Health Care Quality and Value: Foundation of Health Care Reform

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  • November 1, 2012
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By Stephen C. Spain, MD, FAAFP, CPC
Angela “Annie” Boynton, BS, CPC, CPC-H, CPC-P, CPC-I, RHIT, CCS, CCS-P, CPhT
Editor’s note: Health care reform brings a number of new concepts to coding, billing, compliance, and practice management. The most far reaching—especially from an organizational point of view—are accountable care organizations (ACOs). Below is the first of three articles detailing why ACOs exist, how they work, and what affect they will have on us.
“Quality” and “value” have percolated to the top of  health care payers’ concerns in recent years. Payer initiatives currently in development will have a substantial, pervasive, and dramatic impacts on virtually all AAPC members—and on patients and providers, as well. These initiatives focus on reducing unnecessary medical services to lower costs, and on identifying effective practice patterns.

The Challenge Ahead

The United States has the planet’s highest per capita health care expenditures. In 2010, we spent $2.6 trillion on health care (an amount equal to the entire economy of France). By 2019, an estimated 19 cents of every dollar will be spent on health care. Even as health care costs rise rapidly, significant federal regulations require additional expenditure and investment in health care infrastructure and technology (e.g., 5010, ICD-10-CM, administrative simplification, health care reform, health information exchanges (HIEs), etc). Many industry stakeholders and lawmakers are looking to payers and providers for ways to reduce costs, while ensuring efficacy and quality.
Nearly 32 million Americans do not have health insurance, which places an additional burden on health care reimbursement (the number of uninsured may change due to provisions in the Patient Protection and Affordable Care Act (ACA)). Patients without health insurance often do not seek care until they are very sick, which requires higher levels of care and higher utilization (e.g., emergency room (ER) visits, high-end radiological studies, etc.). For many uninsured, the ER—perhaps the most expensive setting in which to receive care—is the sole means of care. This requires states and hospitals to create uncompensated care pools for economically qualifying individuals. Uncompensated care pools lift health care costs through write-offs, increases in delivery costs, and higher premium rates.

For Payers, Quality Requires Value

As patients, when we consider the quality of our health care, we may think about how well trained our providers are, or how well equipped our local hospital is. But for those paying for health care on our behalf (employer-engaged insurance companies and the Centers for Medicare & Medicaid Services (CMS)), quality is defined as value received for the dollars spent. Payers don’t want to waste money on care that is medically unnecessary, care that is billed but not rendered, or treatments that are not proven.
In response, many payers have taken steps to implement quality-monitoring measures outside of the traditional-managed care model. For example, payers may create wellness programs and disease management programs to promote effective treatment methods and drive higher quality of care. Typically, payers will target high cost (often chronic) conditions such as diabetes, asthma, kidney disease, and heart failure, and create resources and tools to ensure that patients/members understand what quality care is and that participating providers are rendering the best care available. We know from quality measures that disease management is helping performance outcomes around many chronic conditions; however, health care costs continue to rise. Although helpful from a quality perspective, disease management is not enough to curb rising costs.

A New Response to Better Care and Contained Costs

Many payers (including CMS) are looking to evidence-based medicine (EBM), a widely applied principle of identifying treatments and practice habits that are proven to be beneficial, and are encouraging all practitioners to adopt these treatments and practice habits as a universal “gold standard” or “best practices.”
Before EBM, as new advances were made in medicine, it was assumed that the information would trickle down in meetings, seminars, and publications and that eventually all practitioners would become aware of the advances and adopt them. In reality, this model did not work. Providers trained one way generally stuck to what they knew, and were not eager to adopt new ways of practicing medicine.
In the 1990’s, the U.S. Preventive Health Services Task Force (USPSTF) was organized to review available medical data and make recommendations on which preventive services (Pap screening schedules, mammography screening, colonoscopies, etc.) should be applied to the entire population. Several medical groups, such as the American Medical Association (AMA) and the American Academy of Family Physicians (AAFP), decided to build on the work of the task force and identify meaningful diagnostic and medical treatments for a variety of conditions. Where double-blinded, controlled studies support a recommendation, it would have the highest rating. Where medical study or evidence supporting a treatment or service is lacking, the item would have the lowest recommendation (or would not be recommended at all).
For example, at one time patients complaining of low energy were commonly given 1,000 units of B-12 as an injection. Studies eventually showed that there was no appreciable benefit to B-12 injections; therefore, B-12 injections for a “boost” are not recommended. (CMS stopped paying for B-12 injections with a fatigue diagnosis many years ago.)

Finding the Middle Ground

Patient expectations can lead to difficulties in implementing EBM recommendations. For example: Studies have shown that X-rays for an acute ankle sprain, in the absence of other risk factors, are not necessary. Several medical groups are on record as advising against X-rays in the initial evaluation of an acute ankle sprain. Following EBM guidelines, providers would not routinely order X-rays for the average patient with an acute ankle sprain.
But what happens when you go to the ER with an ankle sprain? Almost always, your ankle will be X-rayed (and almost always, the X-ray will be normal). The patient wants reassurance, and the ER doctor does not want to risk being sued on the remote chance that he might miss a fracture. Patient pressure and medical liability worries result in an unnecessary X-ray. Hundreds of thousands of such unnecessary treatments are rendered every year.
EBM will likely ensure medical care improves in both quality and value. But based on our example, EBM might not provide the care the patient wants or the physician is comfortable providing. The goal is to find the point of equilibrium, where our health care delivery system offers quality and value, as well as improved outcomes. It will take time, patient and provider education, and control of liability exposure to incorporate EBM into everyday medical care.

