THE article "Rethinking Medicare Payment Adjustment for Quality" describes the major payment reform proposed in the (Incentivizing Health Care Quality Outcomes Act of 2014, HR 5823, or the Outcomes Act). The commenters on the article identified a number of issues and challenges that need to be considered prior to implementation.

SCOPE OF THE QUALITY MEASURES

Several of the commenters suggested that the scope of the quality measures included in the Outcomes Act may be too narrow and should be expanded to include other aspects of quality such as mortality and patient experience (Antos, 2016; Berenson, 2016; Miller, 2016; Quinn et al., 2016). In addition to payment adjustment, quality measures can be used for public reporting and internal management. The challenge is to determine the subset of quality measures that are appropriate for payment adjustment. In the Outcomes Act, the 5 quality measures used to adjust payments are potentially preventable admissions, readmissions, complications, emergency department visits, and outpatient tests and procedures. The 5 potentially preventable events all have an associated payment amount (eg, MS-DRG payment for a readmission). Thus, there is a direct measure of the financial impact associated with each of the potentially preventable events. The Outcomes Act combines the financial impact of the individual potentially preventable events into a single measure that is proportional to the actual financial impact of the potentially preventable events and can be used as the basis of a payment adjustment.

Quality measures such as mortality and patient experience do not have a corresponding financial measure and therefore require arbitrary weighting factors be established to use them for payment adjustment (Is death 3 times more important than a readmission? Four times?). Quality measures such as mortality and patient experience are appropriate for public reporting of provider quality performance and provide important information for patient selection of provider. Not all aspects of quality need to be incorporated into a payment adjustment system. Public reporting of quality information can augment and compliment payment adjustments for quality by including aspects of quality that are difficult to quantify for the purposes of a payment adjustment.

There was general agreement across commentaries that the rates of adherence to specific process measures were not an appropriate quality measures to be included in a payment adjustment for quality and their collection and reporting represent a significant administrative burden (Miller, 2016; Nerenz, 2016; Quinn et al., 2016; Roohan, 2016). Commenters repeatedly mentioned that the existence of a large number of process measures made it difficult to focus and prioritize quality improvement efforts. As noted by Roohan, "The National Quality Forum, a not-for-profit organization charged with improving quality, has endorsed 629 quality measures." Millwee described the extensive use of process measures as the "tyranny of measurement" in which "the emphasis is on collection of data rather than acting on outcomes." The problem with using process measures for payment adjustment does not mean that process measures are not a useful quality improvement tool. The appropriate application of process measures is as an internal management tool used by providers to address specific quality problems. Thus, the application of process measures needs to be highly tailored to the unique situation of each provider and a universally mandated set of process measures is not an effective approach to quality improvement.

The Outcomes Act recognizes that not all quality measures are appropriate for payment adjustment and that some quality measures are better suited for public reporting or internal management. The Outcomes Act specifically identifies 5 outcome measures as appropriate for payment adjustment, thereby providing a focus for quality improvement efforts and leaving the processes used to improve quality to the discretion of the provider. As noted by Nerenz, "Time and other resources devoted to improvement on any one measure are time and resources not spent on something else." Thus, a clear focus on priority areas with the greatest impact is essential for achieving maximal benefit from quality improvement efforts.

FOCUS ON QUALITY IMPROVEMENT

As Berenson emphasizes, the Outcomes Act does not try to "establish the relative value of competing providers" but instead tries to "improve care in important delivery areas readily amenable to better performance." The Outcomes Act fundamentally represents a quality improvement strategy. It avoids the creation of a ranking of the overall performance of individual providers. It attempts to provide through clinically credible payment adjustments a focus on areas where real quality improvement is possible. As Jenrette observes, the Outcomes Act creates a national benchmark that allows the comparison with the "results and outcomes of highly successful and effective organizations," thereby facilitating the sharing of best practices (Jenrette, 2016). Sustainable quality improvements are only possible with real behavior changes. The provision of clinically credible benchmark information as an inherent by-product of the process of determining the payment adjustment in the Quality Act can facilitate quality improvement efforts that lead to real and sustainable behavior changes. As Miller noted, the information from the payment adjustments in the Outcomes Act is "intelligible, useful information."

