P4P: More details needed but potential game-changer

After many assurances over the past year that the Office of the National Coordinator for Health IT and the Centers for Medicare & Medicaid Services (CMS) want to relieve some of the regulatory burden providers face, the Department of Health & Human Services (HHS) this week announced an aggressive plan to move to pay-for-performance rather than volume.

“From the standpoint of the dynamics between Congress and the administration, this move is bold,” said Jeffery Smith, MPP, vice president of public policy for the College of Healthcare Information Management Executives (CHIME), speaking to Clinical Innovation + Technology. “It’s something that merits serious attention.” The organization supports the direction HHS is signaling with this announcement, he says, but “even once CMS begins to identify regulatory mechanisms to make some of these payment changes, there will be continued debate over which path is going to get us toward these goals.”

This also relates to the sustainable growth rate fix (SGR) which comes up every year. “Clearly, HHS is not sitting on its hands while Congress considers another patch. The conversation between the SGR and what HHS is doing are very intertwined.”

When considering how many providers are currently engaged in some kind of pay-for-performance program compared with what HHS wants to achieve in the next three years, “it really does seem like a stretch,” said Smith. He expects over the next weeks and months to see information about the quality measure components that will be part of this initiative. “We will try to work with the government to figure out what a sensible pace looks like. It’s too early to say outright that these goals are unattainable or too easy.”

Howard Landa, MD, CMIO of Alameda County Medical Center in Alameda, Calif., agrees. The devil’s in the details, he said. Conceptually, the plan is “completely in line with what Medicare has always said about moving from volume to value. This could be a real game-changer.” But, providers all across the care continuum must be supported to make it work. “Optimizing one little piece gets you some benefit but if doesn’t go across the whole continuum, you get improvement in one area at the cost of another area.

"Initially I found this announcement incredibly concerning. It sounded like the vast majority of payments would be entirely quality based by 2018. In reading it more carefully, the implication is that there will be a quality portion of the majority of these payments. Now it is all a question of how they implement it,” he said. “If 90 percent of payments will have a quality piece by 2018 and we use the current model of a fee-for-service payment penalty or incentive tied to data, will that be 1 percent or 50 percent of the payment? That’s the real key.” If, as suggested, the movement will be to accountable care and bundled payments, how fast can they pull that off? In my opinion that is where we will see real value.”

Given the reaction to the Meaningful Use penalty that went into effect on Jan. 1, expect a fair amount of angst. "If a significant amount of your payment is going to be based on quality, we need a system to tell us what our quality is. There are lot of EMRs out there but not a lot of doctors are getting Meaningful Use on the provider side.”

Landa predicts this plan could push people to look at ICD-10 more positively because it provides more granular data. Providers have been pushing for ages on the informatics side for quality, efficiency and usability, and this brings quality up to the top. That’s great but we still need to see enough patients to make the system work. If we’re now pushing for more and more data needed to support the quality side, it’s only going to make the systems more and more difficult to use.” Volume and quality have been fighting each other for some time but this could “magnify it and make it worse.”

While the government has talked about aligning programs to reduce provider burden, Landa said that doesn’t meet their goal of reducing cost. Healthcare organizations have been tasked with doing far more than the government has despite their resources. “They tell us to figure out Meaningful Use and value-based purchasing but they can’t figure out to get the insurance exchange website working. Talk about the pot calling the kettle black.”

Timing could be a driver of this effort, said Smith. Currently, Congress is actively discussing how to repeal and replace the SGR but he said he’d put his money on yet another patch. So, to start working toward the end goal of more payment contingent on quality and outcomes, “HHS is saying ‘we’re done waiting on Congress to act on ideas that have been kicking around for quite some time.'”

Landa agrees. “Depending on how this is implemented, it give CMS extensive control over the total payout of Medicare dollars. The impact could dwarf any effect existing penalties and the SGR legislation could provide.”

However, now that technology adoption is so high, it has raised a red flag, Smith said. “The state of quality measurement is pretty poor. It’s pretty complicated and pretty messy. And when you talk about quality measurement through EHRs or electronic quality measurement, the situation gets much worse.”

While progress has been made over the past two years, it has “been painstaking," Smith added. "If the ultimate goal is to reimburse off of performance and rely heavily on quality measures, we’ve got a tough road to hoe.”