MHA Today | February 12, 2016

February 12, 2016
MHA Today: News for Healthcare Leaders

MHA Today is provided as a service to members of the Missouri Hospital Association. Additional information is available online at MHAnet. Connect with us on LinkedIn.


Herb Kuhn, MHA President & CEO 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
Mat Reidhead
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

state and federal health policy developments

Senate Telehealth Legislation Gains First-Round Approval

Staff Contact: Rob Monsees

Senate Bill 621, sponsored by Sen. Gary Romine (R-Farmington), which would modify various telehealth or telemedicine services, received first-round approval on the Senate floor yesterday. The legislation will need another vote by the full Senate before proceeding to the House of Representatives for consideration.

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Convenants Not To Compete Bill Stalls In House Select Committee

Staff Contact: Rob Monsees

House Bill 1660, sponsored by Rep. Keith Frederick (R-Rolla), which would prohibit the use of non-compete clauses in contracts between physicians and nonprofit hospitals, was not voted on yesterday in the Select Committee on Social Services. While the bill saw swift passage through the committee chaired by Rep. Frederick the previous week, it received stiff opposition and questioning in the House Select Committee yesterday. It is expected to come to a vote in the committee next Thursday.

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Committee Approves Helipad Safety Bill

Staff Contact: Rob Monsees

Yesterday, Senate Bill 988, sponsored by Sen. Will Kraus (R-Lee’s Summit), was voted do pass by the Senate Veterans Affairs and Health Committee. The bill keeps the Missouri Department of Health and Senior Services from promulgating rules that require hospitals to have fences or other barriers around hospital helipads.

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CBO Releases Effect Of Federal Policy On Private Health Insurance Premiums Study

Staff Contact: Andrew Wheeler

The Congressional Budget Office released a study about the effects of various federal subsidies and regulations on private health insurance premiums. The CBO and The Joint Committee on Taxation project that in 2016, average premiums for an employment-based insurance plan will be $6,400 for single coverage and $15,500 for family coverage. The report focuses on how the Affordable Care Act effects both employment-based and nongroup marketplace. Effects of the tax credits, individual mandate and excise taxes on premiums are discussed in great detail. In addition, the report reviews how the actions of insurers are affecting premiums.

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Regulatory News
the latest actions of agencies monitoring health care

CMS Provides Guidance On Medicaid Outpatient Drug Rule

Staff Contact: Daniel Landon

The Centers for Medicare & Medicaid Services has issued guidance to state Medicaid directors regarding its recent final federal regulation regarding Medicaid outpatient drugs.

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MHA Releases Issue Brief

Staff Contact: Andrew Wheeler

Yesterday, the Centers for Medicare & Medicaid Services released a final rule requiring Medicare Parts A and B health care providers to report and return overpayments by the later of the date that is 60 days after the date of overpayment, or the due date of any corresponding cost report. MHA has published an issue brief with additional details. Major provisions include the following.

  • overpayments must be reported and returned if identified within six years of the date of overpayment
  • defining “identification” of an overpayment
  • clarification and definition of an overpayment
  • how to report and return overpayments

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CMS Releases Supplemental Document To OQR Specifications Manual

Staff Contact: Sherry Buschjost

The Centers for Medicare & Medicaid Services has determined that a supplemental document is required to the Hospital Outpatient Quality Reporting Specifications Manual Version 9.0a, which covers encounters Jan. 1 through June 30, 2016. Included in the supplemental document are corrected CPT codes clarifying denominator exclusions and removal of additional instructions for OP-33, and updated Tables 1.1a and 9.0 for Appendix A. The supplemental document can be accessed on QualityNet.

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Did You Miss An Issue Of MHA Today?

February 11, 2016
President Releases FY 2017 Proposed Budget
CMS Publishes Final Rule: Medicare Reporting And Returning Of Overpayments
CMS Announces OQR Education Session
MLN Connects Provider eNews Available
CMS Posts Videos Of Provider Training For LTCH QR

February 10, 2016
House Committee Votes Down HMO High-Deductible Legislation
Senate Advances Amendments On Price Transparency And Patient Responsibility
Senate Approves Advance Directives Registry
House Committee Votes Do Pass On APRN Legislation
General Assembly Blocks Personal Care Wage Increase
D.C. Appeals Court Reverses Decision On RAC Hearing Backlogs
Southeast Health Center Of Reynolds County To Close

February 9, 2016
President Releases FY 2017 Budget Proposal
CMS Extends Marketplace Special Enrollment Period For Select Consumers
Proposed Rule Revamps Substance Abuse Confidentiality Standards
HIDI Releases FFY 2015 Inpatient/Outpatient Physician Loyalty Report
HIDI Releases FFY 2016 CAH VBP Payments Model

February 8, 2016
CMS Issues Change Request, Adjusting IPPS Rates
CMS Announces QualityNet Data Center Migration
HIDI HealthStats — Sociodemographic Factors In Risk-Adjusted Readmission Measures
CDC Updates Zika Virus Guidelines
CMS Hosts Medicare Quality Reporting Webinars

Consider This ...

Someone in the U.S. has a stroke about once every 40 seconds.

Source: American Heart Association