How Quality Measures Enhance Value

Payers (CMS in particular) have turned to the reporting of  “quality measures,” most of which are based on a framework provided by EBM, to improve the value received for health care expenditures. Just after the turn of this century, CMS created the Premier Hospital Quality Improvement Project. It offered incentive payments to health professionals for reporting quality measures. You may have heard of this as “pay for performance” or “P4P.” The idea was to test the hypothesis that providers would report quality measures if they were paid extra to do so. It was a very successful experiment and proved that paying extra could produce the information CMS was seeking. From this experiment, the Physician Quality Reporting Initiative (PQRI) was born. PQRI has since become a permanent program, renamed the Physician Quality Reporting System (PQRS).
PQRS relies on “measures” tabulated over the course of a patient’s treatment. CMS realized it needed help from the medical community to determine what measures were important. EBM was used, wherever possible, as the guiding principle. The actual quality measures were developed by various medical organizations, such as the AMA, the American Gastroenterology Association (AGA), and others. These groups have put together several hundred measures that cover issues pertinent to most medical specialties and health care providers.
As an example of how a quality measure enhances value, consider the pneumonia vaccine. There is a quality measure for reporting that a patient is current on a pneumococcal pneumonia vaccine. If the patient is noted to be current at a visit, a code is added to the patient’s claim. If a provider finds that a patient is not current on his or her vaccine, he would administer the vaccine and report the code for that service, as well as a quality measure code for providing the vaccination. In this way, fewer patients will slip through the cracks and fewer Medicare patients will succumb to pneumococcal pneumonia. The value comes from the saved expenses of pneumonia treatment and hospitalization.

Quality Measure Reporting Requirements

Early indications are encouraging that reporting of quality measures will make providers less likely to overlook vaccinations (pneumonia, flu, tetanus, hepatitis B), preventive screenings (colonoscopy, Pap smear, mammography, PSA screening), counseling on health issues (smoking, obesity, fall risk), and treatments known to be effective for certain health conditions (statins for diabetes and heart disease, ACE inhibitors for congestive heart failure, aspirin for early myocardial infarction, anticoagulants for atrial fibrillation). A provider can pick several pertinent measures and report those for a year for the applicable patient encounters. The measures can be reported by either attaching a HCPCS Level II code to the claim for the encounter, submitting the information to a third-party registry, or through an electronic health record with PQRS reporting capability built in.
As an example, an endocrinologist may decide to report measures for diabetes. There are a number to choose from, but here are three that could be used:

  • DM: Hgb A1C with poor control A1C >9.0%
  • DM: LDL cholesterol controlled LDL-C < 100 mg/dl
  • DM: High BP controlled BP < 140/90

Three measures are selected because three is the minimum number of quality measures a provider can report to be eligible for a bonus payment. To successfully report these parameters, the provider must address and report these items once in the course of the year—ideally, for every patient seen with a diabetes diagnosis. To qualify for an incentive payment, the measures must be reported for at least 80 percent of the eligible encounters.
There is no way to track progress with CMS over the course of the year, and many providers only learn after the year has ended if they met the criteria for a bonus payment. Currently, the bonus is 0.5 percent of the total Medicare payments received by the provider for the year. Unless there are changes, the bonus is phased out after 2014. Starting in 2015, penalties will apply for providers who do not report or who improperly report quality measures. The penalty in 2015 is 1.5 percent, which will increase to 2 percent in 2016, and will be applied against ALL Medicare payments.
CMS is not doing much with the quality measures data it is collecting, but that will change. Right now, most of the measures seem to be aimed at making sure that important treatment guidelines are not overlooked (e.g., blood pressure goals and aspirin for heart attack victims, and certain drugs for heart failure and diabetes care).
Measures’ reporting is almost certainly here to stay. Note that PQRS preceded and is separate from the ACA law, so PQRS is not likely to be affected by changes in the ACA interpretation or implementation.
Next month, we will feature part two of this three-part series: The (R)evolution of the ACO.
Dr. Spain, MD, FAAFP, CPC, has worked in family medicine for over 25 years. In 1998, he founded Doc-U-Chart, a practice management consulting firm specializing in medical documentation. Dr. Spain can be reached at
Annie Boynton, BS, CPC, CPC-H, CPC-P, CPC-I, RHIT, CCS, CCS-P, CPhT, is the director of 5010/ICD-10 communication, adoption, and training for UnitedHealth Group. She is an adjunct faculty member at Massachusetts Bay Community College, and a developer and member of AAPC’s ICD-10 training team. Ms. Boynton frequently speaks and writes about coding, including ICD-10 and 5010 implementation.

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