Michigan Health and Hospital Association and Advocacy... ® © 2019 DataGen. May not be reproduced...

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© 2019 DataGen. May not be reproduced or distributed without prior written permission.

Michigan Health and Hospital Association

February 6, 2019

Susan McDonough, MBA, MPA, Senior Director

Lauren Davis, MPH, CPH, Senior Healthcare Data and Policy Analyst

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Today’s Objectives

• Overview of Medicare Readmission Reduction, and

Hospital Acquired Condition Programs

• Review Methodologies

• Review Michigan State’s RRP and HAC Reports

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Medicare Quality Based Payment

Reform (QBPR) Programs• Mandated by the ACA of 2010

• VBP Program (redistributive w/ winners and losers)

• Readmissions Reduction Program (remain whole or lose)

• HAC Reduction Program (remain whole or lose)

• National pay-for-performance programs

• Most acute care hospitals must participate; CAHs excluded

• Program rules, measures, and methodologies adopted well in advance (2013-2024)

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Medicare Quality Programs

• Payment adjustments based on facility-specific performance compared to national standards

• Performance metrics are determined using historical data

• Program components change every year

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Quality Program Measure

Populations FFY 2020• Value-Based Purchasing (VBP)

– All patients• Safety, Person and Community Engagement

– Medicare FFS patients only• Clinical Outcomes, Efficiency and Cost Reduction

• Readmissions Reduction Program (RRP)– Medicare FFS patients only

• Hospital Acquired Conditions (HAC)– All patients

• CAUTI, CLABSI, C-diff., MRSA, SSI Colon, SSI Abdominal Hysterectomy

– Medicare FFS patients only• PSI-90

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Medicare Readmission Reduction

Program (RRP)

• Program became effective FFY 2013 (October 1, 2012)

• Penalizes hospitals for exceeding expected readmission rates

• Expected rates based on national performance levels

• Program expands over time with addition of new conditions

• Penalty capped at 3% for 2015 and thereafter

• 1% in FFY 2013;

• 2% in FFY 2014;

• 3% in FFY 2015+

• Measures are established in advance through the IPPS rule

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RRP Program Timeframes

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RRP Methodology

• Excess readmission ratios are calculated for multiple condition areas

– Improvement is not recognized

– Certain planned readmissions are not counted

– No offsets between categories

– Changes in 2019+:• Socio-Demographic Status (SDS) adjustment added to program methodology based on percent of

full-benefit dual eligible patients

Measure FFY 2013 Program FFY 2014 Program FFY 2015 Program FFY 2016 Program FFY 2017+ Program

AMI X X X X X

HF X X X X X

PN X X X X X*

COPD X X X

THA/TKA X X X

CABG X

*expanded to include aspiration PN and sepsis with a secondary diagnosis of PN

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RRP Methodology – FFY 2020 SDS

Adjustment• Groups based on ratio of full-benefit dual eligible relative to total Medicare patients:

#𝐹𝑢𝑙𝑙−𝑏𝑒𝑛𝑒𝑓𝑖𝑡 𝐷𝑢𝑎𝑙 𝑆𝑡𝑎𝑡𝑢𝑠

#𝑀𝑒𝑑𝑖𝑐𝑎𝑟𝑒 𝑃𝑎𝑡𝑖𝑒𝑛𝑡𝑠

– An individual is counted as a full-benefit dual patient if the patient was identified as such for

the month he/she was discharged from the hospital

• identified using the State Medicare Modernization Act (MMA) file of dual eligibility

– Data period for identifying patients is the same 3-year period as the performance period

• i.e. July 1, 2015 – June 30, 2018 for FFY 2020

– Total number of Medicare patients is all Medicare FFS and Medicare Advantage stays using

MedPAR files

– Hospitals are grouped into national quintiles based on full-benefit dual eligible ratio and

compared to hospitals within their quintile

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RRP Methodology• Step 1: Place hospital into quintile

#𝐹𝑢𝑙𝑙−𝑏𝑒𝑛𝑒𝑓𝑖𝑡𝐷𝑢𝑎𝑙 𝑆𝑡𝑎𝑡𝑢𝑠𝑃𝑎𝑡𝑖𝑒𝑛𝑡𝑠

#𝑀𝑒𝑑𝑖𝑐𝑎𝑟𝑒𝑃𝑎𝑡𝑖𝑒𝑛𝑡𝑠= 𝑭𝒖𝒍𝒍 − 𝒃𝒆𝒏𝒆𝒇𝒊𝒕𝑫𝒖𝒂𝒍𝑬𝒍𝒊𝒈𝒊𝒃𝒍𝒆𝑹𝒂𝒕𝒊𝒐

14,322

29,453= 𝑭𝒖𝒍𝒍 − 𝒃𝒆𝒏𝒆𝒇𝒊𝒕𝑫𝒖𝒂𝒍𝑬𝒍𝒊𝒈𝒊𝒃𝒍𝒆𝑹𝒂𝒕𝒊𝒐

48.6% = 𝑭𝒖𝒍𝒍 − 𝒃𝒆𝒏𝒆𝒇𝒊𝒕𝑫𝒖𝒂𝒍𝑬𝒍𝒊𝒈𝒊𝒃𝒍𝒆𝑹𝒂𝒕𝒊𝒐

Ratio of 48.6% puts this hospital in quintile 3• Quintile placement on a national level• Placement will change from year to year based on data period used and ratios of other

hospitals• Quintile 5 is highest, meaning the higher full-benefit dual eligible ratios• Quintile 1 is lowest, meaning the lowest full-benefit dual eligible ratios• Hospitals in higher quintiles will have less stringent benchmarks• Hospitals in lower quintiles will have more stringent benchmarks

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RRP Methodology (con’t)• Step 2: Calculate excess readmission ratios for each condition

(subject to minimum case counts requirements)

• Predicted readmissions = number of unplanned readmissions predicted for a hospital based on hospital’s

performance

• Expected readmission = expected U.S. readmission rate for each hospital’s patient mix

• Ratio less than quintile median excess ratio

- Lower than expected readmission rate

- Better quality

• Ratio greater than quintile median excess ratio

- Higher than expected readmission rate

- Lower quality

- Penalty applies

𝑃𝑟𝑒𝑑𝑖𝑐𝑡𝑒𝑑 𝐴𝑀𝐼 𝑅𝑒𝑎𝑑𝑚𝑖𝑠𝑠𝑖𝑜𝑛 𝑅𝑎𝑡𝑒

𝐸𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝐴𝑀𝐼 𝑅𝑒𝑎𝑑𝑚𝑖𝑠𝑠𝑖𝑜𝑛 𝑅𝑎𝑡𝑒= 𝑨𝑴𝑰 𝑬𝒙𝒄𝒆𝒔𝒔 𝑹𝒂𝒕𝒊𝒐

20.300 %

19.459 %= 𝑨𝑴𝑰 𝑬𝒙𝒄𝒆𝒔𝒔 𝑹𝒂𝒕𝒊𝒐

𝟏. 𝟎𝟒𝟑𝟐 = 𝑨𝑴𝑰 𝑬𝒙𝒄𝒆𝒔𝒔 𝑹𝒂𝒕𝒊𝒐

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RRP Methodology (con’t)• Step 3: Calculate total excess payments for each condition

• Step 4: Calculate total excess payments for all conditions

• Excess Ratios are multiplied by revenue in each condition area to find excess readmission revenue by condition

• Sum of all conditions excess revenue = total excess readmission dollars

• Revenue = exposure

• More conditions = More exposure

𝑇𝑜𝑡𝑎𝑙 𝑃𝑎𝑦𝑚𝑒𝑛𝑡 𝑓𝑜𝑟 𝐴𝑀𝐼 𝑃𝑟𝑜𝑐𝑒𝑑𝑢𝑟𝑒𝑠 × (𝑴𝒆𝒅𝒊𝒂𝒏 𝑸𝒖𝒊𝒏𝒕𝒊𝒍𝒆 𝑬𝒙𝒄𝒆𝒔𝒔 𝑹𝒂𝒕𝒊𝒐 − 𝑨𝑴𝑰 𝑬𝒙𝒄𝒆𝒔𝒔 𝑹𝒂𝒕𝒊𝒐) = 𝑨𝑴𝑰 𝑬𝒙𝒄𝒆𝒔𝒔 𝑫𝒐𝒍𝒍𝒂𝒓𝒔

$6,000,000 × (𝟏. 𝟎𝟐𝟑𝟑 − 𝟏. 𝟎𝟒𝟑𝟐) = 𝑨𝑴𝑰 𝑬𝒙𝒄𝒆𝒔𝒔 𝑫𝒐𝒍𝒍𝒂𝒓𝒔

$𝟏𝟏𝟗, 𝟒𝟎𝟎 = 𝑨𝑴𝑰 𝑬𝒙𝒄𝒆𝒔𝒔 𝑫𝒐𝒍𝒍𝒂𝒓𝒔

𝑨𝑴𝑰 𝑬𝒙𝒄𝒆𝒔𝒔 𝑷𝒂𝒚𝒎𝒆𝒏𝒕𝒔 + 𝑯𝑭 𝑬𝒙𝒄𝒆𝒔𝒔 𝑷𝒂𝒚𝒎𝒆𝒏𝒕𝒔 + 𝑷𝑵 𝑬𝒙𝒄𝒆𝒔𝒔 𝑷𝒂𝒚𝒎𝒆𝒏𝒕𝒔 + 𝑪𝑶𝑷𝑫 𝑬𝒙𝒄𝒆𝒔𝒔 𝑷𝒂𝒚𝒎𝒆𝒏𝒕𝒔 +𝑻𝑯𝑨 𝑻𝑲𝑨 𝑬𝒙𝒄𝒆𝒔𝒔 𝑷𝒂𝒚𝒎𝒆𝒏𝒕𝒔 + 𝑪𝑨𝑩𝑮 𝑬𝒙𝒄𝒆𝒔𝒔 𝑷𝒂𝒚𝒎𝒆𝒏𝒕𝒔 = 𝑻𝒐𝒕𝒂𝒍 𝑬𝒙𝒄𝒆𝒔𝒔 𝑫𝒐𝒍𝒍𝒂𝒓𝒔

$𝟏𝟏𝟗, 𝟒𝟎𝟎 + $𝟎 + $𝟎 + $𝟎 + $𝟎 + $𝟎 + $𝟎 = 𝑻𝒐𝒕𝒂𝒍 𝑬𝒙𝒄𝒆𝒔𝒔 𝑫𝒐𝒍𝒍𝒂𝒓𝒔

$𝟏19,400 = 𝑻𝒐𝒕𝒂𝒍 𝑬𝒙𝒄𝒆𝒔𝒔 𝑫𝒐𝒍𝒍𝒂𝒓𝒔

Historically, excess

ratio was compared to

a “1”

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RRP Methodology (con’t)• Step 5: Calculate Readmissions Adjustment factor (capped at .97, or 3%, for FFY 2015+)

• Total excess readmission revenue is used to calculate adjustment factors.

