MedPAC Encourages Choice of High Quality Providers

Regulation | September 13, 2017 | by Aaron Tripp

Of particular interest to LeadingAge was the Medicare Payment Advisory Commission’s (MedPAC) September session on encouraging beneficiaries to use higher-quality post-acute care (PAC) providers. It included options for commission consideration. LeadingAge supports efforts that would provide meaningful quality information to beneficiaries while highlighting long standing critiques of the 5-star systems that are components of Nursing Home and Home Health Compare.

MedPAC continues to be a critic of the Medicare PAC system. September’s presentation highlighted the frequency and high expenses, approximately $58 billion in 2015, of PAC following hospital discharges. In many markets, there are multiple options for beneficiaries receiving care from skilled nursing facilities (SNF) and home health agencies (HHA). It was noted that 86% of beneficiaries live in an area served by 5 or more HHAs. Beneficiary choice of a PAC provider has not been significantly influenced by quality data that has been made publicly available by CMS was a key point made. An analysis by MedPAC staff indicated that 47% of SNF patients and 70% of HHA patients had 5 or more “higher quality” providers available within a 15-mile radius. Commissioners cautioned staff to be careful and deliberate in how they define “higher quality” and for whom it matters.

The discussion centered around options that modify Medicare’s discharge planning guidance to hospitals and options that create financial incentives for hospitals and PAC providers. Options under modifying discharge planning guidance included:

  • Modify discharge planning rules to allow hospitals to recommend PAC providers
  • Require planners to consider PAC facility quality in the development of discharge plans
  • Require that hospitals provide quality data to beneficiaries seeking PAC

Options under creating financial incentives for hospitals and PAC providers included:

  • Expand the Hospital Readmissions Reduction Program (HRRP) to apply to more conditions
  • Implement PAC value-based purchasing programs (VBP) beyond SNFs

The discharge planning suggestions were framed and near-term solutions while financial incentives were framed as longer-term options.

Commissioners offered greater support for empowering hospital discharge planners to play a more proactive role in recommending higher quality PAC providers. However, many expressed concerns with the existing Nursing Home and Home Health Compare websites and the information that they provide. LeadingAge does not support the existing methodology of the 5-star systems that fail to create national standards for high quality care. Commissioners highlighted key components that influence choice of PAC that are more meaningful to beneficiaries than a 5-star rating. These components included geographic proximity to family and friends, reputation of providers, specific quality measures such as outcomes by diagnostic group or prevalence of pressure ulcers.

LeadingAge recommends Congress to direct CMS to develop national quality criteria on which 5-Star ratings for all SNFs would be based. The Government Accountability Office shares this recommendation.  LeadingAge also recommends this approach for all HHAs. The 5-Star rating system should not include a bell curve. Every provider should have the potential to achieve a 5-Star rating by providing the highest-quality services. The Nursing Home and Home Health Compare websites should be revised to reflect quality measures individually to allow greater transparency for beneficiaries and discharge planners.

Commissioners seemed to be more reluctant to offer support for the expansion of the current financial incentives. It was noted that PAC quality was not accurately captured by readmissions measures. Additionally, while a few noted the potential of VBP, it was stated that the potential has yet to be realized and the models need work before further use.

LeadingAge supports the concepts behind the value-based purchasing program because it measures the reduction in avoidable rehospitalizations, a measurable indication of quality. However, value cannot be achieved by withholding the resources nursing homes need to hire staff and meet other essential expenses to deliver high-quality care.