Making the Business Case: P4P and Medicaid Update

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Making the Business Case P4P and Medicaid Update

• Barbara B. Manard, Ph.D
• American Association of Homes and Services for
  the Aging

2
2005 Summit Roadmap

• Discussions on Making the Business Case led to
  recommendation
• Advocate for and identify funding
  mechanisms/incentives, including IT use in pay
  for performance programs

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P4P A new idea? NOT

• If a physician makes a large incision with an
  operating knife and cure it, or if he open a
  tumor (over the eye) with an operating knife, and
  saves the eye, he shall receive ten shekels in
  money.
• If a physician makes a large incision with the
  operating knife , and kill him, or open a tumor
  with the operating knife, and cut out the eye,
  his hands shall be cut off.
• ---Code of Hammurabi, c. 1750 B.C.

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Some Approaches

• Direct payment for the actual or partial cost of
  a good thing, (e.g., implementing IT,
  participating in reporting, higher staffing)
• Bonus payments for achieving standards (Medicare
  hospital demo Illinois QUIPP program for NFs
  San Diego Experiment)
• For incentives to IT adoption, standards might
  include IT, so that extra points are awarded
• Or, if tracking progress toward some goal works
  better with IT, then indirectly P4P encourages
  adoption of IT
• BOTTOM line-this indirect approach is the one
  currently recommended by key reports

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Current Medicaid P4P Activity

• Great interest talk but, very little has been
  implemented.
• The little that has been implemented is
  constrained by limited budgets, inadequate data
  sources difficult technical issues.
• State, Industry and Consumer representatives
  involved in development of systems. Measures
  reflect what they value. Staffing is always in
  the mix. Use of MDS QIs less emphasized
  (reliability issues).

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Overview of Recent State Incentive Payment
Programs

• Implemented Programs
• Iowa- Accountability Measures (AM) payment
  incentive program implemented 2001.
• Texas- ran a Performance-based Add-on Payment
  (PBAO) program for 2 years, FY01 FY02. Continue
  to have a voluntary Staffing enhancement program.
• Vermont- Quality Incentive Award program
  implemented 1999. Maximum number of awards is 5.

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Overview of State Incentive Payment Programs

• Developing Programs
• Minnesota- implemented alternative payment system
  in 1995. Started development of Value Based
  Reimbursement System in 2001. Still at work
• Colorado- 3rd year of work discussions
• Oklahomacontract to develop

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AHRQ study of HIT and MedicaidApril 2007

• Concludes
• Medicaid populations could see significant
  improvements in quality and outcomes with
  appropriate use of HIT and HIE
• Key issues, however, need to be addressed,
  including
• Clarifying the business case
• Development and demonstration of mechanisms to
  support HIT adoption by providers
• For more information www.ahrq.gov AHRQ
  Publication No. 07-0046

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Meanwhile, back in Washington.

• 2003
• Congress directs Institute of Medicine to
  identify and prioritize options for aligning
  performance with payment in Medicare
• 2005
• Congress tasks MedPAC with recommending options
  for HHA P4P
• 2003-2006
• S/NF industry sponsors various bills linking
  expected changes in rates (removal of add-ons)
  to P4Pnone pass
• Senate Finance bill Implement Medicare P4P
• -- Amended but hold off on SNFs for now

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IOM Report (2006) Recommends

• Implement P4P in Medicare through a gradual and
  phased approach that varies by setting, amount of
  reward, and measure
• For providers with suitable existing measures
  such as hospitals, Medicare Advantage Plans, and
  HHAs implementation should begin immediately.
• --Although SNFs are already publicly reporting
  data to CMS, the performance measures reflecting
  treatment of Medicare beneficiaries are not yet
  suitable for pay for performance
• Medicare should initially (next 3-5 years) derive
  money from existing funds, except for physicians
• Recommendation 9 Because electronic health
  information technology will increase the
  probability of a successful pay-for-performance
  program, the Secretary of DHHS should explore a
  variety of approaches for assisting providers in
  implementation of electronic data collection and
  reporting systems to strengthen the use of
  consistent performance measures
• For more detail http//www.iom.edu/CMS/3809/19805
  /37232/37236.aspx

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MedPAC ReportJune, 2007

• Discusses options for HHA P4P
• Recommends that P4P include measures of the
  functions supported by IT (e.g., a system to
  track test results, system to monitor patients by
  disease)
• When health professionals are encouraged by
  best practices to assess, record, use, and share
  more informationwider use of technology may
  result
• For more detail WWW.MedPAC.gov

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and for even less immediately encouraging news

• P4P movement is slowed by growing evidence of
  limitations of P4P (as implemented to date) to
  effect change
• IOM identified c. 100 programs in last decade
• Few are evaluated only 17 published studies of
  reasonable quality
• In most there was no effect
• 5 demonstrated positive effects
• 1 demonstrated negative results
• New England Jo of Med, Feb 2007 Analysis from
  Medicare hospital demonstration raised more
  questions about the cost-effectiveness of P4P
• JAMA, June 1Researchers at Duke University
  examined heart attack treatments at 500 hospitals
  and found that hospitals receiving financial
  incentives to follow treatment guidelines didn't
  improve their practices significantly more than
  hospitals that got no financial benefit