• The excess revenue is not your impact.

• Payments are adjusted on a per-claim basis to all Medicare FFS cases (not just RRP cases)

• Although the SDS adjustment is budget neutral nationally, there will be winners and losers within each quintile.

𝟏 − 𝑩𝑵 𝑨𝒅𝒋𝒖𝒔𝒕𝒆𝒓 × 𝑻𝒐𝒕𝒂𝒍 𝑬𝒙𝒄𝒆𝒔𝒔 𝑫𝒐𝒍𝒍𝒂𝒓𝒔

𝟑 𝒚𝒓 𝑻𝒐𝒕𝒂𝒍 𝑴𝒆𝒅𝒊𝒄𝒂𝒓𝒆 𝑰𝑷𝑷𝑺 𝑶𝒑𝒆𝒓𝒂𝒕𝒊𝒏𝒈 𝑹𝒆𝒗𝒆𝒏𝒖𝒆= 𝑹𝒆𝒂𝒅𝒎𝒊𝒔𝒔𝒊𝒐𝒏𝒔 𝑨𝒅𝒋. 𝑭𝒂𝒄𝒕𝒐𝒓

𝟏 − 𝟎. 𝟗𝟗 X $𝟏𝟏𝟗, 𝟒𝟎𝟎

$𝟓𝟎, 𝟎𝟎𝟎, 𝟎𝟎𝟎= 𝑹𝒆𝒂𝒅𝒎𝒊𝒔𝒔𝒊𝒐𝒏𝒔 𝑨𝒅𝒋𝒖𝒔𝒕𝒎𝒆𝒏𝒕 𝑭𝒂𝒄𝒕𝒐𝒓

0.9976 = 𝑹𝒆𝒂𝒅𝒎𝒊𝒔𝒔𝒊𝒐𝒏𝒔 𝑨𝒅𝒋𝒖𝒔𝒕𝒎𝒆𝒏𝒕 𝑭𝒂𝒄𝒕𝒐𝒓(applied on a per-claim basis)

-0.24% cut

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RRP Trends•Continually evolving

•As measures are added, exposure increases and hospitals are more likely to receive penalties

$0

$10

$20

$30

$40

$50

Estimated U.S. Revenue by Condition

COPD:$6.20 Billion

CABG: $3.88 Billion

20

13

& 2

01

4P

rogram

s

20

15

& 2

01

6P

rogram

s

20

17

-2

02

1 P

rogram

s

THA/TKA:$12.74 Billion

PN:

$6.64 Billion

HF:$10.05 Billion

AMI:

$7.23 Billion

PN Expansion: $5.54 Billion

Adjustment Factor Percent Cut

No Payment Penalty 0% 21.8% gggg 24.7% gggg 22.8% gggg 18.1% ggg

0.9951 to 0.9999 -0.01% to -0.5% 43.9% gggggggg 36.3% ggggggg 37.5% ggggggg 41.6% gggggg

0.9901 to 0.9950 -0.5% to -0.999% 19.1% ggg 19.2% ggg 19.2% ggg 20.1% gggg

0.9851 to 0.9900 -1.0% to -1.499% 8.7% gg 9.5% gg 9.9% gg 9.4% gg

0.9801 to 0.9850 -1.5% to -1.999% 3.2% g 5.1% g 5.2% g 5.6% g

0.9751 to 0.9800 -2.0% to -2.499% 1.5% g 2.4% g 2.7% g 2.5% g

0.9701 to 0.9750 -2.5% to -2.999% 0.7% 1.4% g 1.3% g 1.2% g

0.97 -3.0% 1.1% 1.4% g 1.4% g 1.5% g

% of Hospitals

2016 2017 2018 2019

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RRP Performance Scorecard

Worksheet

% of

Impact

% of

Impact

% of

Impact

3.51% 13.96% —

25.44% 18.27% —

70.37% 66.62% —

0.00% 0.00% —

0.00% 1.15% —

0.68% 0.00% —

Estimated Impact

($118,700)

($155,400)

($566,500)

$0

($9,800)

$0

$94,940,500

FFY 2020 TBD($985,300)

$92,434,600

($850,400)

1,603

401

515

225

Estimated Program PenaltiesThis table shows the actual program penalty adjustments applied in FFYs 2018-2019 (if applicable). Actual adjustment factors for the FFY 2020 Program are expected to be made public by CMS in

the summer of 2019.

FFY 2020 Program ESTIMATED Performance

(Based on data from July 2014 - June 2017)

Eligible

Discharges

Eligible

Discharges

Coronary Artery Bypass Graft (CABG)

$91,230,500

Estimated Impact on Inpatient Payments

Condition

Actual Penalty % Applied to Inpatient PaymentsEstimated Inpatient Operating Payments Subject to

Adjustment*

FFY 2020 TBD

FFY 2020 TBD

—

Estimated Impact

—

Eligible

Discharges

Actual Capped Adjustment Factor 0.9892

Maximum Readmission Penalty (3.0%)

—

241

Estimated Impact

796

—

-0.92%▲

-1.08%

0.9908

808 —($250,700)

—

—

($693,300)

$0

$0

1,502

436

28($6,700)28

496

FFY 2019 Program ACTUAL Performance



(Based on data from July 2013 - June 2016)(Actual program will use July 2015 - June 2018 data)

($2,736,900) ($2,773,000) ($2,848,200)

This section is intended to show the conditions that drive the payment penalties by Program year (if applicable) along with the maximum penalty (3.0%). The graph below provides estimates of the

impact each condition has on this hospital compared to the maximum possible penalty (shown as a dashed line). The penalties are determined based on Excess Readmissions for each condition.

($34,600)

—

—

Acute Myocardial Infarction (AMI)

Heart Failure (HF)

Total Hip/Total Knee Arthroplasty (THA/TKA)

Pneumonia (PN)

Chronic Obstructive Pulmonary Disease (COPD)

—

—

—

—

($3,000,000)

($2,500,000)

($2,000,000)

($1,500,000)

($1,000,000)

($500,000)

$0

AMI

HF

PN

THA/TKA

COPD

CABG

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Worksheet (con’t)

[A] [A] [A]

ConditionPredicted

Rate÷

Expected

Rate=

Excess

Readm.

%

Predicted

Rate÷

Expected

Rate=

Median

Excess

Ratio

Excess

Readm.

%

Predicted

Rate÷

Expected

Rate=

Median

Excess

Ratio

Excess

Readm.

%14.6% ÷ 14.1% = 3.07% -- ÷ -- = 1.1127 ▲ 1.0065 10.61% -- ÷ -- = 1.1127 — 1.0065 10.61%

22.6% ÷ 20.6% = 9.72% -- ÷ -- = 1.0858 ▼ 1.0233 6.26% -- ÷ -- = 1.0858 — 1.0233 6.26%

18.4% ÷ 16.8% = 9.48% -- ÷ -- = 1.1112 ▲ 1.0254 8.58% -- ÷ -- = 1.1112 — 1.0254 8.58%

4.0% ÷ 4.7% = 0.00% -- ÷ -- = 0.9654 ▲ 0.9987 0.00% -- ÷ -- = 0.9654 — 0.9987 0.00%

20.0% ÷ 20.5% = 0.00% -- ÷ -- = 1.0172 ▲ 1.0103 0.69% -- ÷ -- = 1.0172 — 1.0103 0.69%

12.1% ÷ 11.8% = 2.23% -- ÷ -- = 0.9893 ▼ 1.0178 0.00% -- ÷ -- = 0.9893 — 1.0178 0.00%



To review hospital performance over time, this table shows the Predicted and Expected Readmissions Rates and resulting Excess Readmissions Ratios for each of the conditions evaluated for each

program year. While Predicted and Expected Rates are risk adjusted and vary by each condition and year due to changes in patient risk factors, Excess Ratios and resulting Excess Percentages may

be compared across years and conditions. Rates and ratios for FFYs 2018-2019 reflect actual program performance as provided by CMS. For FFY 2020, performance is held constant at the FFY

HF

PN

1.0223

AMI

Excess RatioExcess

Ratio

- The ranges of full-benefit dual eligible ratios using CMS' FFY 2019 IPPS Final Rule Hospital RRP Supplemental File: Quintile 1: 0.000% -13.69%, Quintile 2: 13.69%-18.40%, Quintile 3: 18.41% -

23.23%, Quintile 4: 23.23% - 30.98%, Quintile 5: 30.99%+.

