Hospitals need to be proactive to avoid the penalties from CMS’ reporting measures. In specific, there are 4 changes to be aware of: 1) Value based purchasing will include two additional outcome measures: CLABSI and PSI. 2) The Readmissions Reduction Program will be expanded to include COPD and THA/TKA, plus there’s a proposed 3 percent penalty for readmission. 3) Under the new proposed HAC Reduction Program, hospitals with the highest rate of HACs will receive a 1 percent reduction in Medicare inpatient payments. 4) Medicare proposes to align reporting for the Electronic Health Record and Inpatient Quality Reporting.

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CMS Reporting Requirements-4 Changes
Hospitals Need to Know for 2014
By Bobbi Brown & Michael Barton

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Surviving the New CMS Standards
To survive the Centers for
Medicare & Medicaid
Services’ (CMS) new
reporting measures,
hospitals must proactively
improve their quality scores.
Significant changes are
coming in 2014 and those
healthcare providers
unprepared to meet the new
CMS standards will face
severe financial setbacks, or
worse – go out of business.

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Upcoming CMS Changes
Considering the context of
recent CMS changes it’s
increasing clear that the long
term strategy is to reduce
reimbursements to facilities that
fail to meet quality benchmarks.
Hospital systems must achieve
an active understanding of the
CMS changes to be prepared
for the new healthcare climate.
Here are four proposed
changes for 2014.

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Hospital Value-Based
Purchasing Program
Established by the Affordable
Care Act, the hospital value-
based purchasing (VBP)
program adjusts payments (in
the form of penalties and
bonuses) to hospitals based on
the quality of care they provide.
Hospitals are rewarded for best
clinical practices and how well
they enhance the patient
experience of care.
2014
CMS REPORTING
CHANGES
1

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Hospital Value-Based
Purchasing Program
For fiscal year 2015, the portion
of Medicare payments available
to fund the value-based incentive
payments will increase to 1.5
percent of the base operating
diagnosis-related group (DRG)
payment.
According to CMS estimates,
the total amount available for
value-based incentive payments
in FY 2015 will be approximately
$1.4 billion.
2014
CMS REPORTING
CHANGES
1

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Hospital Value-Based
Purchasing Program
There will also be two new
outcomes measures for 2015:
AHRQ Patient Safety Indicators
(PSI) composite and central
line-associated blood steam
infection (CLABSI).
The total performance score for
each hospital will be calculated
by using these percentages:
2014
CMS REPORTING
CHANGES
1
Clinical Process: 20% Patient Process: 30%
Outcomes: 30% Efficiency: 20%

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Hospital Readmissions
Reduction Program
The Hospital Readmissions
Reduction Program is the
government’s attempt to reduce
hospital readmissions for
patients who’ve recently been
admitted for certain conditions
or procedures.
For FY 2015, CMS proposed
adding COPD and THA/THK
(total hip & total knee arthroplasty)
to the list of conditions.
2014
CMS REPORTING
CHANGES
2

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Hospital Readmissions
Reduction Program
2014
CMS REPORTING
CHANGES
2
Health Catalyst’s Readmission Explorer tool displays easy-to-understand trends,
comparisons, and detailed, patient-level data through an uncluttered user interface.

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Hospital Inpatient Quality
Reporting
2014
CMS REPORTING
CHANGES
3
CMS is proposing to align the
reporting and submission timelines
for clinical quality measures for the
Medicare Electronic Health Record
(EHR) Incentive Program with the
Hospital Inpatient Quality Reporting
(IQR) Program established in 2003.
Hospitals risk losing 2% of payments
(up from 0.4%) for failing to meet the
new standards.

