Cath Lab Digest

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  Healthcare policy makers, providers, and payors must find the optimal balance between providing high quality care and managing expenses. The estimated federal spending for Medicare and Medicaid beneficiaries in 2005 is $648 billion; for 2011, projected costs are more than $1 trillion.¹ On-going discussions about methods to reduce the growth of healthcare expenditures are tempered by considerable concern about the negative impact of any cost-cutting initiatives on the quality of care provided.

  In response to the projected growth in healthcare expenditures, the federal government introduced initiatives through the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA)² to manage costs and promote quality. These initiatives include programs that promote innovative use of technology, pay-for-performance (P4P) models, disease and chronic care management, and enrollment in Medicare Advantage (Medicare’s managed care option). Simultaneously, quality improvement strategies and initiatives have been set forth by federal agencies as well as independent organizations, including the Agency for Health Research Quality (AHRQ),³ the National Quality Forum (NQF),⁴ the Joint Commission on Accreditation for Healthcare Organizations (JCAHO),⁵ the Institute of Medicine (IOM),⁶ and the American Health Quality Association (AHQA).⁷

The Cost/Quality Focus in the Home Health Industry

  Before MMA initiatives that specifically impact the cost/quality equation in the home health industry were introduced, the Centers for Medicare and Medicaid Services (CMS) presented home health providers with regulatory changes directed at managing cost and quality. In response to concerns about skyrocketing Medicare costs associated with rapid growth in the use of home health services by Medicare beneficiaries,⁸ the CMS implemented the Home Health Prospective Payment System (PPS) in October 2000.⁹ Under PPS, home health agencies receive a single payment for all care associated with an episode of care (up to 60 days) rather than receiving per-visit reimbursement as had been the case in the fee-for-service system. The amount of the PPS payment is determined at the start of a patient’s episode based on the patient’s clinical severity, functional dependence, and need for services. This bundled payment is designed to cover the costs of managing all aspects of patient care, including skilled care visits, support services, and supplies.

  Shortly after implementing PPS, the CMS also embarked on a Quality Initiative directed at home health agencies that emphasized the need for ongoing quality improvement activities at the provider level.¹⁰ The Quality Initiative has two primary components — Outcomes Based Quality Monitoring (OBQM)^11,12 and Outcomes Based Quality Improvement (OBQI).¹³ The former initiative requires agencies to monitor 13 adverse events determined by the CMS and investigate the care of patients who experience adverse events in order to identify potentially problematic or inadequate care or care practices. The latter initiative requires providers to focus performance improvement activities according to results obtained in 41 clinical and utilization outcomes areas determined by the CMS. Outcomes Based Quality Improvement further dictates a systematic approach to care investigation, implementation of best practices, and continual tracking or monitoring of progress.