Physician quality reporting adds extra compliance headache for hospitals

As hospitals acquire physician practices, administrators must be less "hospital centric" when it comes to setting benchmarks and reporting quality.

With new quality ratings programs making hospitals more on the hook than ever for their physicians' performance, experts say managers will have to think beyond the traditional hospital walls to avoid costly ratings.

The Physician Quality Reporting System incentive payment adjustments begin in 2015, which means provider organizations are due to start reporting on specific quality measures. Through PQRS, providers can assess the quality of care and quantify how often they are meeting a particular quality metric. Using the CMS feedback report, they can also compare their performance against their peers.

While PQRS is designed to generate a higher level of performance, it also adds another layer of compliance for hospitals to navigate, says Larry Magras, senior director at Chicago-based Huron Healthcare.

"Many hospitals are affected because they are acquiring practices," he said. "One of the challenges with hospitals owning practices is that administrators have been so hospital-centric that they haven't considered their wider scope of responsibility."

The new PQRS landscape contains clinically integrated networks, so it is necessary to examine the quality governance structure, Magras said. Opportunities exist in leveraging electronic medical records as practices are acquired, moving them to the same platform as inpatient EMRs.

[Also: CMS needs better process for physician quality reporting]

"That way you can get quality data that spans the continuum," he said.

To manage physician quality, hospitals need to repurpose their quality committees to include both inpatient and outpatient metrics, Magras said. The chief quality officer should assemble an interdisciplinary team comprised of representatives from every site of care, he said, including all entities in the post-acute spectrum.

"Quality committees have been focused on nursing staff and not on physicians," he said. "That focus needs to shift to the outpatient environment."

As a physician himself, Robert Williams, MD, director of Deloitte Consulting's Life Sciences & Health Care division, empathizes with the intimidation factor PQRS presents.

"One of the key concerns is managing the sheer volume of quality indicators," he said. "Physician practices could, in theory, be faced with measuring and reporting 2,000-plus unique 'quality' metrics if you start compounding the impact of PQRS and other shared savings arrangements.  It can quickly become overwhelming, unreasonable and lead to the quality agenda being dictated by external reporting requirements rather than what the physician determines are the metrics that matter for their specialty or patient panel."

Checking the registry

Brett Furst of ArborMetrix calls PQRS a "carrot and stick" initiative in which "the stick is here with the 1 percent penalty, which goes up to 2 percent for noncompliance in 2017." In order for quality compliance to dovetail with PQRS, the CEO of the Ann Arbor, Michigan-based clinical and financial analytics firm recommends checking into the Qualified Clinical Data Registry, designed by CMS to allow specialists to create measures that are most appropriate for their field. For instance, the Michigan Urological Surgery Improvement Collaborative formed to address the lack of quality data regarding prostate cancer care and to develop practice improvement methods.

"With QCDR, CMS recognized that specialists in different areas may be looking for meaningful measures specific to the specialty," Furst said. "It's like PQRS from a reimbursement and incentive perspective, but it allows specialists to create their own measures that are more clinically appropriate and intuitive in their focus."

In order to be considered for a QCDR, providers must self-nominate and successfully complete a qualification process. Those who "satisfactorily participate" through a QCDR may avoid the 2 percent negative payment adjustment in 2017.

Capturing quality

Attentiveness to measuring quality and impact on reimbursement "has never been higher" at hospitals, Furst said.

"Hospitals have to ascertain what they are good at, and whether it's knee replacement or hip replacement, they have to determine where the best outcomes are and what has the best impact on the bottom line," he said. "These are the incentives that will lead to better performance."

A marriage of clinical and financial data will make for better dialogue with physicians, Furst said, especially for engaging them on readmissions, co-morbidities and negative impacts on the bottom line.

"Understand where the cost and clinical variation is within the health system and use the tools necessary to gauge these measures," he said.

Hospitals that are acquiring a large number of practices should ensure that they have the support and bandwidth to support the practices and move them to the same platform, Magras added.

"There are large underpinnings to managing a large practice," he said. "Have a process in place so that the infrastructure from a quality and reporting perspective has the proper bandwidth. You don't want to delay."

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Starting in 2019, 4 percent of Medicare fee-for-service revenue will be at risk if practices are not compliant, ramping up to 9 percent by 2022, said Dorrie Guest, director of Deloitte Consulting.

"That can represent a significant revenue hit for physician practices with a high percentage of Medicare patients," she said. "It would not be surprising if commercial payers followed in Medicare's footsteps whether physicians are under a defined value-based arrangement or not. Pair that with the impact of increasing shifts to value-based models, practices that are not prepared to collect, report and improve quality metrics could face crippling financial impacts." 

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