THA/TKA

1.0972

0.8478





Performance Overview

COPD

The 21st Century Cures Act of 2016 required CMS to implement a Socio-Demographic Status (SDS) adjustment into the FFY 2019 program. In the FFY 2018 IPPS final rule, CMS adopted an interim

adjustment in which hospitals will be grouped into quintiles based on their ratio of full-benefit dual eligible to total Medicare Fee-For-Service (FFS) and Medicare Advantage (MA) patients. Hospitals

then are compared to the condition-specific median excess ratio of all hospitals within their quintile. The adjustment is budget neutral nationally. In the FFY 2019 IPPS final rule, CMS adopted the

same SDS adjustment for the FFY 2020 program.

Percent of Full-Benefit Dual Eligible Patients Not Applicable 45.9% 45.9%National Quintile (1 = small disadv. pop, 5 = large

disadv. pop)Not Applicable 5 5

- CMS identified full-benefit dual eligible patients using the State Medicare Modernization Act (MMA) file and the total number of Medicare patients as the total number of Medicare FFS and MA

patients using MEDPAR. The full-benefit dual eligible ratios and quintile assignments in this analysis are from CMS' FFY 2019 IPPS Final Rule Hospital RRP Supplemental File. The FFY 2019 full-benefit

dual eligible ratios are calculated using the same three-year period as the program performance period (July 1, 2014 - June 30, 2017). FFY 2020 full-benefit dual eligible ratios and quintile

assignments are held at the FFY 2019 levels. In the actual FFY 2020 program, the full-benefit dual eligible ratios will be calculated using the same three-year period as the program performance

Excess Ratio

1.0948

CABG

0.9760

1.0307

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Worksheet (con’t)

[D]

[E]

[F]

$840,619

PN $24,514,210

$6,594,238

$3,303,686

Condition Revenue

$3,271,521

Excess

[C = A × B] **

DRG Pmt

Ratio [B]

0.0127

CABG

$4,849,675

$19,308,915

$6,379,017

$4,120,768

$970,490$41,314,784

Excess

[C = A × B] **

$8,646,635

THA/TKA

COPD

$3,778,824

Estimated Revenue by ConditionCondition-specific revenue (or Diagnostic Related Group(DRG) payment ratio) is needed for the calculation of the payment adjustments under the program. If a hospital is determined to have

excess readmissions for a condition (shown in the Performance Overview table earlier), condition-specific revenue (or Diagnostic Related Group (DRG) payment ratio) is multiplied by the

corresponding Excess Ratio to determine the Excess Revenue/Ratio used to calculate payment penalties. The graph below displays Medicare inpatient base operating revenue to indicate relative

exposure by condition and potential changes in exposure as revenue changes and as additional conditions/condition-specific revenues are added to the program. For the FFY 2020 estimate,

revenues/ratios are held constant at FFY 2019 levels.

Condition





0.9908▲

$1,007,927 $22,518

$2,324,667

$0

$0

Excess

[C = A × B] **

$115,882

Condition Revenue

$3,271,521

Condition Revenue [B]

AMI



Estimated Uncapped Penalty % [E*Sum{C}/D*-1]

—

HF

-1.29% -0.92% -0.92%

Budget Neutrality Modifier

Total for all Eligible Conditions

$7,264,072

$49,391,509

$19,308,915

$6,379,017

$4,120,768

$970,490$41,314,784

$7,264,072

Not Applicable

Estimated Uncapped Adj. Factor (1 + Penalty %) 0.9871

Estimated Capped Adj. Factor (Capped at 0.9700)

0.0001

0.0014

0.0018

0.0064

0.0000

0.0001

0.0000

0.0127

0.0000

Total Three-Year Inpatient Base Operating Revenue $257,051,570$257,051,570$255,129,001

0.9908

0.9908 0.9908

0.9534 0.9534

0.9871

0.0283 0.0283

0.0751

0.0248

0.0160

0.00380.00970.0097

0.0751

0.0248

0.0160

0.0038

0.0014

0.0018

0.0064

0.0000

DRG Pmt

Ratio [B]

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000AMI

HF

PN

THA/TKA

COPD

CABG

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Readmissions Reduction Program:

Hospital Case Study • Hospital had poorer performance

from 2018 to 2019 in half of the

measures

• Estimated negative annual impact

improves from ($582,900) in

2018 to ($466,200) in 2019 due

in part to the addition of SDS

adjustment

• Hospitals in higher quintiles will

typically be compared to less

stringent benchmarks and

hospitals in lower quintiles will

generally be compared to more

stringent benchmarks.

2017

Excess RatioMedian

Excess Ratio

AMI 0.0000 0.0000 - 0.0000 - 1.0065

HF 1.1018 1.0864 ▼ 1.0954 ▲ 1.0233

PN 0.9600 1.0127 ▲ 0.9969 ▼ 1.0254

THA/TKA 1.1272 1.3101 ▲ 1.2584 ▼ 0.9987

COPD 1.0025 1.0020 ▼ 1.0337 ▲ 1.0103

CABG 0.0000 0.0000 0.0000 - 1.0178

Quintile Assignment N/A

Final RRP Adjustment Factor 0.9872

Estimated Annual Impact ($246,000) ($582,400) ▼ ▲

0.9763

($466,200)

2018

0.97

N/A

2019

Excess Ratio Excess Ratio

5

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MI’s RRP Revenue by Condition

Condition/Procedure 2013-2014 2015-2016 2017-2019

AMI $256,970,600 $256,970,600 $256,970,600

Heart Failure $351,232,500 $351,232,500 $351,232,500

Pneumonia $225,889,800 $225,889,800 $389,315,500

THA/TKA N/A $387,562,400 $387,562,400

COPD N/A $228,933,000 $228,933,000

CABG N/A N/A $119,289,700

Total Program Exposure $834,092,900 $1,450,588,300 $1,733,303,700

Increase in Exposure 73.9% 19.5%

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MI’s RRP Impact by Condition

Condition/Procedure 2017 2018 2019

AMI ($2,958,300) ($3,218,500) ($3,053,600)

Heart Failure ($4,499,400) ($4,572,800) ($4,355,300)

Pneumonia ($6,658,800) ($5,648,400) ($5,633,800)

THA/TKA ($7,699,800) ($6,798,400) ($5,983,500)

COPD ($3,255,700) ($2,947,300) ($3,176,500)

CABG ($955,300) ($2,119,700) ($1,761,600)

Total Impact ($26,027,300) ($25,305,100) ($23,964,300)

Eligible providers

and their

characteristics are

based on the FFY

2019 IPPS Final

Rule Correction

Notice.

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MI’s Readmission Rate Trends2Q 2015

July 1, 2011 -

June 30, 2014

READM_30_AMI: Acute Myocardial

Infarction (AMI) 30-Day Readmission

Rate16.9% 16.9% ▼ 16.5% ▼ 16.1% ▼

READM_30_HF: Heart Failure (HF) 30-

Day Readmission Rate22.3% 22.3% ▼ 21.9% ▼ 21.7% ▼

READM_30_PN: Pneumonia (PN) 30-Day

Readmission Rate17.2% 17.5% ▲ 17.1% ▼ 16.9% ▼

READM_30_HIP_KNEE: Elective Total

Hip/Knee Surgery (THA/TKA) 30-Day

Readmission Rate4.8% 4.7% ▼ 4.4% ▼ 4.1% ▼

READM_30_COPD: Chronic Obstructive

Pulmonary Disease (COPD) 30-Day

Readmission Rate20.4% 20.4% ▲ 20.2% ▼ 20.1% ▼

READM_30_CABG: Coronary Artery

Bypass Graft (CABG) 30-Day

Readmission Rate14.9% 14.4% ▼ 14.1% ▼ 13.4% ▼

State Rates

2Q 2016July 1, 2012 -

June 30, 2015

2Q 2017July 1, 2013 -

June 30, 2016

2Q 2018July 1, 2014 -

June 30, 2017R

ead

mis

sio

n R

ate

s

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MI’s Readmission Rank Trends2Q 2015

July 1, 2011 -

June 30, 2014

READM_30_AMI: Acute Myocardial

Infarction (AMI) 30-Day Readmission

Rate32 of 51 33 of 50 ▲ 41 of 51 ▲ 39 of 51 ▼

READM_30_HF: Heart Failure (HF) 30-

Day Readmission Rate40 of 51 40 of 50 41 of 51 ▲ 38 of 51 ▼

READM_30_PN: Pneumonia (PN) 30-Day

Readmission Rate36 of 51 36 of 50 32 of 51 ▼ 33 of 51 ▲

READM_30_HIP_KNEE: Elective Total

Hip/Knee Surgery (THA/TKA) 30-Day

Readmission Rate34 of 51 43 of 50 ▲ 39 of 51 ▼ 42 of 51 ▲

READM_30_COPD: Chronic Obstructive

Pulmonary Disease (COPD) 30-Day

Readmission Rate32 of 51 37 of 50 ▲ 38 of 51 ▲ 42 of 51 ▲

READM_30_CABG: Coronary Artery

Bypass Graft (CABG) 30-Day

Readmission Rate29 of 51 31 of 50 ▲ 42 of 51 ▲ 41 of 51 ▼

Re

adm

issi

on

Ran

ks

2Q 2016July 1, 2012 -

June 30, 2015

2Q 2017July 1, 2013 -

June 30, 2016

2Q 2018July 1, 2014 -

June 30, 2017

State Rank

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Medicare Hospital Acquired Condition (HAC)

Reduction Program

• Program started FFY 2015 (October 1, 2014)

• Penalizes hospitals with the highest HAC rates

• Rates are per 1,000 patients

• Compared to all other eligible hospitals nationally

• 1% Penalty applied to all hospitals in the worst performing quartile

• 25% of hospitals will receive a penalty

• Applied to Total Medicare FFS Inpatient Dollars

• Parameters set in IPPS rulemaking at least one year in advance

• Penalty is in addition to existing HAC DRG demotion policy

Measure Scores Domain Scores Total HAC ScoreTop Quartile/1.0% Penalty

DeterminationAnnual Program Impact

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HAC Program Timeframes

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®


HAC Reduction Program

Methodology• HAC measures:

