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Testimony on Health Care Quality Initiatives

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Quality Provisions Under the MMA

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) includes a variety of provisions designed to encourage the delivery of quality care, including demonstrations to focus effort on improving chronic illness care and identifying effective approaches for rewarding superlative performance.

The law includes a number of quality provisions such as demonstrations, electronic-prescribing, medication therapy management, and background-checks on long-term care facility employees. In addition, the law expands the responsibilities of QIOs and develops a closer working relationship between AHRQ and the Medicare, Medicaid, and SCHIP programs.

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Medicare Health Care Quality Demonstration Programs

The MMA authorizes a 5-year demonstration program that expands CMS' current Physician Group Practice (PGP) demonstration and evaluates the effect of various factors such as the appropriate use of culturally and ethnically sensitive health care delivery, on quality of patient care. This demonstration defines "health care groups" as regional coalitions, integrated delivery systems, and physician groups and allows "health care groups" to incorporate approved alternative payment systems and modifications to the Medicare FFS and Medicare Advantage benefit packages. This demonstration covers both FFS and Medicare Advantage eligible individuals and must be budget neutral.

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Medicare Care Management Performance Demonstration

The MMA also authorizes a Care Management Performance Demonstration Program in Medicare FFS. Eligible Medicare beneficiaries will include those enrolled in Medicare Parts A and B who have one or more chronic medical conditions, to be specified by CMS (one of which may be a cognitive impairment). The goals of this demonstration are to promote continuity of care, help stabilize medical conditions, prevent or minimize acute exacerbations of chronic conditions, and reduce adverse health outcomes, such as adverse drug interactions. This is a pay-for-performance 3-year demonstration program with physicians. Physicians will be required to use information technology (such as email and clinical alerts and reminders) and evidence-based medicine to meet beneficiaries' needs. Physicians who meet or exceed performance standards established by CMS will receive a per beneficiary payment. This payment amount can vary based on different levels of performance. CMS will designate no more than four sites for this demonstration program, which must also be budget neutral.

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Voluntary Chronic Care Improvement under Traditional FFS

The MMA requires that CMS phase-in chronic care improvement programs in Medicare FFS. These programs must begin no later than 1 year after enactment of MMA. Eligible beneficiaries will be those with chronic diseases such as congestive heart failure and diabetes. Chronic care improvement programs will help beneficiaries manage their self-care and will provide physicians and other providers with technical support to manage beneficiaries' clinical care. The goal of these programs is to improve quality of life and quality of care for beneficiaries without increasing Medicare program costs. This program will be particularly valuable in rural areas and among populations who encounter barriers to care by ensuring that nurses and other professionals will be available to help chronically ill beneficiaries manage their illnesses between office visits. CMS will identify beneficiaries who may benefit from these programs, but participation will be voluntary. Participating organizations must meet performance standards and will be required to refund fees CMS paid to them if these fees exceed estimated savings.

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Incentives for Reporting

MMA provides a strong incentive for eligible hospitals to submit data for 10 clinical quality measures. For fiscal years 2005 through 2007, hospitals will receive the full market basket payment update if they submit the 10 hospital quality measures to CMS. If hospitals do not submit the 10 quality measures, then they receive an update of market basket minus 0.4 percentage points.

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Electronic Prescribing

Medication errors caused by poor handwriting and other mishaps will be sharply reduced by the electronic prescribing provisions in the MMA. Under MMA, the Secretary of Health and Human Services is directed to develop a national standard for electronic prescriptions with the National Committee on Vital and Health Statistics and in consultation with health care providers including hospitals, physicians, pharmacists and other experts. With a national standard in place, doctors, hospitals, and pharmacies nationwide can be sure their computer systems are compatible. This will allow providers to share information on what medications a patient is taking and to be alerted for possible adverse drug interactions. A seamless computer system also will provide information about a patient's drug plan and any prescription formularies. This information would let the doctor know whether a therapeutically appropriate switch to a different drug might save the patient some money.

A one-year pilot project in 2006 will test how well the proposed national standard works, and the Secretary may revise the standard based on the industry's experience. Once the final standard is set (and no later than April 2008), any prescriptions that are written electronically for Medicare beneficiaries will have to conform to the standard. There is, however, no requirement that prescriptions be written electronically. Electronic prescribing is entirely voluntary for doctors. However, MMA authorizes the federal government to give grants to doctors to help them buy computers, software, and training to get ready for electronic prescribing. The grants will cover up to half of the doctor's cost of converting to electronic prescribing, and they may be targeted to rural physicians and those who treat a large share of Medicare patients. The first public meeting on this initiative will take place next week.

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Medicare Therapy Management

MMA requires plans offering the new Medicare drug benefit to have a program that will ensure the appropriate use of prescription drugs in order to improve outcomes and reduce adverse drug interactions. MMA also contains a provision that allows plans to pay pharmacists to spend time counseling patients and will be targeted at patients who have multiple chronic conditions (such as asthma, diabetes, hypertension, high cholesterol and congestive heart failure), are taking multiple medications, and are likely to have high drug expenses. The therapy management program also will be coordinated with other chronic care management and disease management programs operating in other parts of Medicare. Medication management was identified by the Institute of Medicine as one of 20 priority areas for transforming the health care system.

