NQF proposes risk adjustment for hospitals treating more poor patients

In a set of eight draft recommendations, the National Quality Foundation (NQF) addresses the concern that reimbursement models tied to outcome measures may unfairly penalize health systems serving greater numbers of poor patients.

The NQF expert panel that examined the issue noted that while the link between low socioeconomic status and poorer health outcomes has been demonstrated by numerous studies, there is a danger in simply lowering outcome expectations for hospitals serving poorer communities because it could remove incentives to work on erasing disparities in care. For example, after hospital readmission rates became a quality measure that health systems were judged on, Yale-New Haven Hospital created respite beds for recently discharged homeless patients to reduce the odds that these patients would bounce back to the hospital after being discharged.

Yet not addressing the realities of treating patients that are socioeconomically complex can also create an incentive to avoid caring for patients that will lower an institution’s quality measures or make an institution that may be doing a great job on clinical quality measures it has full control over — such as central line infection rates and proper drug administration — look like a lower quality institution because of low scores on measures with a large socioeconomic influence, like readmission rates.

“The recommendations neither indicate that all performance measures should always be adjusted for sociodemographic factors, nor that they should never be adjusted for sociodemographic factors,” the report authors state in their introduction. They also added that “carefully done, sociodemographic adjustment would provide a more accurate reflection of performance, but would not mask poor quality.”

The report recommends several solutions to the problem of how to fairly evaluate the performance of health systems that treat a great number of socioeconomically complex patients without destroying incentives for these systems to continually improve their quality of care. For example, one way is to create peer groups where the performance of a particular institution is compared to the performance of other institutions that serve a similar patient population. Another way is to make quality measures more nuanced and distinguish those related to treating clinically complex patients that may have multiple conditions and require coordinated care by many providers from those related to treating socioeconomically complex patients, such as those who are homeless, unable to pay for medications and lacking in family and community support.

For hospitals treating a greater number of low-income patients who may be both clinically and socioeconomically complex, the NQF’s proposed recommendations could eventually lead to greater fairness in outcome-based reimbursement systems. However, it may not arrive ahead of current changes in payment models, and so hospitals are seeking legislative relief.

H.R. 4188, the Establishing Beneficiary Equity in the Hospital Readmission Program Act , a bill currently under consideration by Congress, would require the Secretary of the Department of Health and Human Services (HHS) to adjust the readmission penalty based on a hospital’s share of dual eligible patients — seniors and people with disabilities whose low incomes qualify them for both Medicare and Medicaid.

The NQF proposed recommendations can be viewed here. Comments on the recommendations are being accepted until April 16 at 6 p.m. EST.