– PSI-90 Composite Measure, CAUTI and CLABSI, SSI (colon surgery and abdominal surgery), C-Diff and MRSA

• Separate performance scores are calculated for each HAC measure– Z-score (used to be 1 to 10 (where 1 = best; 10 = worst))– Based on national mean and standard deviation for all program eligible

hospitals (used to be based on national deciles)

– Improvement is not recognized

• Average of all eligible measures are calculated to determine a total HAC score (prior to FFY 2020, averages were

calculated for two domains, then the domains were weighted together for a total HAC score)

• Total HAC Score determines worst performing quartile of hospitals to receive 1% payment penalty

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HAC Reduction Program: Z-score

Methodology• HAC program 2018+ evaluates hospitals based on a Z-

score– Measure ratios are winsorized to remove effects of outliers (top and bottom 5%)

– Represents a hospital’s distance from the national average for a measure, in terms of units of standard deviation

• A POSTIVE z-score is above the average, and reflects POORperformance

• A NEGATIVE z-score is below the average, and reflects GOODperformance

• Lower scores are better– Z-scores for Domain 2 are averaged, Domain 1 is assigned the PSI 90 z-score

– Domains are weighted together to determine Total HAC Score

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®


HAC Reduction Program Measure

Calculation Worksheet

A positive z-score INCREASES the chance of

receiving a HAC penalty.

CAUTI Z-Score4

(Lower is Better)0.9447

HAI_2: Catheter Associated Urinary Tract Infection (CAUTI) (ICU + Select Wards) Performance Detail

Standardized Infection Ratio (SIR)1 =Number of Observed CAUTI Infections

Number of Expected CAUTI Infections 80.47

Winsorized

National Mean3 0.8570

Winsorized

Standard Deviation3

=115.00

= 1.4290 Winsorized SIR2 1.4290

0.6055

5th Percentile0.0000

Mean0.8570

95th Percentile2.1786

Base SIR1.4290

CAUTI SIR

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HAC Reduction Program Measure

Calculation Worksheet (con’t)

Scoring Summary SIR1

HAI_1: Central Line Associated Blood Stream Infection (CLABSI) (ICU + Select Wards) 1.0640 1.0640 0.4991

HAI_6: Clostridium difficile (C.diff.) 1.0330 1.0330 0.5599

HAI_2: Catheter Associated Urinary Tract Infection (CAUTI) (ICU + Select Wards) 1.4290 1.4290 0.9447

Surgical Site Infection (SSI) Pooled Standardized Infection Ratio (SIR) * 1.2640 1.2640 0.8200

HAI_5: Methicillin-resistant Staphylococcus Aureus (MRSA) 1.3130 1.3130 0.7496

Winsorized

SIR2 Z-Score4

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HAC Reduction Program Impact

Calculation Worksheet

Estimated Total HAC Score

Lowest Total HAC Score Receiving Payment Penalty2

Hospital Estimated to be in the Top (worst) Quartile?

Estimated HAC Program Payment Impact

HAC Payment Penalty Determination:2

YES

($3,019,700)

Revenue at Risk For Payment Reduction (1%) $3,019,700

Total HAC Score Performance Summary:

0.9550

0.3410

Estimated Program Impact

Hospital Revenue Exposure Estimate:

Estimated FFY 2019 Revenue $301,966,899

-1.9148

25th Percentile -0.4385

Mean-0.0332

75th Percentile 0.3410

1.9864

0.9550

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Pe

rce

nti

le 2

1% Penalty

No Payment Penalty

Total HAC Score

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Payment Determination with Ties

• CMS Approach: Will not

penalize more than 25% of

hospitals

• DataGen Approach: Inclusive

of ties at the 75th percentile

in order to be conservative

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Hospital Acquired Condition:

Hospital Case Study• Hospital improves in performance

from 2016 to 2017 in domain 2 and stays consistent in domain 1

• Total HAC score declines and hospital goes from no penalty in 2016 to penalty in 2017, even with domain weight shifting towards domain 2

• Even if all hospitals improve, 1.0% penalty is always applied to worst performing quartile. A hospital must stay at pace with the pack in order to avoid getting a penalty

2016

Domain 1 Score 6.8 6.8 -

Domain 2 Score 6.7 6.6 ▼

Total HAC Score 6.73 6.63

75th Percentile Total HAC Score 6.75

Receives 1.0% Reduction? No

2017 2018

6.57 0.3712

Yes Yes

2.3268

0.2684

0.5771

1%

Penalty

No Payment

Penalty

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MI’s HAC Reduction Program

Performance

HAC Reduction Program Performance

($10,972,100)

19

20.2%

0.25%Percent of Total Revenue Affected

FFY 2016

($12,459,600)

24

25.5%

0.29%

FFY 2018

Statewide Impact

Number of Penalty Hospitals

Percent of Hospitals Receiving Penalty

FFY 2017

($21,309,200)

27

28.7%

0.49%

Eligible providers and

their characteristics

are based on the FFY

2018 IPPS Final Rule

Correction Notice.

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®


Quality Program Reference GuideMeasure ID

Achievement

Threshold1 Benchmark2 Minimum

Standards4

HAI_1* (CLABSI) 0.3690 0.0000

HAI_2* (CAUTI) 0.9060 0.0000

HAI_5* (MRSA) 0.7670 0.0000

HAI_6* (C.diff) 0.7940 0.0020

PSI-90* 0.964542 0.709498 3 CasesPSI-

90PC-01* (MOVED) Elective Delivery Prior to 39 completed Weeks Gestation 2.0408% 0.0000% 10 Cases

HAI-3 * (SSI - Colon) Surgical Site Infection - Colon 0.8240 0.0000

CLA

BSIHAI-4* (SSI - Abd. Hyst.) 0.7100 0.0000

Measure IDAchievement


Standards4

MORT–30–AMIMORT–30–AMI 85.0916% 87.3053%MO

RT–MORT–30–HF 88.3421% 90.7656%

MORT–30–PN 88.2860% 90.7900%

Measure ID Measure Description Floor3 Achievement


Standards4

Communication with Nurses 55.27% 78.52% 86.68%

Communication with Doctors 57.39% 80.44% 88.51%

Responsiveness of Hospital Staff 38.40% 65.08% 80.35%

Communication about Medicines 43.43% 63.37% 73.66%

Hospital Cleanliness & Quietness 40.05% 65.60% 79.00%

Discharge Information 62.25% 86.60% 91.63%

Overall Rating of Hospital 37.67% 70.23% 84.58%

CTM-3 (NEW) 3-Item Care Transitions Measure 25.21% 51.45% 62.44%

Measure ID Measure DescriptionAchievement


Standards4

MSPB-1*

Median Ratio

Across All

Hospitals***

Mean Ratio of

Lowest Decile

of Hospitals***

25 Cases

Notes:

Quality Based Payment Reform (QBPR) Reference Guide

Value Based Purchasing (VBP) Overview: FFY 2018 Program

Measures, Performance Standards, Evaluation Periods, and Other Program Details for the FFY 2018 VBP Program

Safe

ty o

f C

are

Measure Description

Central Line-Associated Blood Stream Infection (CLABSI) (ICU only)

1 Predicted

Infection Each

Catheter-Associated Urinary Tract Infection (CAUTI) (ICU only)

Methicillin-resistant Staphylococcus Aureus (MRSA) Blood Laboratory-identified Events

Clostridium difficile (C.diff.)

Pooled Surgical Site Infection (SSI) Measure**:

1 Predicted

Infection on

One of the Two

StrataSurgical Site Infection - Abdominal Hysterectomy

Patient Safety Indicator Composite (AHRQ Software v5.0.1)

Clin

ical

Car

e

Removed Measures From Clinical Care: AMI-7a: Fibrinolytic Therapy Received Within 30 Minutes of Hospital Arrival; IMM-2: Patients Assessed and Given Influenza

Vaccination

100 Surveys

Effi

cie

ncy

an

d

Co

st R

ed

uct

ion

Spending Per Hospital Patient With Medicare

Pat

ien

t Ex

pe

rie

nce

of

Car

e

Removed Measures from Patient Experience of Care: Pain Management

Measure Description

Acute Myocardial Infarction (AMI) 30-Day Mortality Rate (converted to survival rate for VBP)

25 Cases EachHeart Failure (HF) 30-Day Mortality Rate (converted to survival rate for VBP)

Pneumonia (PN) 30-Day Mortality Rate (converted to survival rate for VBP)

***Performance standards for the MSPB-1 measure are based on the performance period and are not released in advance of the program.