RISK ADJUSTMENT

All commenters emphasized the importance of risk adjustment. Particular emphasis was given to the impact of socioeconomic factors. The Outcomes Act specifies in-depth requirements for the method using to risk adjust the comparison of the rates of the potentially preventable events. To the extent that socioeconomic factors are found to be associated with higher rates of potentially preventable events, care must be taken that risk adjustment does not have the effect of essentially considering the high rates acceptable performance. Patients from lower socioeconomic areas should expect the same high quality of care. Risk adjustment should not have the effect of perpetuating low performance expectations for these populations. The Outcomes Act provides quality improvement grants to poor performance providers, requiring them to engage in specific quality improvements efforts.

GAMING

Several commenter raise concerns about the possibility of gaming the payment adjustments. The most frequently cited example was a substitution of emergency department observation stays to avoid a readmission (Berenson, 2016; Miller, 2016; Nerenz, 2016). However, because the potentially preventable events represent a wide cross section of outcomes, an artificial manipulation of the rate of one of the potentially preventable events will typically negatively impact another potentially preventable event. An increase in utilization of emergency department observation stays may improve readmission performance but will result in poor performance on potentially preventable emergency department visits. Similarly, underutilization of outpatient tests would likely lead to more emergency department visits and admissions. Because of the high interdependencies within the delivery system, it is difficult to game one of the potentially preventable events without negatively impacting the performance on another potentially preventable event.

NEED FOR ALIGNMENT

In addition to the extremely large number of different quality measures, individual payers require reporting and base payment upon different sets of quality measures. This results in a chaotic and unintelligible situation for providers. The Outcomes Act proposes to greatly simplify the number of measures used by Medicare. As the comments by Quinn, Roohan, and Millwee indicate, there is already substantial movement in the Medicaid program toward quality payment adjustments that are consistent with the Outcomes Act. The enactment of the Outcomes Act would greatly accelerate the "alignment and simplification" called for by Roohan.

WHO'S ACCOUNTABLE?

Implicit in the Outcomes Act is the expectation that all providers will have greater responsibility for patient care coordination across the continuum of care. Nerenz raises the issue of "clinical management authority linked to accountability for outcome." The Outcomes Act represents a fundament paradigm shift in the scope of provider responsibility. For example, when a patient is discharged from the hospital, the hospital's responsibility would encompass working with all segments of the health delivery system to prevent readmissions and return emergency department visits during the post-acute care period. The Outcomes Act incentivizes greater coordination and cooperation across health delivery system.

THE BIG CHALLENGE

As noted by Miller, the current process-oriented approach to quality has "the backing (explicit or implicit) of powerful actors among providers, payers, and regulators." The recently passed Medicare Access and CHIP Reauthorization Act includes a payment adjustment system for physicians that continues with the detailed process-oriented approach to quality. Parts of the Deficit Reduction Act of 2005 and the Accountable Care Act would need to be repealed and replaced. Undoing the status quo can be a daunting undertaking and represents a major challenge for enacting the Outcomes Act.

CONCLUSIONS

The reality is that the current approach to payment adjustments for quality has not been effective. There was near universal consensus among the commenters that existing attempts to pay for quality have failed. Antos summarized the existing approach to paying for quality as "measurement for measurement's sake, perhaps satisfying the political need to promote care quality but not necessarily to accomplish it." A recent article by Kahn evaluated the multiple payment adjustments for quality used by Medicare and concluded, "It is time to consider a more rational approach to better aligning payment policy with quality outcomes" (Kahn et al., 2015). There is strong evidence from large-scale statewide implementations that payment adjustments consistent with the Outcomes Act have produced substantial and sustainable quality improvements and cost reductions (Calikoglu et al., 2012; Minnesota Hospital Association, 2015). The fundamental question is whether there is the political consensus and will to reform the approach to paying for quality.

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