Medical Device Daily Washington Editor

The Centers for Medicare & Medicaid Services (CMS) recently released its proposed reimbursement schedule for hospital in-patient prospective payment services (IPPS), and the reaction from industry hinted that the agency's position is seen as quite ambitious.

CMS did little tinkering with diagnostic-related groups (DRGs) one of the few tweaks was a new DRG for replacement of leads in implantable defibrillators but the agency has proposed adding nine hospital-acquired conditions (HACs) to the existing list of eight for which Medicare will not reimburse. The new total of 17 HACs includes infections to surgical sites, Legionnaires' disease, ventilator-associated pneumonia and two bacterial infections, including Staphylococcus aureus.

Another feature that is drawing a lot of scrutiny and ink is the inclusion of more measures of hospital quality as part of the value-based purchasing (VBP) paradigm. As is the case with HACs, the additions more than doubled the original list, which was 30 and is now proposed at a total of 73. Among the new entries are a measure for surgical care improvement and three measures for readmissions.

Administrators at small hospitals may feel a squeeze on administrative staffing, but CMS was prompted in this direction in part by the Medicare Payment Advisory Commission, which has cited hospital readmissions as a conspicuous cost factor.

Those in the device industry are focused more on what is left out than on what is included. In an April 16 statement, Ann-Marie Lynch, executive VP for payment and health care delivery policy at the Advanced Medical Technology Association (AdvaMed; Washington), said the association is "pleased that ... CMS will complete the two-year phase-in of the MS-DRG patient classification system" in the coming fiscal year, but that the proposal "does not provide an immediate adjustment to address the longstanding issue of charge compression." Lynch said CMS uses outdated data to calculate payments and "the proposal to modify the cost reports as put forth in this rule would not result in a change" until fiscal 2012. Lynch expressed a preference for "a regression-based adjustment for supplies [to] be implemented in FY 2009."

As for the hospital industry, even die-hard VBP fans are wary of the large number of new hospital quality measures. Blair Childs, senior VP for public affairs at the hospital consortium Premier (Charlotte, North Carolina), said in an April 17 statement that while the organization "continues to urge Congress to give CMS the authority to establish a full-scale pay-for-performance program ... care should be taken that the timeline for implementation is not overly aggressive." Premier member hospitals served as the test sites for the pay-for-performance project that is the basis for VBP.

David Allen, a spokesman for the American Hospital Association (AHA; Chicago), told Medical Device Daily that the association sees the proposal as "a mixed bag." He said that AHA would encourage CMS to "slow down [on adding measures] and to go at a more measured pace" to get to a full-blown version of VBP.

Regarding the proposed additions to the list of HACs, Allen said that some questions remain unanswered, such as "whether these will enhance patient safety" inasmuch as there is a question in some situations as to whether an infection was present prior to the patient's admission.

CMS will accept feedback until June 13 and said it anticipates publication of a final payment schedule by Aug. 1.

HHS to appeal Checkbook ruling

The question of transparency of hospital quality data is settled, but a lawsuit filed last year by a consumer group to force CMS to publish quality data on individual physicians ran afoul of the Department of Health and Human Services.

The group, Consumers Checkbook (CC; Washington), won a lawsuit last August in U.S. District Court in the District of Columbia to force CMS to release the data, which CC had requested via a Freedom of Information filing. According to an Oct. 22 statement by CC, "the data to be released would not include any information on individual patients" and the association intended to post the data on its web site to allow patients "to easily check that a physician has an appropriate level of experience" for high-risk procedures, such as knee replacements.

The statement also made the case that publication of the data "would also be useful in the evaluation of the Medicare program itself for example, to assess whether the government is paying unqualified physicians to do large numbers of high-risk procedures."

HHS issued an April 16 statement indicating that its opposition to the move is based in part on "two conflicting court opinions that control HHS's release of data." The department's position is that an unnamed 1979 decision in a court in Florida, "which is still in effect, prohibits Medicare from releasing physician reimbursement data in a manner that would enable the user of that data to identify individual physicians," which the statement said is predicated by the Privacy Act of 1974.

The HHS statement notes that the information sought by CC, "when combined with other publicly available data on Medicare fees could lead to the disclosure of annual Medicare reimbursement amounts for individual physicians," which would "result in a violation of the existing court order." HHS cited the DC court decision of last year as the other of the two conflicting court opinions.

HHS also states that it sees its quality measures as "generat[ing] more valid, specific and comprehensive information on the quality of care delivered" than would be afforded by information on "the number of times a provider has performed a specific service."

According to documents generated by the DC court decision, the 1979 case cited was Florida Medical Association v. Department of Health, Education, and Welfare. HHS did not indicate which court would hear the case, but the District of Columbia falls geographically under the jurisdiction of the U.S. Fourth Court of Appeals.