Medicare Compliance & Reimbursement

CMS plans to launch a P4P demo for the home care industry--soon.

Providers can't just ignore pay for performance--the mechanism is gaining speed and could become a chief determining factor for Medicare payments sooner than providers think.

That was the message of multiple presenters at the National Association for Home Care & Hospice's annual policy conference in Washington, DC the last week of March.

The Centers for Medicare & Medicaid Services is shifting its payment policies for many provider types toward "quality and outcomes," noted Laurence Wilson, director of CMS' Chronic Care Policy Group, in a March 27 CMS panel on regulatory and policy issues. Pay-for-performance models are an important part of that focus, Wilson told attendees.

In particular, CMS plans a demonstration project to test a home care P4P model, Wilson revealed. After thorough research and model testing, CMS would roll out a P4P model to the entire industry.

"This is really an imminent change in the payment system," agreed Sharon Bee Cheng, senior analyst for the Medicare Payment Advisory Commission, in a separate March 27 presentation focusing on P4P. Congress has essentially made up its mind to implement P4P and is merely working out the details now before passing requirements, Cheng told conference attendees.

A home care P4P model will first have to nail down major details, however. Congress and CMS must decide on which measures they will judge--and pay--agencies. MedPAC recommends starting with the current outcome- based quality improvement (OBQI) measures agencies are using, particularly those on Home Health Compare, Cheng notes.

But P4P shouldn't end with OBQI measures, Cheng suggests. Instead, the program should evolve to also include patient "experience" measures and process-based measures, which MedPAC appears poised to endorse in its June report to Congress.

Providers actually prefer process measures because they have direct control over them, said Amanda Twiss, president of Seattle-based benchmarking company Outcome Concept Systems, in the same presentation. On the other hand, many factors outside of an agency's control tend to influence patient outcome measures.

P4P measures should be industry accepted, evidence-based, based on data collected with a standardized tool and risk adjusted, Cheng says. And providers should be able to improve on them. "We want as great an impact on as many patients as we can," she notes. Moving a score from 98 to 99 percent "is not a lot of bang for the buck." P4P Bonus Size, Structure Could Divide Providers

P4P programs for private payers range from a 1-percent bonus to as much as 10 percent, Twiss notes.
 
MedPAC recommends starting with a small portion of payments that grows over time, Cheng says. A good place to start might be shaving 1 percent of payments off the base episode payment rate to form an award pool. Agencies could receive [...]