Discussion: Measures of Healthcare Quality

A Lack of Standardization: The Basis for the Ethical Issues Surrounding Quality and Performan Suchy, Kirsten Journal of Healthcare Management; Jul/Aug 2010; 55, 4; ProQuest Central pg. 241 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Discussion: Measures of Healthcare Quality

The Health Care Manager Volume 37, Number 2, pp. 129–135 Copyright # 2018 Wolters Kluwer Health, Inc. All rights reserved. Provider Reimbursement Following the Affordable Care Act Brandon Bowling, RN, SRNA; David Newman, RN, SRNA; Craig White, RN, SRNA; Ashley Wood, RN, SRNA; Alberto Coustasse, MD, DrPH, MBA, MPH Decreasing health care expenditures has been one of the main objectives of the Affordable Care Act. To achieve this goal, the Centers for Medicare and Medicaid Services (CMS) has been tasked with experimenting with provider reimbursement methods in an attempt to increase quality, while decreasing costs. The purpose of this research was to study the effects of the Affordable Care Act on physician reimbursement rates from CMS to determine the most cost-effective method of delivering health care services.

The CMS has experimented with payment methods in an attempt to increase cost-effectiveness. Medicare has offered shared cost-savings incentives to reward quality care to both primary care providers and preventative services. The CMS has determined fee-for-service payments obsolete, opting instead for a value-based purchasing method of payment. Although a universal payment method has yet to be adopted, it has been evident that a value-based purchasing model and preventative care can be used to decrease health care expenditure. Key words: Affordable Care Act, Centers for Medicare and Medicaid Services, fee-forservice, physician reimbursement, value-based payments N 2014, THE United States spent $3 trillion, 17.5% of the nation’s gross domestic product, on health care.1 In addition, according to the Centers for Medicare and Medicaid Services (CMS), Medicare expenditures totaled $618. Discussion: Measures of Healthcare Quality

7 billion and Medicaid expenditures totaled $495.8 billion—or 20% and 16% of the nation’s health care expenditures, respectively.1 The Affordable Care Act’s (ACA’s) goals upon enactment were to slow the rising cost of health care and encourage a more efficient and higher-value health care delivery system.2 The best way to contain cost over the next 5 I Author Affiliation: Healthcare Administration Program, Marshall University Lewis College of Business, South Charleston, West Virginia. The authors have no funding or conflicts of interest to disclose. Correspondence: Alberto Coustasse, MD, DrPH, MBA, MPH, Healthcare Administration Program, Marshall University Lewis College of Business, 100 Angus E Peyton Dr, South Charleston, WV 25303 (coustassehen@marshall.edu). DOI: 10.1097/HCM.0000000000000205 to 10 years is through reformed provider payment to gradually decrease fee-for-service (FFS) payments.3 To lower costs, the ACA has embraced efforts to move away from volume-based FFS reimbursement and linked government payments for health services to provider performance.4 The ACA tasked CMS with establishing a value-based payment modifier that could be applied to a select group of physicians by January 1, 2015, and to all physicians by January 1, 2017.5 This value-based purchasing (VBP) system was designed to reward physicians who exceedingly provided quality care in a cost-effective manner and penalize those physicians who did not provide cost-effective care.6 Physicians were provided a 2% bonus for quality care delivered or a 1% fee for poor quality of care.6 Accountable Care Organizations (ACOs) have been key to the ACA achieving quality care at decreased costs.7 According to Perez7 (2014), the Congressional Budget Office estimated that ACOs could save Medicare $5.3 billion between 2010 and 2019. Accountable Care Organizations have encouraged collaboration 129 Copyright © 2018 Wolters Kluwer Health, Inc. All rights reserved. 130 THE HEALTH CARE MANAGER/APRIL–JUNE 2018 and integration of care among a group of providers who managed the care and who are responsible for the cost of this care. Discussion: Measures of Healthcare Quality

