Illinois Hospital Association

Members Login Automatically
login		   User ID:   Password: Forgot your password?
Don't have a password?

July 20, 2005

Performance Measurements and Pay for Performance

As you are all aware, there has been quite a bit of media coverage on hospital performance information in light of the Pennsylvania release of hospital infection rates and the recent New England Journal of Medicine studies on the performance improvement link to publicly reported data. On the heels of all of these reports and in response to increasing costs of the entire health care delivery system, health plans are increasingly turning toward ‘pay for performance’ approaches. Some of these approaches are well structured and designed using reliable and valid measurements; others are not.

In the following paragraphs, some of the measurements to be utilized are highlighted as well as IHA’s efforts to ensure valid and reliable measurements are available and IHA members will be aware of which measurements those are.

MEDPAC
As noted in a previous memo from IHA, the Medicare Payment Advisory Commission (MEDPAC) recommended in written reports this past spring that Medicare move swiftly to a value based purchasing (pay for performance) system utilizing a series of existing and expanding measurement sets. Specifically, MEDPAC recommended:

  • Hospital Quality Alliance and Centers for Medicare and Medicaid Services (CMS) performance measurements using clinical information for heart attack, heart failure, and pneumonia with expansion to occur for surgical infection prevention measurements and surgical care. This set of measurements will also include in 2006 the HCAHPS or patient experience survey results.
  • Agency for Healthcare Research and Quality (AHRQ) select quality and patient safety measurements using administrative or UB-level data.
  • In the MEDPAC report, there is also an assumption that the ‘present upon admission’ flag will be recorded for each appropriate patient diagnostic code. By having both the diagnostic code and the present upon admission code or flag, one will be able to differentiate those complications or infections that occurred prior to or during the hospital stay.
  • Refined DRG for risk adjusting patient cases for payment purposes. However, MEDPAC did not recommend any particular Refined DRG methodology or software. Over the past 12 to 15 years, Medicare has intermittently started and stopped working on plans to incorporate Refined DRG (RDRG) into the payment system as they need to meet budget schedules and are concerned that RDRG could seriously undermine the federal Medicare budget similar to the early 1980’s with the introduction of the DRG system. Medicare also is concerned about making higher payments for complications that were preventable but occurred during the patient stay.
  • Leapfrog information on organizational structure to support patient safety. It is expected that some structural level of measurements will be pulled from the Leapfrog initiative and incorporated into the pay for performance initiative.

While Medicare is currently focused on inpatient care settings for disease conditions prevalent among the adult population; Medicare will expand to include behavioral health and outpatient care measurements. CMS and AHRQ are also working on pediatric measurements that could be used with Medicaid and commercial covered patients.

Many of the commercial health plan and employer ‘pay for performance’ approaches principally include and focus on the same measurement sets – although often times using different combinations of measurements.

IHA Support
IHA is actively engaged in discussions with state, federal, and private organizations on the measurements. IHA serves on several existing state and federal committees and panels and was recently appointed to an expert panel on AHRQ quality and patient safety measurements and asked to serve on the National Center for Health Statistics (NCHS) and American Health Information Management Association (AHIMA) group on developing the definitions for the ‘present upon admission’ code to be used with diagnostic codes.

IHA continues to provide up to date information on performance measurements at state, federal, and private levels so that IHA members are positioned to the changing environment. During August, IHA will update the list previously provided on clinical performance measurements as there will be major announcements on July 29th on the major expansion of Surgical Infection Prevention measurements to Surgical Care Improvement Project measurements which are a major expansion in hospital reported information. In September, IHA will be present and participate in the AHRQ meeting on Quality and Patient Safety measurements where AHRQ will unveil their first set of pediatric measurements and plans for further adjustments to the existing quality and patient safety measurements.

Additionally, IHA will continue the efforts of providing current and up-to-date measurement information and results through the IHA Comparative Performance Initiative, COMPdata CORE and HQA Performance Measurements, and AHRQ Quality and Patient Safety Indicators.

Please let us know if we can be of further assistance to you as we all work together on performance improvement.

Staff Contact: Pat Merryweather: (630) 276-5590 or Tim Philipp: (630) 276-5682