FFY 2018 VBP Program Timeframes

The Affordable Care Act (ACA) of 2010 mandated the implementation of an inpatient hospital value-based purchasing (VBP) Program. The VBP Program is a pay-for-performance program that links

Medicare payment to quality performance for acute care hospitals paid under the Inpatient Prospective Payment System (IPPS). Under the VBP Program, using a subset of the quality data reported

from the Hospital Inpatient Quality Reporting (IQR) Program grouped into quality domains, hospitals can earn points towards a Total Performance Score (TPS). The TPS will serve as the basis for

determining hospitals’ VBP payments or gain/loss under the program. In calculating the TPS, the scoring methodology provides points to hospitals that achieve high quality standards as well as

points to hospitals that improve in the quality measures evaluated. As required by the ACA, a pool of funds, to be redistributed to hospitals based on their TPS, will be funded through an across-the-

board reduction to Medicare IPPS base operating payments. The reduction has been capped at 2.0%. Critical Access Hospitals (CAHs), hospitals in Maryland and Puerto Rico, and small hospitals

with insufficient numbers of measures and/or cases are excluded from the program.1The Achievement Threshold is the minimum performance standard for each measure and reflects the median performance score (50th percentile) for all hospitals in the nation during the baseline

period. The threshold is used in combination with other factors to calculate hospital-specific achievement points.2The Benchmark is the top performance standard for each measure reflects the average performance score for the top 10% of all hospitals in the nation during the baseline period. The benchmark

is used in combination with other factors to calculate hospital-specific achievement and improvement points.3The Floor is for Patient Experience of Care measures only and each measure reflects the lowest measure score in the nation during the baseline period. The floor is used in combination with other

factors to calculate hospital-specific consistency points.4Hospitals must meet minimum case and survey counts to be included in the VBP Program. In addition to the case count criteria, hospitals must have a minimum of 2 measures to obtain a Clinical

Care Domain score and 3 measures to obtain a Safety of Care domain score.5The Domain Weight is a weight applied to each domain to calculate a hospital-specific TPS. A hospital's weighted TPS is compared to TPSs for all hospitals to determine the hospital-specific gain or

loss under the program. If hospitals do not meet the minimum requirements on one or more domain, the other domains are proportionately reweighted to determine a TPS. For the FFY 2018

program, hospitals are required to be scored on 3 of the 4 domains to be eligible for the program.

6The Baseline Period is a specified period for which quality data collected under the IQR Program will be evaluated. The baseline period data is used for determining the floors, achievement

thresholds, and benchmarks (excluding the efficiency measure) and is also used in combination with other factors to calculate hospital-specific improvement points.7The Performance Period is a specified period for which quality data collected under the IQR Program will be evaluated. The performance period data is used in combination with other factors to

calculate hospital-specific achievement and improvement points.

*For these measures, lower scores are better.

**The final SSI measure score is an aggregate of the calculated scores for HAI-3 and HAI-4, which are then weighted based on the predicted infections for each measure. For purposes of domain eligibility, CMS

considers the two SSI measures as a single measure.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Total Performance Score:Original Domain Weighting5

Efficiencyand Cost

Reduction25%

Safety of Care25%

Clinical Care25%

Clinical Care:

Patient Experience

of Care25%

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

Safety of Care (All

other):

Performance Period7

Efficiency and Cost

Reduction:

Baseline Period6

2017 2018

FFY 2018

Payment

Adjustment

Efficiency and Cost

Reduction:

Performance Period7

Safety of Care (All

other):

Baseline Period6

Safety of Care (PSI-90):

Performance Period7

Clinical Care:

Baseline Period6

Clinical Care:

Performance Period7

Safety of Care (PSI-90):

Baseline Period6

Patient Experience of

Care:

Performance Period7

2013 2014 2015 2016

Patient Experience of

Care:

Baseline Period6

20122009 2010 2011


Threshold1 Benchmark

2 Minimum

Standards4

HAI_1* (CLABSI) (EXPANDED) 0.860 0.000

HAI_2* (CAUTI) (EXPANDED) 0.822 0.000

HAI_5* (MRSA) 0.854 0.000

HAI_6* (C.diff) 0.924 0.113PSI-

90PC-01* Elective Delivery Prior to 39 completed Weeks Gestation 1.0038% 0.0000% 10 Cases


CLAB

SIHAI-4 * (SSI - Abd. Hyst.) 0.762 0.000



Standards4

MORT–30–AMI MORT–30–AMI 85.0617% 87.3263%MOR

T–30MORT–30–HF 88.3472% 90.8094%

MORT–30–PN Pneumonia (PN) 30-Day Mortality Rate (converted to survival rate for VBP) 88.2334% 90.7906%MOR

T–30

–PN

THA/TKA* (NEW) 3.2229% 2.3178%



Standards4








CTM-3 3-Item Care Transitions Measure 11.30% 51.42% 62.77%



Standards4

MSPB-1*

Median Ratio

Across All

Hospitals***

Mean Ratio of

Lowest Decile

of Hospitals***

25 Cases

Notes:




Medicare payment to quality performance for acute care hospitals paid under the Inpatient Prospective Payment System (IPPS). Under the VBP Program, using a subset of the quality data reported from

the Hospital Inpatient Quality Reporting (IQR) Program grouped into quality domains, hospitals can earn points towards a Total Performance Score (TPS). The TPS will serve as the basis for determining

hospitals’ VBP payments or gain/loss under the program. In calculating the TPS, the scoring methodology provides points to hospitals that achieve high quality standards as well as points to hospitals that

improve in the quality measures evaluated. As required by the ACA, a pool of funds, to be redistributed to hospitals based on their TPS, will be funded through an across-the-board reduction to Medicare

IPPS base operating payments. The reduction has been capped at 2.0%. Critical Access Hospitals (CAHs), hospitals in Maryland and Puerto Rico, and small hospitals with insufficient numbers of measures

and/or cases are excluded from the program.

1The Achievement Threshold is the minimum performance standard for each measure and reflects the median performance score (50th percentile) for all hospitals in the nation during the baseline

period. The threshold is used in combination with other factors to calculate hospital-specific achievement points.2The Benchmark is the top performance standard for each measure reflects the average performance score for the top 10% of all hospitals in the nation during the baseline period. The benchmark is

used in combination with other factors to calculate hospital-specific achievement and improvement points.3The Floor is for Patient Experience of Care measures only and each measure reflects the lowest measure score in the nation during the baseline period. The floor is used in combination with other

factors to calculate hospital-specific consistency points.4Hospitals must meet minimum case and survey counts to be included in the VBP Program. In addition to the case count criteria, hospitals must have a minimum of 2 measures to obtain a Clinical Care

Domain score, 2 measures to obtain a Safety of Care domain score, and 1 measure to obtain an Efficiency and Cost Reduction domain score.5The Domain Weight is a weight applied to each domain to calculate a hospital-specific TPS. A hospital's weighted TPS is compared to TPSs for all hospitals to determine the hospital-specific gain or loss

under the program. If hospitals do not meet the minimum requirements on one or more domain, the other domains are proportionately reweighted to determine a TPS. For the FFY 2019 program,

hospitals are required to be scored on 3 of the 4 domains to be eligible for the program.

6The Baseline Period is a specified period for which quality data collected under the IQR Program will be evaluated. The baseline period data is used for determining the floors, achievement thresholds,

and benchmarks (excluding the efficiency measure) and is also used in combination with other factors to calculate hospital-specific improvement points.7The Performance Period is a specified period for which quality data collected under the IQR Program will be evaluated. The performance period data is used in combination with other factors to








1 Predicted

Infection on

One of the Two


100 Surveys

Effi

cie

ncy

an

d

Co

st R

ed

uct

ion Measure Description

Pe

rso

n a

nd

Co

mm

un

ity

Enga

gem

en

t C

linic

al C

are

Measure Description


25 Cases Each

Heart Failure (HF) 30-Day Mortality Rate (converted to survival rate for VBP)

Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (THA)

Complication Rate




Measure Description

Central Line-Associated Blood Stream Infection (CLABSI) (ICU and Select Wards)

1 Predicted

Infection Each

Catheter-Associated Urinary Tract Infection (CAUTI) (ICU and Select Wards)


Removed Measures From Safety of Care: PSI-90: Patient Safety Indicator Composite

Safe

ty o

f C

are

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Efficiencyand Cost

Reduction25%

Safety of Care25%

Clinical Care25%

Clinical Care:

Person and Community Engagement

25%

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

Clinical Care (Mortality Measures):

Baseline Period6

Clinical Care (THA/TKA):

Baseline Period6

Clinical Care (THA/TKA):

Performance Period7

20192009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Person and

Community

Engagement:

Baseline Period6

Person and

Community

Engagement:

Performance Period7

FFY 2019

Payment

Adjustment

Safety of Care:

Baseline Period6

Safety of Care:

Performance

Period7

Efficiency and Cost

Reduction:

Baseline Period6

Efficiency and Cost

Reduction:

Performance Period7

Clinical Care (Mortality Measures):

Performance Period7



Standards4

HAI_1* (CLABSI) 0.828 0.000

HAI_2* (CAUTI) 0.784 0.000

HAI_5* (MRSA) 0.815 0.000

HAI_6* (C.diff) 0.852 0.091PSI-

90PC-01* Elective Delivery Prior to 39 completed Weeks Gestation 0.0000% 0.0000% 10 Cases


CL

AB

SI

HAI-4* (SSI - Abd.

Hyst.)0.722 0.000



Standards4

MORT–30–AMI MORT–30–AMI 85.3715% 87.5869%M

ORMORT–30–HF 88.1090% 90.6068%

MORT–30–PN Pneumonia (PN) 30-Day Mortality Rate (converted to survival rate for VBP) 88.2266% 90.9532%M

OR

T–

THA/TKA* 3.2229% 2.3178%



Standards4








CTM-3 3-Item Care Transitions Measure 20.33% 51.14% 62.50%



Standards4

MSPB-1*

Median Ratio

Across All

Hospitals***

Mean Ratio of

Lowest Decile

of Hospitals***

25 Cases

Notes:

Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (THA)

Complication Rate




Safe

ty o

f C

are

Measure Description

Central Line-Associated Blood Stream Infection (CLABSI) (ICU and Select Wards)

1 Predicted

Infection Each

Catheter-Associated Urinary Tract Infection (CAUTI) (ICU and Select Wards)





1 Predicted

Infection on

One of the Two


100 Surveys

Effi

cie

ncy

an

d

Co

st R

ed

uct

ion Measure Description

Pe

rso

n a

nd

Co

mm

un

ity

Enga

gem

en

t C

linic

al C

are

Measure Description


25 Cases Each

Heart Failure (HF) 30-Day Mortality Rate (converted to survival rate for VBP)




Medicare payment to quality performance for acute care hospitals paid under the Inpatient Prospective Payment System (IPPS). Under the VBP Program, using a subset of the quality data reported

from the Hospital Inpatient Quality Reporting (IQR) Program grouped into quality domains, hospitals can earn points towards a Total Performance Score (TPS). The TPS will serve as the basis for

determining hospitals’ VBP payments or gain/loss under the program. In calculating the TPS, the scoring methodology provides points to hospitals that achieve high quality standards as well as

points to hospitals that improve in the quality measures evaluated. As required by the ACA, a pool of funds, to be redistributed to hospitals based on their TPS, will be funded through an across-

the-board reduction to Medicare IPPS base operating payments. The reduction has been capped at 2.0%. Critical Access Hospitals (CAHs), hospitals in Maryland and Puerto Rico, and small

hospitals with insufficient numbers of measures and/or cases are excluded from the program.