They received their funding in one of three ways: an upfront fixed payment, an upfront variable payment, or a varying monthly payment depending on the size of the ACO.8 Regardless of the method of funding, providers who have created these ACOs have been able to share in the financial savings accrued under the Medicare Shared Savings Program of the ACA.4 According to the US Department of Health and Human Services,9 20 million adults have gained health coverage under Medicaid expansion. Approximately 70% of these patients were enrolled in an ACO or other managed care programs where providers have been reimbursed through a capitation system, with rates established by each state.10 In addition, FFS physician payments have represented the minority of Medicaid payments; however, these payments have been made at a percentage of what Medicare pays for equivalent services.11 According to the Kaiser Institute, Medicaid has paid 66% of what Medicare paid for equivalent services when comparing FFS payments.11 Low reimbursement and varying rates from state to state have resulted in physicians in the most populous states, including Florida, California, and New York, refusing to accept Medicaid patients.12 The ACA created the Center for Medicare & Medicaid Innovation, which allowed CMS to conduct experiments with a wide range of payment methods.3 For example, by 2018, 50% of Medicare payments must be alternatives to FFS payments, focused on a VBP model.13 Whatever the model, the payer system must provide some incentive for physicians and providers to change their behavior. Many physicians’ behavior has been explained by rational economics; by shifting the paradigm of incentives, the mindset of physicians also changes from a volume-based approach to a value-based approach.14 The purpose of this research was to study the effects of the ACA on physician reimbursement rates from CMS to determine the most cost-effective method of delivering health care services. METHODOLOGY This research project has been accomplished via literature review. The Marshall University Library database was used for reference identification. The databases specifically used were CINAHL Complete, MEDLINE (Proquest), and PubMed. In addition, Google and Google Scholar search engines were used for additional references not available through Marshall University Library databases. Centers for Medicare and Medicaid Services, The Kaiser Family Institute, and Department of Health and Human Services Web sites were used as well. Online searches were conducted using keywords ‘‘ACA’’ and ‘‘physician reimbursement’’ and ‘‘CMS,’’ or ‘‘CMS,’’ or ‘‘fee for service,’’ or ‘‘value-based payments.’’ Article abstracts were screened before review for relevance and content. The research was limited to the English language. The literature sought was between the dates of 2009 and 2016. In total, 32 sources have been used to complete this article. The research was conducted by B.B., D.N., C.W., and A.W. and was validated by A.C., who acted as a second reader and verified that references met inclusion criteria. RESULTS Medicaid expansion under the ACA Medicaid has been the largest source of insurance among American families, providing coverage to more than 66 million people in 2014.15 The ACA originally mandated that Medicaid provided coverage to any person with an income less than 138% of the federal poverty level, but this mandate was overruled by the Supreme Court in 2012 allowing the individual states to decide whether they would expand Medicaid coverage.16 Medicaid expansion and the ACA have been credited with decreasing the amount of unpaid hospital care services by $7.4 billion dollars from 2103 to 2014.17 This was accomplished by the 28 states and Washington, DC, that expanded Medicaid coverage during this period.17 Discussion: Measures of Healthcare Quality

