by Theresa Knotts
MSN, RN, CPHQ, Advisor, Advisory Services, Performance Management

Everyone has points in their career that they recall with great clarity. One of those moments for me was in the fall of 2013 with the addition of the Medicare Spend per Beneficiary (MSPB) measure. As a nurse and quality professional, MSPB was like a golden thread that brings everything together: quality, safety, patient experience, inpatient and outpatient care, provider revenue and payer spend. Care delivery was finally becoming connected in a way that had the potential to engage everyone across the continuum of care in quality and I was excited to be at the forefront of change.

Fast forward to federal fiscal year 2017: 6 percent of a hospital’s base operating DRG payment is “at risk,” based on performance with Medicare’s Pay for Performance (PfP) – the related dollars are now significant. The MSPB measure represents one-half percent of the total “at-risk” dollars, which makes it one of the highest weighted single measures. This means that finally there are hard dollars associated with performance on quality measures.

What makes MSPB different from other measures? Why are chief financial officers so interested? The answer is in the measure’s details.

Medicare spend is what Medicare actually pays the Medicare providers (hospitals, physicians, post-acute care providers, etc.) for an episode of care – provider revenue. An episode of care includes Medicare Part A and B claims with start dates within three days prior to an inpatient admission to 30 days post discharge from the inpatient admission. The 30 days post discharge includes the Medicare spend related to all inpatient readmissions (planned, unplanned, all providers – no exclusions) and may be impacted by Hospital-acquired Conditions (HACs) and avoidable safety-related adverse events.

To top it off, the information submitted with Medicare claims starting 93 days prior to and including the inpatient admission are used by Medicare to risk adjust a hospital’s MSPB per episode. Therefore, to successfully improve MSPB performance, providers must improve quality, safety, inpatient readmissions, clinical documentation and coding while reducing Medicare spend. The cool part is that leading practice strategies show that patient/caregiver engagement, activation and retention play a significant role in achieving success!

All of this ties into the transition from volume- to value-driven episode-based payment models. It is also important to note that Medicare is not the only payer moving in this direction. Commercial payers are expected to be “fast followers.”

CMS provides hospitals with their MSPB claims data so they have access to the utilization and related spend for each episode included in the calculation of their MSPB performance score. Prior to this, hospitals have not had ready access to claims data nor data that told them where and when the patient received care from other providers. Access to the MSPB claims data equips the hospitals with critical insights related to:

  • Understanding the impact of their post-acute referral network
  • Identifying where the Medicare population served is going for the full episode of care and the related spend
  • Recognizing variation in utilization and spend for the Medicare population at the provider and patient level
  • Determining the drivers for high Medicare spend
  • Providing actionable data that hospitals may share with other involved providers
  • Identifying actionable opportunities to successfully reduce Medicare spend

Improving MSPB is strategic and must be aligned with the organization’s strategic priorities to achieve success. Therefore, it would be extremely beneficial to pair the MSPB claims data with a comprehensive clinical and operational database (as well as Medicare and commercial claims data). The insights could provide immeasurable value as this approach would not only assist the hospital in improving MSPB performance, it could substantially impact their ability to achieve the tenets of The Triple Aim.

For information about Vizient’s MSPB and value-based care solutions, click here.

About the author. An accomplished nurse and quality professional, Theresa serves as a performance improvement (PI) advisor to Vizient membership. In this role she works with member quality executives, helping them keep their hands on the performance improvement steering wheel, driving focus and advancing results. She also serves as the clinical and content subject matter expert for Vizient’s MSPB program offering.

Published: December 12, 2016