1The Achievement Threshold is the minimum performance standard for each measure and reflects the median performance score (50th percentile) for all hospitals in the nation during the baseline

period. The threshold is used in combination with other factors to calculate hospital-specific achievement points.2The Benchmark is the top performance standard for each measure reflects the average performance score for the top 10% of all hospitals in the nation during the baseline period. The benchmark

is used in combination with other factors to calculate hospital-specific achievement and improvement points.3The Floor is for Patient Experience of Care measures only and each measure reflects the lowest measure score in the nation during the baseline period. The floor is used in combination with other

factors to calculate hospital-specific consistency points.4Hospitals must meet minimum case and survey counts to be included in the VBP Program. In addition to the case count criteria, hospitals must have a minimum of 2 measures to obtain a Clinical

Care Domain score, 2 measures to obtain a Safety of Care domain score and 1 measure to obtain an Efficiency and Cost Reduction domain score.5The Domain Weight is a weight applied to each domain to calculate a hospital-specific TPS. A hospital's weighted TPS is compared to TPSs for all hospitals to determine the hospital-specific gain or

loss under the program. If hospitals do not meet the minimum requirements on one or more domain, the other domains are proportionately reweighted to determine a TPS. For the FFY 2020

program, hospitals are required to be scored on 3 of the 4 domains to be eligible for the program.

6The Baseline Period is a specified period for which quality data collected under the IQR Program will be evaluated. The baseline period data is used for determining the floors, achievement

thresholds, and benchmarks (excluding the efficiency measure) and is also used in combination with other factors to calculate hospital-specific improvement points.7The Performance Period is a specified period for which quality data collected under the IQR Program will be evaluated. The performance period data is used in combination with other factors to





0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Efficiencyand Cost

Reduction25%

Safety of Care25%

Clinical Care25%

Clinical Care:

Person and Community Engagement

25%

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

20202010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Efficiency and Cost

Reduction:

Performance Period7

Person and

Community

Engagement:

Baseline Period6

Person and

Community

Engagement:

Performance Period7

FFY 2020

Payment

Adjustment

Clinical Care:

Baseline Period6

Clinical Care:

Performance Period7

Safety of Care:

Baseline Period6

Safety of Care:

Performance

Period7

Efficiency and Cost

Reduction:

Baseline Period6

Individual measure scores for similar measures are combined to find overall Domain scores. On each domain, a minimum number of measures must be scored in order to be

eligible for the domain. Once domain scores are calculated, a total performance score is calculated, combining domain scores based on the program year's applicable domain

weights. Hospitals are required to be scored on 3 of the 4 domains. Domain weights are reweighted proportionally when hospitals are not eligible for one or more domains.

VBP Slope/Linear Function, Payout Percentage, Adjustment Factor, and Program Impact Calculation

Once TPS scores are calculated for all eligible hospitals, the VBP slope is calculated such that all program contributions are paid out, making the program budget neutral

nationally. The VBP slope/linear function is used to determine each hospitals payout percentage (the amount of their contribution to the VBP pool they receive back) as well

as final adjustment factors, and impacts under the program.


Hospital Scoring Methods and Other Program Details for the VBP Program

Value Based Purchasing (VBP) General Program Methodology

As required by the ACA, VBP eligible hospitals contribute a set percentage of their Medicare IPPS base operating payments to a national VBP pool of dollars. All VBP pool dollars

are then paid out, in full, based on each hospital's performance under the program. Under the Program, hospitals are evaluated on a measure by measure basis and receive a

score of 0-10 on each measure where they meet each measure's minimum requirement. Next, similar measures are grouped into domains and overall domain scores are

calculated based on the average measure score in the domain. Domain scores are then combined to find a Total Performance Score (TPS). The TPS serves as the basis for

determining hospitals’ VBP payments or gain/loss under the program. Using all program-eligible hospitals' Total Performance Scores, CMS calculates a VBP slope that

redistributes all VBP contributions and makes the program budget neutral nationally. Each hospitals TPS multiplied by the slope determines payout percentages. The basic

Measure Score Calculation

For each measure, hospitals can receive a score of 0-10 depending on where they fall in relation to national performance standards (achievement points) and/or how much

they have improved from historical rates/ratios (improvement points). After achievement and improvement points are calculated, the higher of the two determines final

Patient Experience of Care (Person and Community Engagement FFY 2019+) - Consistency Points Calculation

In addition to individual measure scores, the Patient Experience of Care domain scores hospitals based on how consistently they perform across all measures within the

domain. Each hospital can receive between 0-20 consistency points based on the measure with the lowest Consistency Multiplier calculated as shown below:

Domain Score and Total Performance Score (TPS) Calculation

Measure Scores

Domain

Scores

Total Performance

Score

Payout Percentage

VBP SlopeAdjustment

FactorProgram Impact

Performance Period Score - Achievement Threshold

Benchmark - Achievement Threshold

Performance Period Score - Baseline Period Score

Benchmark - Baseline Period Score

[9 x [

[10 x [

Achievement Points (all program measures) = ] + 0.5

Improvement Points (all program measures) = ] - 0.5

Final Points (all program measures) = Higher of Achievement or Improvement

Final PointsHAI3 x Predicted InfectionsHAI3 + Final PointsHAI4 x Predicted InfectionsHAI4]

Predicted InfectionsHAI3 + Predicted InfectionsHAI4

Final Points (SSI Measure) = [

Performance Period Score - Floor

Achievement Threshold - Floor

Consistency Points (patient experience of care) = [20 x Lowest Measure Consistency Points Multiplier] - 0.50

Consistency Points Multiplier (patient experience of care) = [ ]

Applicable Conditions

Notes:

Applicable Conditions


Readmission Reduction Program (RRP) Overview

Applicable conditions, performance timeframes, and other details for the FFY 2018, 2019, and 2020 programs

The Readmission Reduction Program (RRP) adjusts Medicare Inpatient payments based on hospital readmission rates for several conditions. This program is punitive only and does

not give hospitals credit for improvement over time or lower readmission rates than the nation. First, CMS compares hospital risk-adjusted readmission rates to national rates to

calculate excess readmission ratios for each condition. Next, CMS applies the excess ratio to aggregate payments for each condition to find excess readmission dollars by condition.

The sum of all excess readmission dollars for all applicable conditions divided by all inpatient operating revenue determines program adjustment factors/impacts under the program.

For FFY 2019, CMS implemented an interim methodology to incorporate socio-demographic status (SDS) into the RRP program. CMS has not yet stated what the SDS adjustment will

be for FFY 2020 and therefore FFY 2020 SDS methodology is not included. The basic program methodology is shown below:

FFY 2018 RRP Program Measure Scoring

FFY 2019 Program Measure Scoring (Interim Socio-Demographic Status Adjustment)

3Excess Readmission Ratio - Calculated for each condition under the program, this ratio represents how each hospital's actual, observed readmission rate differs from the rate for all

U.S. hospitals, adjusted for case-mix. An excess ratio greater than one indicates poorer performance than the country and results in payment penalties while an excess ratio less

than one indicates better performance and has no effect on payment.4Excess Readmission Revenue - Reflects the portion of revenue for each condition CMS believes was paid due to excess readmissions. Excess readmission revenue is a function of

base operating revenue for the condition and the excess ratio on the condition. Base operating dollars reflects operating payments without adjustments for DSH, IME, or outlier 5Readmission Reduction Program Adjustment Factor - Under the RRP program, adjustment factors are calculated by dividing total excess readmission dollars (all conditions) by total

base operating dollars for all patients for the same three year performance period as measured by the readmission rates. Adjustment factors are used to reduce IPPS payments on a

per-discharge basis for performance under the program. CMS currently sets an adjustment factor floor of 0.9700, or a 3.0% payment penalty.

Readmission rates, aggregate payments by condition, and excess readmission dollars by condition are all defined by a predetermined list of procedure/diagnoses codes specific to

each condition. For each condition, condition-specific exclusions and adjustments may apply. Full detail on measure methodology as well as applicable ICD-9 (FFY 2018) and ICD-10

codes (FFYs 2019 and 2020) for each condition are provided here:

https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier4&cid=1219069855841

Readmission rates, aggregate payments by condition, and excess readmission dollars by condition are all defined by a predetermined list of procedure and/or diagnoses codes specific to each condition,

excluding certain planned readmissions or regular, scheduled follow up care. The following patients are also excluded from the rates/revenue estimates used to calculate program adjustments for all

measures: patients who are not enrolled in Medicare fee-for-service (FFS); patients under the age of 65; patients without at least 30 days enrollment post-discharge in a Medicare FFS plan; patients who were

discharged against medical advice (AMA); certain patients who were transferred to/from another inpatient hospital

A hospital must have an applicable period of three years of discharge data and at least 25 cases in order to calculate an excess readmission ratio for each applicable condition. Each additional condition added

to the program increases the revenue exposed and the potential for excess readmissions that results in penalties under the program. The total estimated revenue across all hospitals for each condition is

shown in the graph above to indicate the relative magnitude of each condition under the program.

