Chicago, IL—Value-based purchasing (VBP), a program created by the Affordable Care Act (ACA) and administered by the Centers for Medicare & Medicaid Services (CMS), uses pay for performance for hospital payment of inpatient acute care services to shift the emphasis to paying for care quality not quantity. Physicians should understand VBP, because it represents an opportunity to work with hospitals to increase their own compensation, said Gregory D. Timmers, MD, Prairie Cardiovascular Consultants, Springfield, OH, at the 2012 American College of Cardiology meeting.
Physician compensation is changing in concert with changes in healthcare delivery. The shift of ancillary services from the physician office to the hospital outpatient setting is one example of decreasing revenue for physician groups. Dr Timmers advised physicians to be proactive and engage with hospitals regarding VBP to reduce costs and improve resource utilization, with savings being a metric for reimbursement to offset lost revenue streams.
The majority of the initial clinical process care measures are cardiology related, representing a concrete opportunity for cardiologists to lead. VBP begins in October 2012 (fiscal year 2013).
VBP and Care Integration
VBP, along with accountable care organizations (ACOs), is part of a new concept established by CMS—a care model that moves from volume to value. Physicians and ACOs will be accountable for quality and efficiency, including lower costs per patient encounter and per capita (ie, utilization) and improved coordination across the care continuum. CMS has 3 stated aims with VBP—better care for individuals, better health for populations, and lower per-capita costs. Regardless of the disposition of the ACA, a private– public dynamic related to quality and costs will continue, said Dr Timmers.
The VBP program has 2 components—compensation for core measures (70% of total score) and compensation for patient satisfaction (30% of total score). The development of the core measures began in 2002 by the Joint Commission and CMS. The VBP core measures are a subset of this list of full core measures. A large proportion of the core measures are based on cardiovascular (CV) components, which Dr Timmers said is not surprising, because CV care comprises approximately 40% of the Medicare dollars spent.
Provider-based billing incentivizes the integration of care providers (ie, hospitals and physicians) and better decision-making for healthcare expenditures by patients who will be paying more through deductibles and copays under healthcare reform. The movement of ancillary services to the hospital from the physician office is one motivator for integration.
A notable change that is coming for cardiologists, as part of the population- risk management goal, is that CMS is first increasing costs to patients and then directing patients to the provider who can deliver their CV care, rather than patients selecting their provider. This will have a significant impact on cardiologists, because an estimated 60% to 65% of their current patient population comprises Medicare patients.
How VBP Works
VBP represents a continuation of the existing inpatient quality reporting. Value-based payments are made to hospitals that meet performance standards. Initially there are 12 core clinical measures and 8 patient satisfaction measures, called HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems). In year 1, there is a 1% reduction in diagnosisrelated group payments to the hospital in fiscal year 2013, increasing 0.25% annually up to 2% at 5 years.
VBP is a revenue-neutral program, with Medicare withholding payments and hospitals earning back funds based on the performance measures. HCAHPS represents an effort by Medicare to ensure that patients who are directed to specific hospitals or physician groups are receiving fair, equitable, and good care, according to Dr Timmers.
How Does VBP Impact Physicians?
Care integration strategies and the employment of physician groups represent the greatest impacts on physicians. Physicians excel at coordinating delivery of care and providing high patient satisfaction. One approach is for physicians to work with the hospital to substitute these new VBP measures, which have real dollars attached to them, for the current metrics used for physician compensation.
A recent survey by MedAxiom shows that of the hospital-acquired physician groups, 57% have incentives to improve quality and 47% have incentives to improve other metrics. Cardiologists can use the VBP components that have compensation from Medicare for these incentives, Dr Timmers recommended.
Medical director agreements and CV comanagement agreements also include bonus options and represent an opportunity to include VBP performancebased measures required of hospitals; physicians increase their compensation, and hospitals meet their mandates.
Physician groups that include the VBP revenue component in their agreements with hospitals have the potential to recoup revenue lost when ancillary services were moved to the hospital. The shift to value-based care will continue, and understanding the various programs and incentives will benefit the CV community.