Value-based purchasing and readmission hold-backs have landed, and many providers likely don’t have a real firm grasp at how much money is at risk, said Raj Lakhanpal, M.D., CEO at SpectraMD USA, during a presentation at HIMSS13 in New Orleans.

The incremental hold-backs for the CMS value-based purchasing program and high rates of preventable readmissions incrementally increase through 2017. In addition, the weights for certain value-based purchasing measures change over time, so by 2017 the hold-back amount is weighted more heavily for clinical efficiency (cost) and eight patient satisfaction measures (the HCAHPS, collectively).

In addition, new value-based purchasing measures are going to complicate efforts—the 30-day post-discharge mortality rates for certain conditions such as heart failure and pneumonia will be a part of the formula in federal fiscal year 2014 (which starts in October 2013) and CMS will follow that up with the addition of central-line associated blood infections in 2015.

Lakhanpal crunched the numbers for a 500+-bed hospital that’s collecting $250 million annually in Medicare reimbursements. With the value-based purchasing and readmissions hold-backs—assuming a 1 percent reimbursement reduction penalty for high readmission rates—a total of nearly $49 million in Medicare reimbursements is at-risk over five years. And that’s just Medicare, Lakhanpal noted: “Commercial payers are launching their own programs, so that number is actually much higher.”

Neal Ganguly, the vice president and CIO at CentraState Healthcare System, added the real kicker—while you can talk in terms of the ROI on your investments to address hold-backs, what you’re really doing is trying to earn back the money your facility is already entitled to.

Ganguly went on to discuss CentraState’s efforts to create an enterprise data analytics/business intelligence platform to address value-based purchasing and readmission reduction. CentraState has developed dashboards of key performance indicators to track the estimated hold-backs on a monthly basis across its 282-bed hospital and ancillary facilities. But if identifying KPIs was difficult, he said, actually finding where the data supporting those KPIs resides in the I.T. ecosystem system was even more of a challenge.

He also discussed how real-time analytics require a significant change in clinical operations. Like many of its peers, CentraState used a working diagnosis while the patient was in the hospital and then had to wait for coding on discharge to identify all the COPD, AMI and other patients with conditions that are being measured for the value-based purchasing and readmission programs. To identify them and start the right protocols while those patients were actually in the hospital required CentraState to start pulling data out of nursing assessments, medical lists and other documentation to create triggers for COPD, AMI and other conditions.


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