A study that took place in 2014 among a hospitalist group in Colorado, a state that chose to expand Medicaid, has shown a decrease Copyright © 2018 Wolters Kluwer Health, Inc. All rights reserved. Provider Reimbursement Following the ACA from 18.4% to 6.3% in uninsured encounters while showing a very significant increase in Medicaid-insured encounters from 17.3% to 30%, which has resulted in an increase of $3.38 per visit in compensation among this hospitalist group between 2013 and 2014.17 These researchers have found a smaller but still significant decrease from 14.1% to 13.3% in the overall number of private payer encounters, which has been considered a contributor to the increase in compensation. Lower reimbursement of Medicaid programs, only 58% of what Medicare reimbursed, had inspired a 2-year reimbursement increase of an estimated 73% to providers that had accepted Medicaid patients, which has had a positive response, but this increase expired in 2014 and was not renewed.15 This study also suggested that the removal of reimbursement incentive removed provider motivation to accept Medicaid patients stating that, of the 85% of physicians accepting new patients, only 65% had accepted Medicaid patients. Aside from the low reimbursement rates, providers have reported several other obstacles that have prevented them from providing care including complex program and billing requirements, delayed payment process, and difficulty of working with patients with a high level of social and health risk.15 Medicare quality of care incentives Claffey et al18 (2012) examined 750 Medicare members at a hospital in Portland, Maine, regarding the effects of Medicare quality of care pertaining to provider reimbursement. The authors reported before the ACA and focus on accountable care; the hospital noted nearly 24% readmission rates among Medicare patients. Similarly, financial rewards for quality care have accounted for less than 5% of Medicare providers’ yearly salary practicing in this hospital. After the enactment of the ACA and motivation for accountable care, these authors had noted a nearly 20% decrease in readmission rates along with increased provider reimbursement for quality care measures. In 2011, Medicare readmission rates dropped to less than 18%. Correspondingly, quality of care payments for Medicare providers increased to nearly 10% of yearly salaries. 131 Free preventative care reimbursement and financial implications for providers Koh and Sebelius19 (2010) examined aspects of the ACA and promoting preventative care of Medicare patients. Before the ACA, Medicare patients used only half of the preventative care services available in the United States. Nearly 80% of Medicare patients neglected preventative care services because of exceedingly high out-of-pocket costs associated. Discussion: Measures of Healthcare Quality

A direct correlation between the minimal utilization and truncated Medicare reimbursement for providers was noted. These authors polled providers and found that nearly 60% of preventative care providers refused to accept new Medicare patients because of low reimbursement concerns. To combat this issue, the ACA has removed out-of-pocket costs for free preventative services and declared full Medicare reimbursement for these services to providers. A nearly 25% increase in preventative care utilization among Medicare patients was noted in 2010. Ultimately, a 25% increase in Medicare patient utilization and full Medicare reimbursement for preventative care has resulted in a nearly 20% increase in provider income. Bodenheimer20 (2006) illustrated, before the ACA, that primary care providers noted income increases of nearly 21% whereas specialists noted income increases of nearly 38%. This has resulted in a 50% decrease in primary care residency among medical schools. Despite the low number of primary care providers, nearly 90% of Medicare patients sought initial consultation and preventative services with primary care providers. After implementation of the ACA, primary care providers described income increases of nearly 30%. This financial incentive has subsequently resulted in a 20% increase of primary care residents in medical school. Financial incentives to Medicare providers Basu et al21 (2015) depicted a financial incentive for primary care providers created by the ACA. Previously, Medicare providers could only bill for face-to-face services provided. The ACA granted primary care providers non–visitbased payments for care of chronically ill Copyright © 2018 Wolters Kluwer Health, Inc. All rights reserved. 132 THE HEALTH CARE MANAGER/APRIL–JUNE 2018 Medicare patients. If this form of reimbursement were properly used, primary care practices could see increases of nearly $75 000 per year in revenue as opposed to face-to-face visit reimbursement. The ACA has set up a financial incentive program for primary care providers. This program offered financial incentives to Medicare providers and practitioners designated to family practice, internal medicine, pediatrics, and geriatrics.22 Incentives were granted if 60% (or greater) of their practice focused on primary care over a 12-month period. Providers who met criteria for incentives received payments equaling 10% of total Medicare paid amounts. In 2012, this amount was more than $64 000 000.22 The Table illustrates the distribution of these funds by specialty in 2012. FFS transitions to VBP The FFS method of payment has been based strictly on the volume of patients seen/treated by the physician. Payment received by the physician under this method of payment has been 80%.23 Unfortunately, with this form of payment, readmission rates have not been taken into account. Readmission rates in 2010 were 18% for pneumonia patients, 20% for myocardial infarction patients, and 25% for heart failure patients discharged from acute care facilities.24 Because of high readmission rates in 2012, the US Commission had recommended that Congress raise the prices of inpatient and outpatient care by 1.0%.24 For readmission rates to be part of a new method of payment, positive clinical outcomes and decreased readmission rates would need to be maximized to provide cost-efficient care.25 A new method of payment, in 2010, had examined health care readmission rates and quality of care. Physicians no longer received rewards for providing poor care to patients, with high readmission rates.26 Discussion: Measures of Healthcare Quality

