Study finds 'mixed messages' in Medicare hospital ratings, penalty programs

Dive Brief:

• Consumers are getting “mixed messages” from the CMS Hospital Compare website and penalties levied by the Hospital Readmissions Reduction Program, undermining their ability to shop for quality care, according to a study in The American Journal of Managed Care. 
• The researchers compared hospital grades posted on Hospital Compare for heart failure and acute myocardial infarction readmissions with the HF and AMI scores for excess readmissions used to set penalties under HRRP. They also looked at how often hospitals were penalized for just one or two of the five HRRP conditions, since the penalty program affects a hospital’s sum Medicare payments.
• Of 2,956 hospitals, 92% were deemed “no different” than the national HF readmissions rate on Hospital Compare, yet nearly half (49%) scored high for HF readmissions under HRRP and 87% received an overall readmissions penalty. 

Dive Insight:

Even more striking: Half of the hospitals graded “better” than the national HF rate and not scored as having excess readmissions also received a penalty. The assessment of AMI data showed similar results.

The study echoes other recent findings that question the usefulness of hospital rankings. A recent analysis of U.S. News & World Report’s 2017-2018 hospitals rankings on cardiology and heart surgery found that while top-ranked hospitals outperformed nonranked hospitals on 30-day mortality for HF, AMI and coronary artery bypass grafting, 30-day readmission rates were similar for AMI and CABG and were actually higher for HF.

U.S. News regularly tweaks its annual best hospitals methodology to better reflect performance. For example, the 2018-19 rankings included ICD-10 coded Medicare claims and eliminated transfer patients from the receiving hospitals’ risk-adjusted mortality rate. Further updates are reportedly coming, including replacing patient safety indicators in specialty rankings with HCAHPS surveys.

“Discordant systems for grading and penalizing performance are confusing to consumers and hospitals and highlight persistent uncertainty in how best to identify and link value to payment,” the researchers write. “Although the legislation requiring financial penalties predetermines the cost reduction to be achieved by requiring penalties for the bottom half of the outcome distribution, the relationship to improved quality is tenuous.”

To provide a clearer value signal, CMS could refuse to pay for clinically inappropriate care and reduce payments for marginally inappropriate care, similar to the Hospital Value-Based Purchasing Program, the study suggests. Hospital Compare and HRRP scores both should be based on a balance of process and risk-adjusted outcome measures to demonstrate appropriate care.

Meanwhile, clinicians need be more engaged with the shift to value-based medicine through initiatives like Choosing Wisely that provide a blueprint for appropriate care. “This clinically defined approach needs to be aligned more directly with payment redesign for CMS to truly deliver on its promise to change its payment paradigm from volume to value,” the study says.