

In stout defense of CMS’s hospital rating system

Ron Shinkman, the editor of FierceHealthcare, argues that despite the complaints of many hospital executives, the Centers for Medicare & Medicaid Services should be commended for coming out with its star system for rating hospital quality.

He writes, among other things that:

“One of the hospital sector’s arguments for suppressing the data: Safety-net hospitals tend to fare more poorly in the CMS ratings. Given that the poor usually wind up with inferior services in just about every walk of life, that the healthcare they receive is more spotty shouldn’t be a surprise.

“The solution is simple: Assume that patients are going to read your {online} ratings on safety. That means up your game, involve your staff in more training, and isolate and address potential flaws in care delivery.

“It may be tough going for a while, but the end result will be fewer errors, unnecessary deaths and injuries. And those healthier patients will spell healthier margins.”

To read Mr. Shinkman’s entire essay, please hit this link.

Mo. hospitals focus on patient poverty in CMS readmissions penalties

revolving door



For Kaiser Health News

Christian Hospital says its costly difference of opinion with Medicare hinges on how to count the large number of poor people that the St. Louis hospital treats.

Medicare penalizes hospitals that readmit too many patients within 30 days of discharge, and Christian expects to lose almost $600,000 in reimbursements this year, hospital officials said. Christian is one of 14 hospitals in the BJC HealthCare System.

Steven Lipstein, chief executive of BJC, which includes Barnes-Jewish Hospital in St. Louis, said Medicare doesn’t play fair because its formula for setting penalties does not factor in patients with socioeconomic disadvantages — low-income, poor health habits and chronic illnesses for instance — that contribute to repeated hospitalizations.

If Medicare did that, Christian’s penalty would have been $140,000, Lipstein said.

As every hospital executive knows, half a million dollars pays for “a whole lot of nurses.”

In total, hospitals around the country lost $420 million last year under Medicare’s Hospital Readmissions Reduction Program, an initiative of the federal health law that seeks to push hospitals to deliver better patient care.

Since the program began in 2012, “recent trends in readmissions suggest that (it) is having the desired impact,” Health Affairs reported in January.

Hospitals have lobbied Congress and Medicare to change the rules and gained some ground May 18 when Rep. Patrick Tiberi, R-Ohio, introduced a bill in the House to adjust Medicare’s program to account for socioeconomic status. The bill was co-sponsored by Rep. Jim McDermott,  D.-Wash.

Meanwhile, the Missouri Hospital Association is trying to pull public opinion behind it.

This year, the association overhauled its consumer Web site, Focus On Hospitals, to include not only the federal readmissions data, but also each member’s readmissions statistics, adjusted for patients’ Medicaid status and neighborhood poverty rates.

The federal government already adjusts its readmissions data for age, past medical history and other diseases or conditions, and that’s public on Medicare’s Hospital Compare Web site.

The association explains its adjustment methodology in an article on the site. “There is emerging national research that suggest poverty and other community factors increase the likelihood a patient will have an unplanned admission to the hospital within 30 days of discharge,” it states.

The hospital group’s alternative data — Lipstein’s source for how Christian could have reduced its 2015 penalty — comes from a study it commissioned. One finding: Missouri hospitals’ readmissions rates improved by 43 to 88 percent when patients’ poverty levels were considered.

“The question is, has [readjustment] been done in a just and fair way,” Lipstein said. The Missouri Hospital Association “has provided methodology that suggests what the Feds are doing is unfair.”

The controversy over penalties is likely to grow beyond the readmissions question. Federal health officials have announced that they want to shift from paying doctors and hospitals based on the services they provide and move toward a value-based system that encourages a better quality of care and better outcomes while controlling costs.

Medicare bases penalties on readmissions on the care of Medicare patients who were originally hospitalized for one of these five conditions — heart attacks, heart failure, pneumonia, chronic lung problems and elective hip or knee replacements.

This year, Medicare penalized almost half of all hospitals — 2,592 to be exact — for excessive readmissions. More than 500 were fined 1 percent of their Medicare payments, or more, for the fiscal year that will end Sept. 30.

Still, the system harms so-called safety-net hospitals most, said Herb Kuhn, the Missouri Hospital Association’s president.

“Hospitals in difficult neighborhoods are getting worse scores, and those in affluent [ones] are getting better. It’s time to adjust [rates] for the disease of poverty,” he said.