The ACA has changed the payment of choice to VBP, which conventionally improved health care outcomes across the continuum.26 Value-based purchasing has provided an incentive for physicians to provide excellent care to patients and penalized physicians for providing inadequate care. Patient care has been quantitatively monitored through data and concentrated on patient readmission rates.27 This model has accentuated clinical measures as well as patient satisfaction, although these two portions were not equal in a final score. In a score created on a scale from 0 to 10 (with 10 being the best/highest quality care), 70% of the score focused on clinical outcomes, whereas 30% included patient satisfaction scores.28 The VBP model was applied to all hospitals and facilities who accepted Medicare for payment. High-quality hospital reimbursement occurred at a much higher amount than poor-quality services.27 If a hospital achieved a perfect score on both the clinical side and the patient satisfaction portion, the hospital was eligible to receive an additional 1% reimbursement on the total cost of the patients’ bill.28 Value-based purchasing has decreased health care costs and hospital readmissions and improved quality of care in 96% of hospital facilities.26 DISCUSSION Table. 2012 Primary Care Incentive Payment Program Payment Distribution by Medicare Specialty Designation Specialty Family practice Internal medicine Pediatrics Geriatrics Nurse practitioners Other % 37.9 49.4 0.3 1.9 7.5 3.1 Bonus Payment $251 733 340 $327 923 480 $2 169 957 $12 309 017 $49 693 372 $20 519 747 Source: Centers for Medicare and Medicaid Services22 (2012). The purpose of this research was to study the effects of the ACA on physician reimbursement rates from CMS to determine the most cost-effective method of delivering health care services. A singular method of payment has not been developed for reimbursement, despite implementation of multiple experimental payment methods initiated by Centers for Medicare & Medicaid Innovation. Incentivebased, cost sharing methods have proven to be the most effective reimbursement methods Copyright © 2018 Wolters Kluwer Health, Inc. All rights reserved. Provider Reimbursement Following the ACA because they provide a mutually beneficial payer system. The ACA substantially decreased the number of uninsured Americans, but most of this decrease was accomplished through the expansion of Medicaid. This method may eventually prove effective in reducing health care costs overall, but further research is needed to determine whether the Medicaid expansion has improved patient outcomes and preventative health care. There has been a concern about the increased financial burden that has been placed on both the state and federal governments and, ultimately, the American tax payer. Discussion: Measures of Healthcare Quality

Research has shown an increase in provider reimbursement related to an increase in patients who have been insured by Medicaid, but there is a need for further research because the increase in reimbursement is not equivalent to the percentage increase in patients who were insured by Medicaid. The 2-year increase in physician reimbursement from Medicaid that expired in 2014 proved to be a strong motivating factor when providers consider accepting Medicaid patients, and as such, a permanent increase should be considered with a focus on preventative practices and better patient outcomes that are within the control of the provider. Historically, Medicare providers have been reimbursed on an FFS basis. Reimbursements, traditionally, have been provided regardless of patient outcomes or readmission rates. The patient could have been discharged from the hospital and readmitted the following day, and the physician would have received reimbursement for both hospitalizations. After the ACA, Medicare providers have lost the traditional reimbursement strategy of FFS and have begun to receive reimbursement for accountable care. Discussion: Measures of Healthcare Quality

Ultimately, the ACA has sought to decrease Medicare payment for unnecessary services and improve patient outcomes, resulting in reductions of Medicare expenditure and financial incentives to Medicare providers.29 The transition of payment systems from FFS to VBP has been a change that has greatly affected every hospital and physician across the country. This transition has been difficult 133 for physicians but has proven to be more effective than the FFS method of payment. Value-based purchasing has made it imperative for physic …Discussion: Measures of Healthcare Quality