6Quintile Median Excess Readmission Ratio - A hospital is placed into a quintile based on their ratio of full-benefit dual eligible patients to total Medicare patients (including

Medicare Fee-For-Service and Medicare Advantage stays) over the three year program performance period. A median excess readmission ratio is calculated for each quintile for each

condition. A hospital's own excess readmission ratio for each condition will be compared to the condition-specific quintile median excess readmission ratio to determine total excess

7Budget Neutrality Modifier - A budget neutrality modifier is calculated such that the total Medicare savings using the FFY 2019 interim methodology are equal to what the total

Medicare savings would have been if the previous RRP methodology was used. This budget neutrality modifier is applied to each hospital's RRP adjustment factor.

Program Timelines

1Predicted Readmission Rate - Reflects the hospital's risk-adjusted, observed 30-day readmission rate following inpatient discharges for each applicable condition. Rates are risk

adjusted for age, sex, comorbidities, and other patient characteristics that may contribute to higher readmission rates. These rates also include exclusions for readmissions that are

a result of planned follow up care, or unrelated readmissions that are never related to the index admission. Predicted rates reflect performance for the three year period shown 2Expected Readmission Rate - Reflects the U.S. 30-day readmission rate for each condition with hospital specific risk adjustments to estimate the expected U.S. readmission rate for

each hospitals patient mix. Rates are risk adjusted for age, sex, comorbidities, and other patient characteristics that may contribute to higher readmission rates. These rates also

include exclusions for readmissions that are a result of planned follow up care, or unrelated readmissions that are never related to the index admission. Expected rates reflect

adjusted national performance for the three year period shown above.

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

Estimated U.S. Revenue by Condition

COPD:$5.80 Billion

CABG: $3.88 Billion

20

13

& 2

01

4P

rogra

ms

20

15

& 2

01

6P

rogra

ms

20

17

, 20

18

, 20

19

,& 2

02

0P

rogram

s

THA/TKA:

$12.32 Billion

Excess Readmission Ratios by Condition

Excess Readmission Revenue by Condition

Total Excess Readmission Revenue (all conditions)

RRP Adjustment Factor Program Impact

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

2020

FFY 2020 Program

Performance Period (All Conditions)

FFY 2020 Program

Payment Adjustment

FFY 2019 Program

Payment Adjustment

FFY 2018 Program


FFY 2018 Program

Payment Adjustment

FFY 2019 Program


2017 2018 201920162013 2014 2015

PN:$6.64 Billion

HF:$9.37 Billion

AMI:$6.92 Billion

PN Expansion: $3.45 Billion

Domain Weight Central Line Associated Blood Stream Infection (CLABSI) Domain WeightPSI 11: Postop Respiratory Failure Catheter Associated Urinary Tract Infection (CAUTI)

PSI 13: Postop Sepsis Surgical Site Infection (SSI) Pooled SIR3

PSI 12: Periop PE or DVT SSI from Colon Surgery

PSI 9: Periop Hemorrhage or Hematoma Rate SSI from Abdominal Hysterectomy

PSI 3: Pressure Ulcer Clostridium difficile (C.diff.) SIR

PSI 6: Iatrogenic Pneumothorax Methicillin-resistant Staphylococcus Aureus (MRSA)

PSI 10: Postop Acute Kidney Injury Requiring Dialysis

PSI 14: Postop Wound Dehiscence

PSI 8: In-Hospital Fall with Hip Fracture

Notes:

21.6%

Measure Scoring

15% 85%

3The pooled Surgical Site Infection (SSI) measure is made up of two individual SSI measures: SSI - Abdominal Hysterectomy and SSI - Colon. For the pooled SIR measure, observed infections for

both SSI measures are divided by predicted infections to calculate a pooled SIR. Hospitals are then evaluated and assigned measure points based on their pooled SIR.

2CDC Measure Updates: Beginning in FFY 2018, CMS rebased rebase the CDC measure reference population data to calendar year 2015, resulting in changes to the denominators used to

calculate the HAI SIRs. In addition, the CAUTI and CLABSI measures were expanded to include non-ICU medical, surgical, and medical/surgical wards.

20.9%

8.5%

6.0%

5.3%

4.1%

HAC ratios for all program-eligible hospitals nationwide are assigned winsorized z-scores. A z-score represents how different a hospital performed compared to the national average, in

terms of standard deviations from the mean: poor performance = positive z-score (worse than the national average) and good performance = negative z-score (better than the national

average). Lower z-scores are better. Winsorization is intended to remove the effects of extreme outliers. CMS chose to do this by setting all z-score values below the 5th percentile, to the

5th percentile value and above the 95th percentile, to the 95th percentile value.

In order to receive a score on a measure, hospitals must meet minimum requirements. For Domain 1, a hospital must have 3 or more cases in at least one of the ten component PSI

measures that make up the PSI-90 composite measure. For Domain 2, a hospital must have 1 or more predicted infections for each measure (1 or more pooled predicted infection for

SSI).

*Measures not meeting the minimum scoring requirements are dropped from the domain score calculation. If a domain does not contain at least one eligible measure, then the Total

HAC score is determined based solely on the other domain. Hospitals receive the maximum score for any Domain 2 measure that is not submitted, unless provided with a waiver.

PSI 15: Unrecognized Abdominopelvic Accidental

Puncture/Laceration

Domain 1: AHRQ Claims Based Measures Domain 2: CDC Chart Abstracted Measures2

PSI-90: Patient Safety and Adverse Events Composite1 Weight

30.5%


Hospital Acquired Condition (HAC) Reduction Program Overview

Applicable conditions, performance timeframes, and other details for the FFY 2018, 2019, and 2020 programs

The Hospital Acquired Condition (HAC) Reduction Program sets payment penalties each year for hospitals in the top quartile (worst performance) of HAC rates for the country. The HAC reduction

program is punitive only and does not give hospitals credit for improvement over time. Under the program, hospitals are compared to the nation measure by measure on their z-score. Scores

for similar measures are combined into domain scores. Domain scores are then weighted together into a Total HAC score. The Total HAC score is used to determine the top quartile (worst

performance) for payment penalty in each year. The HAC payment penalty is 1.0% of total Medicare Fee-For-Service (FFS) revenue and does not change year to year. The basic program

methodology is shown below:

6Using the formula, individual measure scores are assigned a z-score that represent how different a hospital performed relative to the national average in terms of standard deviation from

the mean. Z-scores are winsorized to remove extreme outliers.

1The Domain 1 modified PSI-90 composite measure is calculated by combining performance on 10 individual Patient Safety Indicator (PSI) measures. While hospitals are scored on the

overall PSI-90 composite measure, each component PSI and their weight towards the overall composite are shown above. Weights shown are based on version 6.0a of the AHRQ Quality

Indicators software.

1.3%

1.0%

0.7%

5Unlike the Value Based Purchasing and Readmission Reduction Program, penalties under this program are applied to total Medicare payments, inclusive of Operating, Capital, Uncompensated

Care payments, outlier payments, DSH, IME, and Value based purchasing (VBP)/Readmission Reduction Program (RRP) program adjustments.

Program Timelines

Other Program Calculations

4Individual measure scores are combined into domain scores, and domain scores are combined into a Total HAC score.

Measure Scores Domain Scores Total HAC ScoreTop Quartile/1.0% Penalty

DeterminationAnnual Program Impact

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

FFY 2018: Domain 1

Performance Period

FFY 2020 Program

Payment

AdjustmentFFY 2020: Domain 2

Performance Period

FFY 2018: Domain 2

Performance Period

FFY 2018 Program

Payment

Adjustment

FFY 2019 Program

Payment

AdjustmentFFY 2019: Domain 2

Performance Period

FFY 2019: Domain 1

Performance Period

FFY 2020: Domain 1

Performance Period

2018 2019 20202014 2015 2016 2017

www.datagen.info

®


Quality Program Measure Trends

• Chasing a moving target• Measures/Domains

• National Improvement Trends

• Performance Standards

Release Quarter 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018

Data Collection DatesApr. 1, 2014 -

Mar. 31, 2015

July 1, 2014 -

June 30, 2015

Oct.1, 2014 -

Sept. 30,

2015

Jan. 1, 2015 -

Dec. 31, 2015

Apr. 1, 2015 -

Mar. 31, 2016

July 1, 2015 -

June 30, 2016

Oct.1, 2015 -

Sept. 30,

2016

Jan. 1, 2016 -

Dec. 31, 2016

Apr. 1, 2016 -

Mar. 31, 2017

July 1, 2016 -

June 30, 2017

Oct.1, 2016 -

Sept. 30,

2017

Jan. 1, 2017 -

Dec. 31, 2017

0 Hospital Score 81% 81% 80% 80% 80% 80% 80% 80% 80% 78% 79% 78%

Best Decile 85% 85% 85% 85% 85% 85% 85% 85% 85% 85% 86% 86%

Average 79% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80%

79% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80%

Rank in State 8 of 51 7 of 53 14 of 53 11 of 52 17 of 54 19 of 55 22 of 55 23 of 55 24 of 53 39 of 53 29 of 54 35 of 55

Rank in U.S. 959 of 3536 943 of 3542 1240 of 3483 1288 of 3506 1320 of 3496 1364 of 3497 1405 of 3504 1416 of 3488 1467 of 3486 2067 of 3468 1744 of 3460 2083 of 3567

H_COMP_1_A_P: Communication with Nurses

76%

78%

80%

82%

84%

86%

88%

Hospital Score

Best Decile

Average

www.datagen.info

®


Hospital-Specific One-Pager Report

• 3-year trend for each hospital

• FFY 2016-2018– FFY 2017-2019

coming soon

• Actual performance on all 3 programs: VBP, RRP, HAC

Hospital

Score

Hospital

Percentile2

Hospital

Score

17th 32nd ▲

21st 19th ▼ 38th ▲

Clincal Care: Outcomes

(FFY 2017+)58th ▲ 56th ▼

Safety of Care (FFY

2017+)62nd ▲ 30th ▼

0th 0th - 0th -

12th 29th ▲ 29% 23rd ▼

Payback Percent (TPS x Slope)

Final VBP Adjustment Factor4 ▲ ▼

Estimated Annual Impact ▲ ▼

1

2

3

4

2016 2017 2018

Excess

Ratio

Revenue by

Condition

Excess

Readm.

