Report to CMS on Risk Adjustment of Medicare Hospital Payments
The National Academies of Sciences, Engineering, and Medicine has issued its latest report to the Centers for Medicare & Medicaid Services on how to adjust Medicare payments to hospitals based on the socio-economic risk factors hospitals’ patients pose.
At the request of CMS, the Academies created an expert committee to
…identify criteria for selecting social risk factors, specific social risk fascinators Medicare could use, and methods of accounting for those factors in Medicare quality measurement and payment applications.
The committee created for this purpose viewed its goal to be
…to guide the selection of social risk factors that could be accounted for in VBP [value-based purchasing] so that providers or health plans are rewarded for delivering quality care and value, independent of whether they serve patients with relatively low or high levels of social risk factors.
Now, the committee has issued its third report to CMS, and in that report it offers three overarching considerations and five criteria to determine “whether a social risk factor should be accounted for in performance indicators used in Medicare VBP programs.” They are:
- The social risk factor is related to the outcome.
- The social risk factor has a conceptual relationship with the outcome of interest.
- The social risk factor has an empirical association with the outcome of interest.
- The social risk factor precedes care quality and is not a consequence of the quality of care.
- The social risk factor is present at the start of care.
- The social risk factor is not modifiable through provider actions.
- The social risk factor is not something the provider can manipulate.
- The social risk factor is resistant to manipulation or gaming.
Ever since the Medicare readmissions reduction program and other value-based purchasing programs were created, NAUH has urged CMS to add a risk-adjustment component to those programs to reflect the special challenges urban safety-net hospitals face when serving their low-income communities.
To learn more about what the committee proposed and why it proposed it, see this news release describing its work, this summary of its work, and the full report, titled Accounting for Social Risk Factors in Medicare Payment Criteria, Factors, and Methods.