Quality and payment: the U.S. experience of typing inpatient and outpatient casemix payments to quality measures and reporting

Abstract

Over the past four to five years, the focus in casemix-based payment systems in the United States has shifted more and more towards value-based-purchasing and pay-for-performance measures. The reporting of pre-set quality indicators is now fundamentally in place for both the inpatient prospective-payment system, based on Medicare-Severity Diagnosis Related Groups (MS-DRGs), and, more recently, the outpatient prospective-payment system, based on Ambulatory Payment Classifications (APCs). For hospitals to receive their full casemix MS-DRG or APC payment, whether for inpatient services or outpatient services, all required quality indicators must be reported. Reporting pre-determined quality indicators is important for data collection and monitoring, but the simple act of reporting data does not, and should not, be used as a proxy to talk about the delivery of healthcare services. In fact, critics in the U.S. consider the current pay-for-performance system simply a pay-for-reporting system which does little to measure true quality, or the lack of it. Additional quality-of-care concepts have been introduced more recently. These focus on the reporting of specific diagnoses that may influence final DRG assignment and, thus, final payment in the inpatient setting. These concepts focus on whether reported diagnoses were Present on Admission (POA), or whether they were Hospital Acquired Conditions (HACs) that surfaced during the patient's hospitalization. Examining such data begins to tell a different story about the patient's disease state upon arrival to the hospital versus conditions, often considered preventable, that might have occurred during the stay. The practice of flagging diagnoses that are POA, versus those that are HACs, is one method the U.S. Medicare program uses to provide an incentive to hospitals to offer high-quality treatment while a patient is in their care. If certain preventable conditions, including Never Events, occur during the patient's stay, then Medicare believes that these secondary diagnoses should not influence grouping, nor the final MS-DRG payment calculation. This link between the reporting of specific data, the assumption made about the quality-of-care rendered, and the final impact on payment is quite new, and to some extent controversial. It will be reviewed during this session.