In author Garrison Keillor’s fictional town of Lake Wobegon, “All the women are strong, all the men are good looking and all the children are above average.” Real places tend to be less tidy — at least statistically. On strength, looks and achievement, most hamlets would follow a normal statistical distribution — a curve with a dense middle and less dense tails, known to non-mathematicians as the “bell curve.”
In April, the Centers for Medicare & Medicaid Services will add a new five-star performance rating to its Hospital Compare website. CMS has announced the methodology for its rating system and published the distribution. As might be expected, the distribution is normal — the majority of hospitals are set to receive three stars. There only are a handful at the low tail of one or the high tail of five. The projection is that 25 percent of all hospitals will receive a four-star or better rating.
Contrast this to the star rating system that is in effect for Medicare Advantage plans. This year, 48 percent of health plans will have a star rating of four or more. Part of this gap between plans and hospitals can be explained by the fact that MA plans have been under such a rating system since 2008, with adjustments for bonuses since 2012. Throughout time, more have improved their performance to gain better ratings and quality bonus payments. But what’s even more interesting is that CMS is concerned that additional plans are being held back from achieving a higher star rating because they enroll large numbers of low-income beneficiaries. This recognition of the importance and influence of social factors on health outcomes — particularly in the area of star ratings — presents a good case study of CMS’ evolving perspective on the issue of sociodemographic status.
Let’s start in 2014, when a task force of the National Quality Forum approved recommendations for an SDS outcome measure risk adjustment. When the NQF recommendations were opened for public comment, nearly 700 responses were received. Eight were against SDS adjustment. CMS was one of the eight.
In 2015, CMS appeared to reverse this oppositional stance on SDS and expressed concern that some MA plans — particularly those that serve large numbers of Medicare and Medicaid dual-eligible beneficiaries — were being held back from achieving four or five star ratings in MA’s star system. CMS moved to provide additional adjustments to compensate for “statistically significant results for low-income and disabled” in calculating star ratings.
In a recent Modern Healthcare article, headlined “CMS admits to bad dual-eligible math,” Sean Cavanaugh, CMS Deputy Administrator and Center for Medicare Director, admitted that dual-eligibility and disability status should be used in risk-adjusted quality measures for MA plans, “What I want you to take away from this is that the industry brought an issue to us and we took it seriously.” CMS Acting Administrator, Andy Slavitt — in yet another allusion to some type of adjustment for the 2017 MA program — noted, “Our research shows that there are statistically significant results for low-income and disabled beneficiaries in certain measures. We are now considering what the appropriate policy responses should be to these findings.”
And then in January, CMS rolled out both a demonstration and guide for hospitals aimed at reducing readmissions for low-SDS patients. The announcement noted, “Racial and ethnic minority populations are more likely than their white counterparts to be readmitted within 30 days of discharge for certain chronic conditions … social, cultural, and linguistic barriers contribute to these higher readmission rates.” The new program recognizes the problem that hospitals of equal quality, but unequal SDS patient mixes, face. However, rather than revising the risk-adjustment policy, CMS has provided guidance and a demonstration to encourage hospitals with predominantly low-SDS patients to try harder.
Some have argued that on the SDS issue the only consistency for CMS has been inconsistency. In 2014, CMS said “no” to SDS adjustment. In 2015, they said “maybe” to SDS factors for MA plans. Now in 2016, they appear to be getting closer to “yes” to the influence of SDS for MA plans, with a “nod,” as one health care provider observed, to all the rest by providing a how-to guide.
In the spirit of the invitation from CMS to bring issues to them, last week MHA released data that called into question whether current CMS programs adequately account for certain hospital’s scoring on readmissions. These hospitals serve a significant number of patients with low SDS — a factor not considered in the scoring methodology for CMS’ Readmissions Reduction Program. Importantly, readmissions data also are included as a component of the dataset that will underpin the star-system scoring.
With a hospital star-rating program scheduled to roll out this spring, CMS’ evolution needs to be transmitted into policy action. MHA isn’t advocating that CMS toss out the current methodology. Rather, we’re advocating for a more equitable system enriched with SDS data.
As star ratings make quality assessment more approachable for consumers — and that should be the goal — they should accurately reflect delivery of quality and value. Further, as billions of dollars continue to move to value-based payment programs, the absence of such a risk adjustment carries the risk of perpetuating disparities in its own right.
Keillor often referred to Lake Wobegon as “the little town that time forgot, and the decades cannot improve.” As CMS’ thinking on SDS evolves, we’re informing discussion with research and advocacy. We’re pushing and prodding. And, it looks like they’re headed in the right direction — one that creates equity, and recognizes the essential work and multiple challenges of safety net and rural hospitals.
Let me know what you think.
Herb B. Kuhn
MHA President and CEO
Vice President of Research and Analytics
In This Issue
Senate Telehealth Legislation Gains First Round Approval
Convenants Not To Compete Bill Stalls In House Select Committee
Committee Approves Helipad Safety Bill
CBO Releases Effect Of Federal Policy On Private Health Insurance Premiums Study
CMS Provides Guidance On Medicaid Outpatient Drug Rule
MHA Releases Issue Brief
CMS Releases Supplemental Document To OQR Specifications Manual