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CMS unveils proposed list of 'no-payment' conditions
Observers say greatest impact will be on coding and documentation
As the Centers for Medicare & Medicaid Services (CMS) began unveiling the details of is value-based purchasing plan (see the cover story in the July 2007 issue of HBQI), knowledgeable observers were waiting for the "other shoe" to drop. Well, now it has.
In a proposed rule, published in the May 3 Federal Register, CMS suggested eliminating hospital reimbursement for a group of preventable complications. (Under Section 5001(c) of Public Law 109-171 [the Deficit Reduction Act of 2005], the secretary of the Department of Health and Human Services must select by Oct. 1, 2007, at least two hospital-associated medical conditions for which hospitals will not be paid.)
In the proposed rule, CMS identified 13 conditions that may be included on the non-payment list:
The first six conditions are being considered by CMS for "initial" implementation, which is set to begin Oct. 1, 2008; the other seven conditions may be future candidates, but CMS says additional development and research is needed before a final decision is made. According to CMS, all six conditions identified as eligible for initial implementation are either high volume, high cost, or both; largely preventable by following established guidelines; and identifiable using ICD-9 codes.
Observers, by and large, do not object to the principle behind this decision; they recognize that many hospital-associated infections (HAIs), for example, are preventable. They are, however, concerned with how difficult it might be to demonstrate that certain conditions existed upon admission — and to clearly document the finding so as to ensure reimbursement.
Indeed, this move could have a significant impact on hospital revenues. For example, at the first annual serious event report by the Indiana Patient Safety Center, presented April 11, the following were the most frequently reported events:
A 'watershed' in thinking
"This is a fascinating issue and a complicated problem," says David B. Nash, MD, MBA, chairman of the department of health policy, Jefferson Medical College in Philadelphia. "Here's what we know, and what we don't know: Clearly, sepsis is a hospital acquired infection and the result of a failed process. Run-of-the-mill [urinary tract infections] without sequallae clearly could be a failed process, and especially with certain patients who may be predisposed to it. An infected Foley [catheter] is a failed process, but you can get [infections] other ways.
"We have research evidence today that, in general terms, the majority of hospital-acquired infections are not the result of severity of illness on admission, but are the result of multiple failed processes," he continues. "This marks a watershed in our current thinking about HAIs."
In the past, Nash explains, such infections were viewed as a toxic byproduct of day-to-day work in the hospital — "smoke up the smokestack," if you will. "But there are hospitals with zero central line-associated blood infection rates," he notes. "If they can achieve 0%, that's proof it is process, process, process. In other words, we can have a 'smokeless factory.'"
But by withholding reimbursement in certain cases, while rewarding hospitals financially in other cases, isn't CMS "giving with one hand and taking with the other?"
"That is correct," says Nash. "But it is the avowed intent of the Department of Health and Human Services that this be budget-neutral."
"It's still a form of P4P — or, if you will, no pay for no performance," asserts Patrice L. Spath, of Brown-Spath & Associates in Forest Grove, OR. "I view the whole transparency issue as a form of P4P — hospitals fear losing market share if consumers see their performance is not as good as someone else's."
Worried about coding
Attendees at a recent industry meeting in Nashville, TN, were more concerned about coding problems associated with the proposal than the actual issue of prevention, notes Spath. "It seemed the issue they were most concerned about was coding, because of how hard it is to know if something is present on admission," she notes. "If it is not documented at the time but is documented later on, it will look like something that the hospital caused."
For example, she notes, if a patient comes to a hospital from a nursing home with an infection, but does not become symptomatic until three days later, "it looks like we're responsible."
Which, from the clinician side, does raise the question of whether all of these infections are truly preventable, says Spath. "It's a difficult barrier to overcome," she asserts.