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Hospital-Acquired Condition
(HAC) Reduction Program
2014
CMS REPORTING
CHANGES
4
The Hospital-Acquired Condition
(HAC) Reduction Program is the
newest CMS quality program.
This program penalizes hospitals
for high HAC rates.
The HAC Reduction Program
penalty begins in October 2014

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Hospital-Acquired Condition
(HAC) Reduction Program
2014
CMS REPORTING
CHANGES
4
Under the HAC Reduction
Program, hospitals with the highest
rate of HACs — specifically, those
in the top 25 percent — will receive
a 1 percent reduction in Medicare
inpatient payments.
CMS estimates 753 hospitals will
be subject to the one percent
reduction and overall payments will
decrease by $330 million (0.3%)

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Hospital-Acquired Condition
(HAC) Reduction Program
2014
CMS REPORTING
CHANGES
4
CMS has categorized HAC measurements in two domains:
Domain 1 includes the AHRQ PSI-90 composite measure consisting of these indicators:
PSI 3 Pressure ulcer rate
PSI 6 Latrogenic pneumothorax rate
PSI 7 Central venous catheter-related blood stream infection rate
PSI 8 Postoperative hip fracture rate
PSI 12 Postoperative pulmonary embolism (PE) or deep vein thrombosis rate (DVT)
PSI 13 Postoperative sepsis rate
PSI 14 Wound dehiscence rate
PSI 15 Accidental puncture and laceration rate
Domain 2 consists of the Center for Disease Control and Prevention’s NHSN (National
Healthcare Safety Network) CAUTI and CLABSI measures. CAUTI is catheter-associated
urinary tract infection and CLABSI is central-line associated blood stream infection.
For CMS scoring Domain 1 weights 35% and Domain 2 weights 65%

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Needed: A Systematic Approach to
Improve Quality and Cost
Changes from the government
will be ongoing — and CMS
will continue to relentlessly
increase their cost and penalty
measures through various
improvement programs.
To survive the new quality
requirements hospitals must
develop a systematic and
ongoing approach to improve
quality and cost to keep up
with these yearly mandates.

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Conclusion
Improving quality performance
and meeting CMS measurements
can only be driven by using the
right system level information and
analytic processes.
Such a reporting system,
combined with getting the right
clinical teams in place to solve
quality issues, can change a
hospital’s culture and keep up
with the ongoing CMS evolution.

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Other related articles:
Read about why a systematic approach to healthcare will
help you achieve quality improvement despite the ever-
changing CMS guidelines.
Learn how Texas Children’s Hospital used a system-wide
strategy to leverage their EHR by aggregating their data into
a healthcare enterprise data warehouse (EDW).
Here’s a useful article about how moving from meaningful
use to meaningful analytics will help you improve quality and
reduce costs.
See our how Analytics Adoption Model provides the
framework you need to succeed with CMS’ reporting
requirements.

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Other Clinical Quality Improvement Resources
Bobbi Brown is Vice President of Financial Engagement for Health Catalyst, a data
warehousing and analytics company based in Salt Lake City. Ms. Brown started her
healthcare career at Intermountain Healthcare supporting clinical integration efforts
before moving to Sutter Health and, later, Kaiser Permanente, where she served as
Vice President of Financial Planning and Performance. Ms. Brown holds an MBA
from the Thunderbird School of Global Management as well as a BA in Spanish and
Education from Misericordia University. She regularly writes and teaches on
finance-related healthcare topics.
Michael Barton joined Health Catalyst as Vice President in January 2013. He
completed his training at the University of Utah Health Sciences Center. Upon
graduation in 1994, he was employed with the Pharmacoepidemiology Team, a
multidisciplinary team of epidemiologists, infection control practitioners, quality control
specialists, pharmacists, and healthcare IT specialists at the University of Utah. After
four years, Michael moved his clinical practice to the Shock-Trauma ICU at LDS
Hospital. Here, he had the opportunity to apply his infectious disease and critical care
knowledge. After eight years of clinical practice in conjunction with five years of IT industry consulting
experience, Michael joined HIT startup TheraDoc, Inc. as a consultant in 2000 and full-time in 2001.
Michael spent 12 years with TheraDoc, where he served in various roles. The last 5 years Michael
served on the senior leadership team as SVP, Knowledge and Product Development where Michael
oversaw the Knowledge Management, Product Management, Engineering, and Quality teams. For
Michael, joining Health Catalyst means continuing to pursue his passion of improving the quality and
safety of patient care through applied healthcare IT solutions.
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