Yesterday, the Centers for Medicare and Medicaid Services (CMS) proposed to change the way it pays Medicare reimbursements to hospitals. (Kaiser Network)

CMS seeks to reduce payments by a flat rate (2 percent to 5 percent) to create an “incentive payment pool” for hospitals that meet quality of care thresholds. According to CQ HealthBeat, the plan would create a “Value-Based Purchasing Program.” Under this program, a hospital’s diagnosis-related group reimbursements would be based on quality performance.

Kerry Weems, acting administrator for CMS, said: “Value-based purchasing would benefit Medicare beneficiaries and other health care consumers by encouraging higher quality hospital care. Under the plan, additional information would be collected and publicly disseminated to patients and health care providers so that they can make better health care decisions.” (Source)

Weems added: “Getting hospitals to report their quality measures was an important first step. Now, building on that experience, we are taking the next step of actually rewarding hospitals for the quality of care they provide Medicare beneficiaries.”

Mary Ousley, past chair of the American Health Care Association, which represents long term care providers, testified before a congressional committee last week about the long term care profession’s experience with the Omnibus Budget Reconciliation Act of 1987 (OBRA ‘87).

OBRA ‘87 is considered landmark legislation because it established many nursing home oversight rules in place today. Ousley said that in order to improve nursing facilities, providers, regulators, and consumers must cooperate in the process.

“What we have is a system that defines ‘success’ and quality in a regulatory context that is often measured by the level of fines levied and the violations tallied – not by the quality of care, or quality of life,” Ousley said. “The statute envisioned a resident-centered, outcome-oriented, consistent system of oversight. Unfortunately the system we have today bears little resemblance to that vision.”

In response to the growing concern over long term care quality, lawmakers introduced a bill called the Long Term Care Quality and Modernization Act of 2006. Ousley believes this measure will help improve quality of care and encourage cooperation.

Source: American Health Care Association

In an effort to improve the accuracy of payment under the acute care hospital inpatient prospective payment system and give hospitals incentives to improve quality, the Centers for Medicare and Medicaid Services (CMS) proposed a new rule. From the press release:

Medicare’s inpatient rates for operating expenses will increase by 3.3 percent in FY 2008 for those hospitals that report quality data to CMS. Overall, the proposed rule is estimated to increase payments to more than 3,500 acute care hospitals by $3.3 billion.

“The payment reforms included in this proposed rule would continue a process for the third consecutive year to ensure that Medicare payments for inpatient services are more accurate and better reflect the severity of the patient’s condition,” said CMS Acting Administrator Leslie V. Norwalk, Esq. “The proposed rule also represents yet another major step forward in Medicare’s efforts to foster higher quality care in inpatient settings.”

The Centers for Medicare and Medicaid Services (CMS) has made a series of announcements about Medicare:

1. Payment rates for home health services will increase by 3.3 percent for 2007. The acting administrator for CMS said this increase will “reward home health agencies who continue to report quality data and also provides beneficiaries with access to more affordable oxygen equipment.” (Source)

2. CMS also announced a final rule for Medicare payments for hospital outpatient services for 2007. The agency hopes the rule will make payments more accurate and encourage high quality patient care. (Source)

3. In an effort to improve physician-patient relationships, the Medicare program will pay physicians more for the time they spend talking with Medicare beneficiaries about their health care and will pay for a broader range of preventive services, effective January 1, 2007. Medicare also will expand preventive care benefits. (Source)

Physicians who provide care to Medicare patients with chronic conditions will have an incentive to do more paperwork. The Kaiser Network reports that the Centers for Medicare and Medicaid Services will begin a three-year pilot program that will pay physicians to report quality of care data. An excerpt:

The three-year program will begin next year in 800 small- or medium-sized practices in Arkansas, California, Massachusetts and Utah. During the first year, physicians will be paid for reporting data on quality measures. In subsequent years, doctors will be eligible for annual performance-based bonuses of $10,000 per physician and up to $50,000 per medical practice.

Concerned about executives’ salaries and perks, the Senate Committee on Finance has asked the Centers for Medicare and Medicaid Services (CMS) to investigate Medicare Quality Improvement Organizations (QIOs) for effectiveness and improprieties. (Medical News Today)

The call for an investigation was likely prompted by the American Health Quality Association’s request for more funding and broadened responsibilities. According to the Kaiser Network, CMS currently pays $300 million per year to QIOs to “investigate beneficiary complaints, evaluate quality and work with physicians and hospitals to improve care.” QIOs also work to ensure Medicare pays only for medically necessary services.

In related news, the American Health Care Association and National Center for Assisted Living have announced they have joined the Pharmacy Quality Alliance in an effort to bolster their collective voice in shaping long term care pharmacy policies.

In a move designed to improve standards in long term care facilities, Michigan Governor Jennifer M. Granholm signed a measure earlier this year that requires nursing homes and other assisted living facilities to conduct criminal background checks on prospective employees, the Michigan Long Term Care Partnership Workforce Background Check. (WILX News)

At the web site, Michigan Long Term Care Partnership, you’ll find the text of the bill, legal guides, and information on the background check process.

If you were under the impression that most long term care facilities already check the backgrounds of employees, you’re not alone. Background checks are probably quite expensive for most facilities. Last year, Wisconsin received a large grant ($2.3 million) to participate in a criminal background check program for its long term care facilities. (Press release)

Texas requires criminal background checks for nursing facility employees. From the Medicaid Provider Manual for Long-Term Care Facilities:

When hiring personnel who will have any contact with consumers, NFs may only employ individuals for whom criminal conviction checks have been obtained through either the Texas Department of Public Safety (DPS) or a private data broker pursuant to Health and Safety Code, Chapter 250.

In the long term care industry, there is what’s known as the “Quality First Pledge,” containing seven core principles:

• Continuous Quality Assurance and Quality Improvement
• Public Disclosure and Accountability
• Patient/Resident and Family Rights
• Workforce Excellence
• Public Input and Community Involvement
• Ethical Practices
• Financial Stewardship

(Source: American Health Care Association)

Harborside Healthcare, a long term care provider, released a quality report titled, Fulfilling Our Pledge (PDF). From the press release:

In the report, Harborside makes available to the public detailed information on its approaches to quality care, its systems and processes, and their results. Since the pledge was signed in 2002, Harborside has made significant investment in its workforce, its systems and its infrastructure.

As the report reveals, these investments are paying off. Harborside’s report reveals improvements in many areas. Regulatory deficiencies are down, and clinical indicators continue to improve. Harborside has made significant gains in the stability of its workforce, cutting turnover by 38% and the use of agency staff by 83%. In the critical area of customer satisfaction, Harborside was ranked first among its peers in several important categories including quality of licensed care and CNA care.

The quality principles are akin to industry standards, which are beneficial for many reasons. They provide consistent and proven guidelines for what works and what doesn’t, and they eliminate the need to reinvent the wheel, so to speak. The principles outlined by the AHCA take into consideration patient care, and workforce and financial accountability. Long term care providers should strive for excellence in all three areas.