Deborah K. Hale, CCS, president of Administrative Consultant Service LLC, a Shawnee, OK-based company that assists hospitals with clinical documentation improvement and quality issues, agrees. "One of the biggest issues is making sure the patient had the condition when they came in, and it's not an easy thing to do — there is usually very poor documentation," she notes. "When a patient is admitted for pneumonia, for example, there is very little documented about early skin breakdown, so it will look like it was not present on admission and count against the hospital."
In addition, Spath says, several years ago The Joint Commission quality standards "Said 'measure your performance, and do not do anything [else] until you reach a trigger threshold.' It's very much ingrained in the health care profession that a certain amount of people will get infections, and it's difficult to overcome that mindset."
But overcome it they must if they are going to optimize reimbursement, say observers — especially as the coding challenge deepens. "It's more than likely that hospitals will experience a financial impact," says Hale.
She notes that 80% of all Medicare discharges now have a CC (comorbidity and complication) condition secondary diagnosis that has been statistically shown to increase length of stay at least one day in at least 75% of patients. "With a CC, that currently means a substantial increase in the hospital's reimbursement because of a secondary diagnosis," says Hale. That will continue to be true, she notes, but the definition of a CC likely will be more limited.
Looking at the proposal, and at the move to a severity-adjusted DRG, Hale makes the following comparisons:
This move to a severity-adjusted DRG methodology, adds Hale, "is part of the whole value-based purchasing program." Hale agrees that CMS seems to be giving with one hand while taking with another. "That's really accurate — if you could have prevented [the condition]," she says. "Basically they're saying, 'We will not pay you for things you caused.'"
The burden, she emphasizes, comes all the way back to the hospital. "It's all about documentation being accurate on admission, and doing the preventive care that is needed," she says. "CMS said in the proposed rule they believed hospitals would make a much greater effort to evaluate these patients more closely on admission to determine whether or not there is evidence [of infection upon admission]."
Great role for quality manager?
Hale and Nash believe this new reality will increase the importance of the quality manager. "This moves the work of the quality manager front and center," Nash asserts. "There is an immediate new economic implication; every CEO now has a deep and abiding interest in measuring and improving quality, so the quality manager is more important than ever."
"This certainly will put more importance on what quality managers do because the hospital has potential to lose money," adds Hale. "The key will be that the quality manager or case manager will need to make sure those patients who have these conditions are adequately documented as they present on admission. If they are, there will be no payment penalty. If the condition develops during the course of their hospital stay, there will be."
"If anything has the potential to affect the financial side with quality of care, that naturally raises the importance of quality and patient safety," says Spath, but she notes that the focus should not be on the quality manager alone. "I use the phrase, 'It takes a team,'" says Spath. "It can't just be the quality manager who owns the responsibility — just like it's not just the quality manager alone who is responsible for compliance with CMS measures or Joint Commission standards." While quality managers often are the facilitators of the team that gets together to work on improvement, notes Spath, "It can't be solely owned by them."
The same goes for accurate coding, she continues. "While they may be expanding the DRGs, it really does not matter what the external pressures are; good documentation takes a team," says Spath. "They could add more codes, or take some away, but there are some basic fundamentals of good documentation, as well as evidence-based practices to limit the likelihood of these things occurring."
People had better pay close attention to this issue, she warns, because the CMS proposal is likely just the first of many. "If Medicare starts to do this, other insurers will start to as well," she predicts.
[For more information, contact:
Deborah K. Hale, CCS, President, Administrative Consultant Service LLC, 678 Kickapoo Spur, P.O. Box 3368, Shawnee, OK 74802. Phone: (405) 878-0118. Fax: (405) 878-0411. E-mail: DeborahHale@acsteam.net. Web: www.acsteam.net.
David B. Nash, MD, MBA, Chairman, Department of Health Policy, Jefferson Medical College, 1015 Walnut St., Suite 115, Philadelphia, PA 19107. Phone: (215) 955-6969. E-mail: firstname.lastname@example.org.
Patrice L. Spath, Brown-Spath & Associates, P.O. Box 721, Forest Grove, OR 97116. Phone: (503) 357-9185. E-mail: Patrice@brownspath.com.]