CMS to Estimate Resource Use Using Episode-of-Care Prototype 

By Amita Rastogi, MD, MHA

Seeking to move from the current fee-for-service-based payment system to one based on value, the federal Centers for Medicare & Medicaid Services (CMS) has awarded contracts to build a publicly available prototype episode of care model for six clinical conditions. The Health Care Incentives Improvement Institute (HCI3) is part of a team headed by Christopher Tompkins, PhD, an associate professor in the Heller School for Social Policy and Management at Brandeis University. Other members of the team are representatives from the American Board of Medical Specialties Research and Education Foundation (ABMS REF), the American Medical Association-convened Physician Consortium for Performance Improvement (PCPI), and consultants from Booz Allen Hamilton.

CMS will use the logic behind the episodes to analyze resource use among physicians, which will be a critical element for Medicare's physician feedback reporting program and for its value-based payment modifier, which is mandated under section 3007 of the Affordable Care Act (ACA).

An episode of care is the set of services required to manage a patient's specific medical condition over a set period of time. Development of an episode of care system that organizes claims data into clinically coherent episodes will incorporate risk-adjustment and have a clinical logic that binds episodes together when they occur concurrently in comorbid patients. The prototype will include quality metrics that, when combined with resource use, provide an indication of how efficiently physicians and other providers deliver patient care.

"Examining the use of resources is a professional obligation. This is an important project by CMS and we're pleased to be a part of it," said Kevin B. Weiss, MD, president and CEO, ABMS.

PCPI board chair Bernard Rosof, MD, said, "The AMA-convened PCPI is collaborating on this project to help ensure the physician perspective is central to defining clinical episodes of care. Our work on this program is an example of PCPI's commitment to helping physicians understand and use quality measurement tools."

The Brandeis project team is one of four CMS contractors building prototypes of episode of care payment models. The other three contractors are Ingenix and The Lewin Group, Thomson Reuters, and 3M. The four teams are aiming to develop the winning prototype by yearend and thus earn a contract to develop episodes of care for 80% of Medicare spending over the next three years.

As currently designed, the Medicare fee-for-service payment system is flawed in part because it provides incentives to overuse some services and underuse others while paying physicians for care regardless of their level of resource use. To address these weaknesses, CMS is encouraging the use of value-based purchasing to reward physicians for using resources efficiently and providing high quality care.

For now, the CMS project does not include a payment component. Instead, CMS will use the tool to compare one provider against another and thus identify the most efficient physicians.

The Brandeis-HCI3 team is developing a prototype for three cardiac episodes (congestive heart failure, coronary artery disease (CAD), and acute myocardial infarction) and three pulmonary conditions (chronic obstructive pulmonary disease, asthma, and pneumonia).

We can test our prototypes against two years' worth of CMS data. Let's say, for example, that one physician provided care to 100 CAD patients and a second doctor cared for another 100 CAD patients but the cost of care from one doctor was twice as high as the cost of care from the other. Was the increased cost justified because one set of patients had more comorbid conditions or was one of the physicians doing more expensive tests than the other? Was the increased cost related to complications that could have been avoided? These are the questions we are trying to answer.

A draft of the prototype is being prepared now and will be finalized and submitted to CMS by the end of September. It will be publicly available by Jan. 1.

Amita Rastogi, MD, MHA, is the medical director, cost of care programs, for HCI3. Her e-mail is amita.rastogi@hci3.org.