Ready for Value-based Purchasing? Here’s Why You Should Be

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Rhonda Oakes By Rhonda Oakes 
Regulatory Business Analyst, McKesson
Are You Ready for Value Based Purchasing

Are you still breathing a sigh of relief that your state isn’t part of the Home Health Value Based Purchasing (HHVBP) Model, which began in January 2016? While your home health organization may not be participating, you should begin looking for ways now to drive value throughout your organization.

You can find out more by downloading our new white paper, “Get your home health organization ready for value-based purchasing,” which explains in detail:

  • How the model came about
  • The quality metrics, performance metrics and payments being used
  • How metrics relate to current reporting requirements
  • Four steps your organization can take to get ready now

Tying Reimbursement to Quality Metrics

As designed, the model will test rate adjustments to Medicare Home Health Prospective Payment System (HH PPS), linking payments to quality performance against pre-set metrics. It is hoped the model will increase the quality of care and efficiency of that care. Medicare expects the HHVBP Model to save $380 million between calendar years 2018-2022 by reducing unnecessary hospitalizations and usage of skilled nursing facilities.

The model began January 1, 2016, among all Medicare-certified home health organizations in Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee and Washington. Based on performance, organizations will have their Medicare payments potentially adjusted as follows:

  • 2018, maximum payment adjustment of 3% (upward or downward)
  • 2019, maximum payment adjustment of 5% (upward or downward)
  • 2020, maximum payment adjustment of 6% (upward or downward)
  • 2021, maximum payment adjustment of 7% (upward or downward)
  • 2022, maximum payment adjustment of 8% (upward or downward)

Model Builds on Previous Demonstrations

The HHVBP Model comes on the heels of the Home Health Pay for Performance Demonstration (HHP4P) that tested whether incentives to home health organizations improved outcomes. Conducted between January 2008 and December 2009, the project encompassed all home health organizations in seven states divided into four regions, measuring the performance of those organizations that volunteered for the program against other organizations in the same region.

Over the two years, Medicare returned $30 million to organizations. A total of 166 organizations in three regions received payments the first year, with 123 organizations in two regions receiving payments in the second year.

The Hospital Value-Based Purchasing (VBP) program also informed HHVBP. Beginning in FY2013, hospitals have been incentivized for the care they provide to Medicare patients based on specific quality measurements or improvement on a metric. Quality measurements are tweaked each year. Hospitals performed better for FY2016 than they did the previous year, with about 1,800 hospitals receiving positive adjustments in their base Diagnosis-Related Group (DRG) payments.

Performance Metrics Based on Current Reporting

When devising the HHVBP Model, the Centers for Medicare & Medicaid Services (CMS) first turned to the Outcome and Assessment Information Set (OASIS), which is in common use among organizations and will inform a majority of the reporting requirements on the measures. Two of the measures are claims-based, three are new and five are from the Consumer Assessment of Healthcare Providers and Systems Home Health Care Survey (HHCAHPS), which has been in use since 2010.

Taking six priority areas described by the National Quality Strategy, CMS created four classifications that capture not only outcomes, but the quality of care received, the coordination and efficiency of that care, and the patient/caregiver experience:

  • Classification I—Clinical Quality of Care: Measures the quality of services provided by eligible professionals and paraprofessionals within the home health environment.
  • Classification II—Care Coordination and Efficiency: Outcomes measure the end result of care, including coordination of care provided to the beneficiary. Efficiencies measure maximizing quality and minimizing use of resources.
  • Classification III—Person-and Caregiver-Centered Experience: Measures the beneficiary and their caregivers’ experience of care.
  • Classification IV—New Measures: Measures not currently reported to CMS but that may fill gaps in the NQS Domains. New measures include advance care planning, influenza vaccinations for home health staff and shingles vaccinations for patients. Reporting for these measures begins in October 2016.

The Time to Get Ready Is Now

To help prepare your organization for a future defined by value-based purchasing, home health organizations should be concentrating on:

  1. Getting your reporting data right
  2. Developing a performance improvement plan
  3. Focusing on projects most likely to result in improvement
  4. Measuring performance by individual, by episode, by organization and against peer organizations

Download our new white paper, “Get your home health organization ready for value-based purchasing,” to learn more about how the Home Health Value Based Purchasing Model came about and why your home health organization should be preparing now.

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