Kuhn’s experience makes him an influential voice on health-policy issues. He was deputy administrator of the Centers for Medicare & Medicaid Services from 2006 to 2009 and before that, director of the agency’s Center for Medicare Management. In April, Kuhn completed a three-year term on the Medicare Payment Advisory Commission, which advises Congress.

The commission proposed an alternative to Medicare’s readmission penalties last year. Others are also studying modifications.

The Centers for Medicare & Medicaid Services has taken a cautious stance, but last year CMS announced it is working with the National Quality Forum, a nonprofit group whose research influences CMS’s quality metrics, on a trial to test socioeconomic risk adjustment.

But Leah Binder, CEO of the Leapfrog Group, a nonprofit patient safety group, says Medicare’s readmission penalties have pushed hospitals to improve care and adjusting the data for patients’ poverty levels could deter them.

“Hospitals are paid a lot of money. I think they can find a way to handle their readmissions, the way they should have been handling them all along,” Binder said.

Tough slog against heart-failure readmissions


Despite a push by the Centers for Medicare & Medicaid Services, private insurers and hospitals themselves against readmissions of people with heart failure, research indicates  that few have achieved  much of a reduction.

Research also shows that safety-net hospitals and others with largely low-income patient populations are at particular risk for heart-failure readmissions; patients from lower-income neighborhoods were nearly 17 percent more likely to be readmitted within six months of discharge.

Yet again, we’re seeing here the social determinants of health in a country with all too few community resources  (compared to other developed nations’) to help low-income people maintain health.

Still, there’s hope in  2013 study that found that six strategies implemented together, rather than individually, could reduce heart-failure readmissions by about 2 percent and save $100 million a year.

The six strategies in the study are:

1. More partnerships between local hospitals.

2. Giving nurses responsibility for medication reconciliation.

3. Arranging for physicians’ follow-up visits to patients before discharge.

4. More hospital partnerships with community doctors and physician groups.

5. Assigning hospital staffers to follow up on post-discharge test results.

6. Setting up a process to send all discharge papers and electronic summaries directly to patients’ primary-care physicians.

Safety-net hospital execs complain about new rating system


The Centers for Medicare and Medicaid Services is developing a hospital-quality star-rating system for the Hospital Compare Web site to provide currently available data on quality measurement to help inform healthcare decisions.The new  system will pull data from several sources, “which is different than the current system that’s based on the Hospital Consumer Assessment of Healthcare Providers and Systems Survey, according to the CMS,” reports the publication.

“America’s Essential Hospitals, which represents 250 safety net hospitals around the country, said it’s concerned about the proposed methodology for the new system released by the agency earlier this year.

“We are not confident that the measures currently available on Hospital Compare enable CMS to create a single, methodologically sound rating of all aspects of hospital quality.”

“Although the intent of CMS, in developing an overall star-ratings system, is to provide patients with a simplified assessment of how hospitals perform overall on quality, each patient’s circumstances are different and the quality measures most relevant to their care will differ.”

“Also of concern is whether the system will take into account if a hospital serves more of a high-risk population. The trade group believes the CMS methodology should incorporate risk adjustment for socio-economic factors so results reflect differences in treatment across hospitals. ”


Fla. governor pitches idea for safety-net hospitals


Florida Gov. Scott has suggested to the state’s hospital executives that they share some of their  total of $3.7 billion in profits to help the state “transition” from depending on federal funding for the state’s Low Income Pool for safety-net hospitals.

He told The Miami Herald:

“This would be similar to how large market baseball teams share revenues with small market baseball teams.”

The state has received $1 billion-$2 billion a year from the federal government to support its LIP program to aid the state’s safety-net hospitals.

The  idea comes as lawmakers stalemate  on how to fund growing healthcare costs in Florida, whose government has refused to expand Medicaid under the Affordable Care Act. That refusal has led to threatening sounds from Washington about continued LIP support.


Saving safety-net hospitals in the ACA age


This piece in HealthAffairs looks at the future of safety-net hospitals. 

“N}national, state, and local government agencies historically have provided supplemental funding to these systems to offset unreimbursed and under-reimbursed care. Under the Affordable Care Act, however, that is changing. With the expectation that most people will be insured under the new law, policy makers have planned to reduce much of this supplemental funding. In this view, safety-net systems will either become financially independent or close.”

The authors write: “Our recent study of eight safety-net hospital systems indicates that while system redesign is needed to meet the demands of the current healthcare environment, the association between strategic system redesign and operating margins is weak. Critical additional factors affecting the safety-net systems’ operating margins are their business strategies and their competitive positions in local markets.”


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