As health care changes, performance measures are playing an increasing role in the care provided, how that care is perceived, and how orthopaedic surgeons get reimbursed. The 2015 Medicare Access and CHIP Reauthorization Act (MACRA) did away with the Sustainable Growth Rate formula and the Physician Quality Reporting System (PQRS), but replaced the latter with the Merit-Based Incentive Payment System (MIPS). As a result of MIPS and the upcoming change in payment structure, performance measures will be used to identify top performers and provide financial reward at the expense of bottom-performing providers, ensuring budget neutrality for the Centers for Medicare & Medicaid Services (CMS).
As a result, it becomes imperative to understand how CMS and other payers will develop and use performance measures, both for payment and public reporting. This article looks at previous CMS measure implementation, utilization, and reporting, with a focus on the "2-year look back" in data collection and on "capping out" of a measure as variability is eliminated.
The 2-year look back
In July 2015, CMS announced several value initiatives related to joint replacement surgery. Currently, the focus is on the introduction of the mandatory Comprehensive Care for Joint Replacement (CJR) payment model in 20 percent of U.S. metropolitan statistical areas. These statistical areas are used by CMS as the basic geographical unit for their economic analyses.
Prior to the CJR rule proposal, however, CMS announced that it would begin collecting and reporting the 90-day risk-adjusted cost of providing hip and knee replacements for all providers. CMS began aggregating these data in January 2016, and will report them later this year through its Hospitalcompare.gov website. CMS wants to use these data as the "efficiency" measure in its value-based purchasing system for hospitals.
The cost data, however, includes data from the previous 2-year period, effectively looking back to 2013. This highlights how CMS can introduce performance measures with retrospective data before healthcare providers are generally aware of being in a performance measurement collection period.
This lag in the data collection time period, compared to the point at which CMS announces the performance measure and subsequent reporting of the data, does not come without some warning. The measurement development process includes calls for technical expert panels and opportunities for public review and comment. Some organizations and providers have ignored the development of performance measures and are waiting until the measure is implemented to begin the process of meeting the measures requirements. These groups will be at a significant disadvantage in the upcoming payment environment compared to those that preemptively follow the measure development process.
CMS, through the PQRS/MIPS and value-based purchasing programs, is aggressively moving forward with the concept of objectively measuring healthcare systems and providers. Measures include adherence to processes and/or structures as well as reported outcomes, including patient reports.
As this process moves forward, the intent is to move away from dependence on process measures (such as are found in the SCIP [Surgical Care Improvement Project]) and patient experience measures (such as the HCAHP [Hospital Consumer Assessment of Healthcare Providers and Systems]). CMS wants to implement reporting on meaningful outcomes (such as mortality, infections, readmissions) and move toward patient-reported outcomes (PROs). This shift in focus requires CMS to de-emphasize currently reportable measures and begin implementing newly developed ones.
Performance measures selected for reserve status will often be those that have removed variability in care from the healthcare system. When providers are meeting the metrics of a measure at its ceiling and with little variability, CMS will consider the measure as "capped out," using processes in the National Quality Forum to determine that the measure should be retired (Fig. 1). This will create room for newly developed, outcome-based measures with greater healthcare-related variability (eg, a more significant "performance gap").
The retirement of elements of SCIP is the most recent example. Process measures can remove variability in a shorter time than can outcome measures. Outcome measures tend to have inherently greater performance gaps and are likely to have longer periods of useful utilization.
Implications for orthopaedics
The evolving healthcare payment structure is moving from volume- to value-based payment structures; when combined with practices such as the 2-year look back and capping out, this shift will mean constant change in the orthopaedic surgeon's relationship and interaction with performance measures. To succeed in this environment, healthcare providers will need to develop internal processes that take into account development of new performance measures. Providers will also need to be nimble and able to shift their internal strategies and resources to not only meet current reporting measures but also prepare for the implementation of new ones. Organizations that efficiently prepare will be less buffeted by payment penalties and adverse public reporting.
The process of measure development has been relatively opaque to many healthcare providers, but is slowly becoming clearer. The AAOS Performance Measurement Committee is active in understanding and contributing to the performance measurement process and making it more transparent for the membership. Poor communication on the details of the performance measure life cycle by CMS and other payers is problematic; additional efforts are needed for education and awareness.
Ideally, performance measurements in development would be broadly announced, along with their probable target metrics, so that providers will have time to plan for reaching those metrics rather than living in a constant "future shock" of "wait and hurry up" that leads to measure fatigue. The performance measurement development process of the AAOS is an effort to own part of this new paradigm. The current rate of changes and the time requirements for producing endorsed measures will be ongoing challenges.
For information on the types of performance measures under consideration, see "Measuring Up."
Kent Jason Lowry, MD, is a member of the AAOS Performance Measurement Committee. Adolph J. Yates, MD, is a member of the Surgery Standing Committee for the National Quality Forum.