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CMS Faces Continued Pushback on Judging Care of Poor Patients

By Kerry Young, CQ Roll Call

August 8, 2016—A recent flap over consumer-friendly hospital ratings is prompting some in Congress and the Centers for Medicare and Medicaid Services (CMS) to wrestle with whether to make allowances in quality measures for facilities that serve poor communities. It's an issue that's certain to pervade fights over health care payments for many years.

The American Hospital Association, the Federation of American Hospitals, and the Association of American Medical Colleges protested last month that CMS's new simplified star ratings are weighted against hospitals that have significant numbers of homeless patients or ones with low incomes who may struggle to get transportation for follow-up medical visits and to buy food and medicine.

Hospitals argue that they are being blamed for poor results for these patients due to circumstances beyond their control. The debate over socioeconomic factors may be revived when Congress returns from recess. The Senate Finance Committee will face pressure to move a House-passed Medicare package (HR 5273), which includes a bid to address concerns about readmission penalties for hospitals. The bill proposes a comparison that would group hospitals that serve significant populations of low-income elderly patients who qualify for both the Medicare and Medicaid program.

CMS officials have shown some skepticism about making such distinctions. The agency says it wants to avoid making changes that would "mask potential disparities or minimize incentives to improve the outcomes of disadvantaged populations." CMS repeated this exact phrase in three separate fiscal 2017 payments rules, which cover services of hospitals, skilled nursing centers (SNFs) and inpatient rehabilitation facilities (IRFs). The last two categories of providers, SNFs and IRFs, form a large share of what's called post-acute medicine, which accounts for roughly $60 billion in annual Medicare spending and is directed at patients after surgeries and serious illnesses and injuries.

Ashish K. Jha, a Harvard University researcher and doctor who has published widely on the question of socioeconomic differences and quality measures, said he is sympathetic to CMS's aim of spurring improvements in care by tracking and comparing outcomes. Still, he argues for a need to make allowances when a hospital serves many poor people.

"I get it. I like it," Jha said of CMS's goal. "But we need to acknowledge that the job of the hospital is very different when you have lots of poor people and homeless people versus wealthy, well-to-do patients. And if you agree that the job is very different, then you should be held responsible in different ways."

In recent payment rules, CMS acknowledged that treating large numbers of poor people may affect quality ratings. Agency officials said they are monitoring a two-year test by the National Quality Forum to determine if risk adjusting for patient income may be appropriate. Separately, an in-house policy shop for the Department of Health and Human Services (HHS) is conducting its own research. The office of HHS's Assistant Secretary for Planning and Evaluation is looking at the question of a socioeconomic adjustment in connection with a 2014 law intended to set the stage for an overhaul of payments for post-acute care (PL 113-185).

This same debate is likely to arise with the continued implementation of another major payment change, last year's overhaul of Medicare reimbursements for doctors (PL 114-10), said David Nerenz, a researcher at Detroit's Henry Ford Health System. CMS is in the midst of establishing an initial framework, known as the merit-based incentive payment system, or MIPS, for pegging Medicare reimbursement to judgments about the quality of care delivered.

Doctors in poor areas might find it more difficult in the future to obtain the kinds of scores needed to prevent cuts in pay, due to circumstances they perceive to be beyond their control, Nerenz said.

"We are going to have similar questions about whether these measures should be adjusted at a patient level or a community level for socioeconomic factors," Nerenz said of MIPS, adding that the stakes in creating these metrics may be higher in this case.

"It's hard to pick up and move a hospital that's been for a hundred years in an inner-city area, but doctors are more mobile," Nerenz said. "You may find a real problem in finding physicians willing to go to or stay in underserved areas."

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