Medication therapy management will be a new service for Medicare plans. In Medicare, the amount and structure of payment will be set by the plans offering the new Medicare Part D, according to requirements established by the Secretary of Health and Human Services in the coming years.

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Research on Health Care Items and Services

The bill requires AHRQ to serve as a science partner for the Medicare, Medicaid, and SCHIP programs. The Secretary is required to establish a priority-setting process to identify the most critical information needs of these three programs regarding health care items or services (including prescription drugs). An initial list of priority research is required by early June with the initial research completed 18 months later.

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Quality Initiatives in the Private Sector

In the past few years, the private sector has become very involved in the issue of healthcare quality, particularly for hospitals. Several well-publicized landmark studies identify significant gaps and variations in the quality and safety of health care, at a time of rapidly escalating health costs. These reports have accelerated efforts by accrediting bodies, large purchasers and employer coalitions, and others to track quality at the national, State, and provider level, publish comparative quality reports, launch quality improvement efforts, and use public and private purchasing power to reward better quality.

AHRQ has been an important partner in these efforts, providing tools and data, lending technical assistance, and helping all of the players learn from these efforts. For example, with respect to accreditation, our research and tools have provided the basis for measures used by HEDIS® and JCAHO.

To facilitate internal quality improvement, AHRQ's Quality Indicators (QIs) have been used by hospitals and State hospital associations for benchmarking. Statewide hospital associations run the indicators for all hospitals in their State and then share the information with hospitals that can not only track their own performance but also compare it with that of their peers. This use of our indicators takes place in New York, Georgia, Montana, Missouri, West Virginia, Illinois, Kentucky, Oregon, and Wisconsin. In Texas, the Dallas-Fort Worth Hospital Council uses our indicators to target and direct interventions to improve diabetes care in the community and thereby prevent the need for many hospitalizations. In Illinois, Blue Cross Blue Shield profiles hospitals using 10 of our measures and expects to add more shortly.

A major change in the past several years has been an acceleration of public reporting efforts, particularly for hospitals, and this has brought a tremendous amount of interest in AHRQ's Quality Indicators. Two large States now have comparative quality data for all hospitals using AHRQ's Inpatient Quality Indicators. In New York, the Niagara Business Coalition has published statewide comparative data for two consecutive years. The Texas Health Care Information Council also published public scores for all 400 Texas hospitals using all 25 of AHRQ's Inpatient Quality Indicators. The reports are posted on their Web site and a Readers' Guide is available to help consumers understand the information. This is a new use of the Quality Indicators—one we had not even anticipated in our original work, which was more focused on quality improvement. To inform these public reporting efforts, AHRQ is finalizing a guidance document for States, purchasing coalitions and others wishing to use AHRQ's Quality Indicators for this purpose.

Another way we facilitate the private sector's reporting efforts is to work with those using the data to find ways we can improve it. For example, many in the private sector favor use of administrative data because it is readily available and inexpensive. But the value of this information can be improved by selectively linking in clinical data. For example, the Pennsylvania Health Care Cost Containment Council already requires that hospitals collect and submit selected clinical data elements to supplement the administrative data and the National Uniform Billing Committee is considering adding some of these to the minimum data set. AHRQ has funded a project to describe the value of administrative data and is anticipating future projects focused on integrating clinical data elements into administrative data.

Several private sector organizations are already using quality information to guide their provider selection and payments. For example, an increasing number of large employers and coalitions are using a common Request for Information (eValue8) to solicit information about quality from health plans seeking to do business with them. Through the Leapfrog Initiative, alliances of large employers and business coalitions are asking hospitals to provide data on three safety practices: computer physician order entry, evidence-based hospital referral and ICU physician staffing. In addition, both private and public purchasers are establishing programs basing payment amounts and/or contractual referral relationships on provider quality information. In some cases payment is linked to mere provision of the quality data, whereas in others it is linked to the score itself. For example, Anthem Blue Cross in Virginia rewards hospitals for reporting performance on several indicators, including AHRQ's Patient Safety measures. Several of AHRQ's Patient Safety measures are being used in the CMS demonstration with Premier and, in fact, Premier is now tracking their performance against all of these indicators as part of an over-all quality improvement effort.

AHRQ also is working closely with employers, business coalitions and others involved in pay-for-performance initiatives. For example, at the suggestion of Alliance Healthcare Coalition in Wisconsin, we have done a review of what the evidence shows about the impact of financial incentives on quality. In addition, AHRQ is doing an evaluation of seven large pay-for-performance demonstrations involved in the Robert Wood Johnson's Rewarding Results program, which should help purchasers and others in the future as they design pay-for-performance schemes.

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Chairwoman Johnson, Congressman Stark, distinguished Subcommittee members, thank you again for inviting me to discuss the health quality initiatives that the Department of Health and Human Services is undertaking to improve the quality of care delivered by the health care systems across the nation. This Administration is committed to working with the health care industry and the various stakeholders to improve the quality of care, while also ensuring patients have access to the information they need to make educated decisions involving their health care. Thank you again for this opportunity, and I look forward to answering any questions you may have.

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Current as of March 18, 2004


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