Dollars*

Revenue by

Condition

1.0360 X $3,487,387 = $125,424 1.0611 ▲ X $3,679,455 = 0.9887 ▼ X $3,603,006 =

0.9044 X $2,836,999 = $0 0.8962 ▼ X $2,998,615 = 0.9873 ▲ X $3,260,716 =

0.9581 X $3,866,011 = $0 0.9793 ▲ X $5,302,057 = 1.0087 ▲ X $3,912,810 =

1.1639 X $3,876,749 = $635,400 1.1338 ▼ X $3,098,194 = 1.1230 ▼ X $2,400,208 =

0.9566 X $1,832,651 = $0 0.9713 ▲ X $1,819,508 = 0.9764 ▲ X $1,940,409 =

1.0542 X $3,374,347 = 0.9761 ▼ X $3,039,026 =

Est. Excess Readmission Dollars ▲ ▼

Final RRP Adjustment Factor

Percentage Impact

Estimated Annual Impact ▲ ▲

Percentile

Domain 1 Score 31st 8.0 ▲ 1.0537

Domain 2 Score 44th 5.2 ▼ -0.2785

Total HAC Score 38th ▲

75th Percentile Total HAC Score

Receives 1.0% Reduction?

Estimated Annual Impact - -

▲ ▲($317,900) ($224,300)

-Payment adjustments under the program reflect actual, final performance for all three years. VBP adjustment factors and slopes are taken from the FFYs 2016-2018 IPPS Final Rules CMS' Table 16B. The VBP domain scores

are from the final update of Hospital Compare for that program year. RRP excess readmission ratios by condition and adjustment factors are taken from the FFYs 2016-2018 IPPS Final Rule RRP Supplemental Files. HAC Flags

are taken from the final update of Hospital Compare for that program year. Inpatient revenue is estimated using hospital payment data from the FFY 2018 Final Rule Correction Notice Inpatient Prospective Payment System

(IPPS) Impact File. FFY 2018 revenue is reduced by the appropriate marketbasket factor for FFYs 2016 and 2017. Hospitals for which FFY 2018 revenue is not available are not included in this report. Hospitals that are not

eligible for at least one of the three programs in at least one of the three years are not included in this report.

For the values displayed above, an ▼ arrow indicates poorer performance than the prior year, while an ▲ arrow indicates better performance compared to the prior year.

-Under the Hospital Acquired Condition (HAC) reduction program, hospitals with Total HAC scores above the 75th percentile Total HAC score for all US hospitals will receive a 1.0% reduction to Medicare Inpatient Prospective

Payment System (IPPS) operating, uncompensated care and capital payments, inclusive of Disproportionate Share Hospital (DSH), Indirect Medical Education (IME), Low Volume Hospital (LVH) and any payment

adjustment(s) made under the RRP and/or VBP program. This analysis excludes impact to outliers. Total HAC scores are calculated by combining performance on measures into the two domains shown above. The table

displays the percentile performance on each domain to indicate relative performance on each domain.

- Beginning with the FFY 2018 HAC program, HAC ratios for all program-eligible hospitals nationwide were assigned winsorized z-scores which represent how a hospital performed compared to the national average, in terms

of standard deviations from the mean. Poor performance is indicated by a positive z-score and good performance is indicated by a negative z-score. Lower scores are better. As the FFYs 2016 and 2017 programs utilize a

decile scoring methodology, results should not be directly compared to FFY 2018.

For the scores displayed above, an ▼ arrow indicates better performance than the prior year, while an ▲ arrow indicates poorer performance compared to the prior year.

For the impacts displayed above, an ▼ arrow indicates poorer performance than the prior year, while an ▲ arrow indicates better performance compared to the prior year.

Ove

rall

Imp

act

FFY 2016 FFY 2017 FFY 2018

Total Impact of Medicare Quality

Programs($366,900)

85th

No No No

$0 $0 $0

5.00 5.62 55th -0.0787 45th

6.75 6.57 0.3712

HA

C R

ed

uct

ion

Pro

gram

FFY 2016 FFY 2017 FFY 2018Domain

Weight

Domain

ScoreDomain Weight

Domain

ScorePercentile

75% 5.3 85% 45th 85% 34th

Domain

Weight

Domain

ScorePercentile

25% 4.0 15% 70th 15%

($225,000) ($223,800) ($111,400)

-Under the RRP program, hospitals are evaluated on multiple condition areas based on the amount of revenue paid for what CMS determines to be excess readmissions during a three year performance period. Excess

readmission dollars for each condition are calculated based on the 'excess readmission ratio' (percent of readmissions in excess to what is predicted) and revenue by condition area.*Excess readmission dollars by condition are estimated based on FFYs 2011-2016 MedPAR claims data for each program year and are shown above to indicate the condition areas that are driving hospital performance in each

year. Actual revenue and excess dollars by condition area will vary due to differences in data sources and calculation methodologies.

For the condition specific performance displayed above, an ▼ arrow indicates better performance than the prior year, while an ▲ arrow indicates poorer performance compared to the prior year.

For the impacts displayed above, an ▼ arrow indicates poorer performance than the prior year, while an ▲ arrow indicates better performance compared to the prior year.

0.9930 0.9931▲

0.9966▲

-0.70% -0.69% -0.34%

$760,824 $822,145 $329,393

$34,068

THA/TKA $414,533 $295,325

COPD $0 $0

Each year the Centers for Medicare and Medicaid Services (CMS) calculates a VBP slope that is used to determine hospital payouts under the VBP program and results in a budget neutral program. The slope is

dependent on the distribution of all Total Performance Scores and will vary each year.

For the values displayed above, an ▼ arrow indicates poorer performance than the prior year, while an ▲ arrow indicates better performance compared to the prior year.

Re

adm

issi

on

s R

ed

uct

ion

Pro

gram

(R

RP

)

FFY 2016 FFY 2017 FFY 2018

Excess RatioExcess Readm.

Dollars*Excess Ratio

Revenue by

Condition

Excess Readm.

Dollars*

Co

nd

itio

n

AMI $224,859 $0

HF $0 $0

PN $0

CABG Does Not Apply $182,753 $0

($141,900) ($94,100) ($112,900)

Performance on all domains is combined to calculate a Total Performance Score (TPS) used to redistribute contributions under the program. Domain weights changed between FFYs 2016 and 2017 and each

domain was not weighted equally.

VBP Payout Percentage 1.31% 1.71% 1.66%

0.9956 0.9971 0.9966

47%

20%

0% 25%

74.78% 85.49% 82.77%

Program Contribution Percentage 1.75% 2.00% 2.00%

Total Performance Score (TPS)1 27% 28%

VBP Slope3 2.7731 3.0715

Domain

WeightDomain Weight Hospital Score

Hospital

Percentile2

Domain

Weight

Hospital

Percentile2

25%

Adjustment factors are calculated based on each hospital's program contribution and payout amounts. Adjustment factors are applied to base operating payments on a per-discharge basis to adjust for VBP program

performance.

Hospitals consistently performing better than their peers on all measures/domains will likely gain under the program while hospitals performing worse will lose under the program. Hospital percentile ranks are shown

for each domain to indicate performance relative to peers where the 100th percentile represents the best performance and 1st percentile represents the worst.

Patient Experience of Care 25% 21% 25% 18% 25%

50%

0%

2.8909

Outcomes of

Care40% 44% 38th

25%

Medicare Quality Programs OverviewFederal Fiscal Years (FFYs) 2016 - FFY 2018 Program Performance

SAMPLE HOSPITAL

Val

ue

Bas

ed

Pu

rch

asin

g (V

BP

)

FFY 2016 FFY 2017 FFY 2018

Do

mai

n

Clinical Care: Process 10% 40% 5% 50% Does Not Apply

25% 43%

Efficiency and Cost Reduction 25% 0% 25%

43% 25%

-1.9602

-0.4091

-0.0158

0.3712

2.1496

-0.0787

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Per

cen

tile

FFY 2018 Total HAC Score

17

th

32

nd

21

st

19

th

38

th

38

th

58

th

56

th

0th

0th

0th

62

nd

30

th

12

th

29

th

23

rd

0

10

20

30

40

50

60

70

80

90

100

Per

cen

tile

Clinical Care: ProcessPatient Experience of CareClinical Care: OutcomesEfficiencySafety of CareTotal Performance Score (TPS)

2

FFY 2016 FFY 2017 FFY 2018

-$225,000 -$223,800 -$111,400

-$250,000

-$200,000

-$150,000

-$100,000

-$50,000

$0

AMI HF PN

THA/TKA COPD CABG

FFY 2016 FFY 2017 FFY 2018

No Payment

Penalty

1%

Penalty

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Other Quality Data Sources

• Hospital Compare

• Quality Net

• Other

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Key Reminders for Hospitals

• Payments are at stake

• Historical data will continue to drive these programs

• Program targets move with national performance, so hospitals must keep pace with the pack

• Complexity of program measures

• Overlap with other quality based payment reform programs• VBP & HAC: CAUTI, CLABSI, Surgical Site Infection (SSI), MRSA and C-Diff Measures

• VBP & RRP: THA/TKA, AMI, HF, and PN

• HACs will have a worst performing 25%

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Questions?

Michigan Health and Hospital Association and Advocacy... ® © 2019 DataGen. May not be reproduced...

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Transcript of Michigan Health and Hospital Association and Advocacy... ® © 2019 DataGen. May not be reproduced...