Tuesday, 28 June 2016 05:16

Time Running Out to Improve Hospital VBP Performance in Current CMS Period

Written by Debbie Linnes and Sylvia Coolidge Moore

Many hospitals feel that they do not have the depth of statistical forecasting required to track the multitude of metrics and continuous changes required by Centers for Medicare & Medicaid Services (CMS) pay-for-performance guidelines. We find that many executive teams are feeling challenged by the complexity of forecasting their performance and presenting this data to a diverse audience.

With this in mind, DCCS Consulting recently developed an executive pay-for-performance tool using concurrent data supplied by the Health System and the latest publicly available data from CMS. This tool clearly highlights data that the executive team needs to facilitate decision-making to optimize performance.

As the reimbursement for value-based purchasing (VBP) is based on a competitive bell curve, we advise clients to be focused on the movement of the database – and also the movement of their competitive market.

As this data is updated quarterly, reflecting individual hospital performance, DCCS pay-for-performance clients have the benefit of knowing how they are positioned in real time related to the performance of their identified competitors and the CMS database. The tool generates reports that offer providers quarterly updates from the CMS database, yielding the advantage of immediately seeing how the national performance bell curve has moved, how their performance has improved relative to the national performance, and the impact on financial forecasting. Additionally, it updates key opportunities for improvement, provides updated financial forecasting, and identifies the clear strategic opportunities within their competitive market.As an example, we recently compiled the most current, publicly available CMS data and presented our client, a for-profit, 500-plus-bed facility, the DCCS Pay for Performance Executive Report to identify focus areas for quality and financial improvement.  

We were quickly able to identify a total reimbursement opportunity of over $5 million. Our assessment of this facility also identified that over $1.2 million of the total potential reimbursement of $5 million was solely derived from the hospital-acquired conditions forecasted penalty.

Additionally, for this client, we forecasted a $1.4 million penalty from VBP. On average, each of the four performance domains that comprise VBP was estimated to represent a $350,000 reimbursement opportunity.

Drilling down into our clients’ data, we identified four key areas of focus to dramatically impact financial reimbursement: hospital-acquired conditions, clinical care safety, patient experience, and performance in the emergency department.

Our clients have found that having the right tool to provide a simple, easy-to-understand report for all audiences, and a team that works with leadership to develop a sustainable model to improve performance, has resulted in significant improvement in quality and financial performance.

Historically, we have found that:

  • Organizations are surprised by their pay-for-performance financial results due to an inability to accurately forecast.
  • Hospitals’ c-suites are told that improvements are being made only to learn when the hospital compare data is reported that the improvements have not resulted in significant change.
  • Selected areas of focus have not changed the financial penalties.
  • Improvement was made, but because the magnitude of improvement has not kept pace with the national pace of improvement, financial penalties do not decrease. Thus, the organization remains below median performance.
  • Many hospital executives do not understand the quality and financial impact because the organization does not have an effective communication tool.
  • Patient experience improvements made on inpatient units do not have expected impacts due to ED performance.

The DCCS Pay for Performance Executive Report:

  • Clearly shows the financial loses or gains attributable directly to each component of pay-for-performance.
  • Provides performance benchmarks nine months before public data is available.
  • Provides a competitive analysis of provider performance in your market.
  • Demonstrates the most recent emergency department performance comparatives.
  • Reports the national rate of change for each performance parameter quarterly.
  • Clearly shows the areas of focus that will deliver the greatest impact on quality, safety, and financial performance.
  • Demonstrates improvements in outcomes against national improvement on a quarterly basis.
  • Forecasts the impact of quality improvement and the resulting financial impact.
  • Includes facilitating team analysis and interpretation of quarterly hospital data.
  • Provides a simple, visual, easy-to-understand report for all audiences, allowing the organization to engage staff, management, executives, and the board in quality and safety improvement.

We find that most health systems don't actually know how they are performing. The old standby pay-for-performance reports do not forecast results, do not link to the health system's financial data, and do not monitor and compare regional competitors.

Tools such as these represent a new way of thinking about financial improvement and performance.

About the Authors

Debbie is a Partner and Chief Operating Officer for DCCS. She has a broad background of CEO, COO, Operations leadership in systems (CHW, SCLHS, CHI) and free standing health systems across the country. She brings experience in moving organizations forward to Consulting and Interim senior leadership and operating positions and has a strong strategic and clinical background with outstanding physician relations skills. She rejuvenates underperforming organizations and programs, raising performance and profitability and develops leadership and workplace cultures that lead to high levels performance and employee satisfaction. Core skills include: Vision/Strategic Planning, Operations Improvement, Physician Practice Operations, Leadership Development, Clinical Quality/Patient Safety, Service Excellence, Service Line Development, Population Management, Mergers/Acquisitions, Physician Alignment, Ambulatory and Physician Services, Workplace Culture Development.

Sylvia Coolidge Moore is an experienced hospital executive (COO) leading operations across a range of organizations from large to medium size for over 20 years. As the COO she has led organizations to adopt performance improvement and patient safety as key organizational priorities. She has guided boards, executives, management and staff through education and understanding of High Reliability No Harm Health Care, Pay For Performance Requirements and the financial rewards and penalties imposed by CMS. She has led the adoption of a High Reliability No Harm Health Care culture commitment, organizational assessment and cultural change priorities and actions. Additionally she has led organizations to significant improvement in Value Based Purchasing, HAC and Readmission Reduction parameters of the CMS Pay For Performance System. Most recently she has established a private consultancy service (FE3 Catalytics) focusing on her two passions in healthcare: High Reliability No Harm Healthcare and Patient Experience.

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Last modified on Tuesday, 28 June 2016 05:40