Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Value-Based Care News

Cost Data to Improve Quality Reporting, Value-Based Purchasing

Stakeholders should use cost data to create high-value measures for quality reporting and value-based purchasing models, industry experts stated.

Cost data, quality reporting, and value-based purchasing

Source: Thinkstock

By Jacqueline LaPointe

Providers enter value-based purchasing contracts without understanding the cost of quality reporting on measures listed in their contracts and payers rarely use cost data to determine which metrics to use when linking reimbursement to quality, a recent JAMA editorial stated. 

"Measuring quality of care is essential to improving it," wrote Mark A. Schuster, MD, PhD, from Boston Children's Hospital. "However, the current, cost-uninformed approach has created a proliferation of measures, many of which are needlessly burdensome for healthcare organizations." 

Schuster and his two co-authors added that knowing the cost of measures "would not only inform decisions about which measures to use, but also guide future development of high-value measures that maximize benefit while optimizing use of finite quality measurement resources." 

Quality measurement is an expensive responsibility for providers. A 2016 Health Affairs study revealed that providers from four specialties spent over $15.4 billion annually to report on quality measures. 

The four provider types spent an average of 785 hours per physician to report on quality measures, equating to an average cost of $40,069 per physician per year. 

READ MORE: Exploring Quality Measures Under Value-Based Purchasing Models

Despite the significant cost of quality reporting, cost is not generally used when payers and hospitals prioritize quality measures for their value-based purchasing models. 

"The cost of specific measures has received limited attention in discussions about global costs of quality measurement and is not formally considered when evaluating and selecting measures, in no small part because that cost is usually unknown," Schuster and his co-authors wrote. "Without understanding the cost of a specific measure, assessing its value cannot be fully determined." 

Limited information is known about the costs of quality reporting because key organizations and hospitals do not consider cost data when deciding on what measures to use. For instance, the National Quality Forum, which approves quality measures for healthcare organizations, does not require measure developers to submit cost data. 

In addition, little information is known on if and how CMS uses quality reporting cost data in its Hospital Value-Based Purchasing Program. Even if the federal agency does measure the costs, the values are not publicly available. 

As a result, the estimated costs for quality reporting is not available to providers when choosing measures to use. Processes for assessing quality reporting burden are also inconsistently reported and not transparent. 

READ MORE: Best Practices for Value-Based Purchasing Implementation

Similarly, providers lack information regarding the costs of reporting individual measures. The Office of Management and Budget does project the costs of quality measurement. But the estimates emphasize the annual cost burden for reporting programs, rather than the burden for reporting a single measure or for individual stakeholders. 

This may be especially problematic for eligible clinicians in MACRA's Merit-Based Incentive Payment System (MIPS). CMS offered clinicians quality reporting flexibility under MACRA by allowing clinicians to select which MIPS measures to submit data on, rather than mandating data submission on specific measures. 

Hospitals and clinicians are particularly affected by the lack of information compared to their peers in larger organizations, the industry experts stated. Providers end up shouldering a significant portion of quality reporting expenses. 

"Measurement costs are likely not trivial," they stated. "They include both fixed costs associated with implementing a quality measurement infrastructure and measure-specific costs, which can vary substantially across measures and often depend on local measurement capacity and simultaneous use of other measures." 

Costs may include start-up expenses for learning to use the measure as well as ongoing expenses of regularly using the measure, including aggregating and homogenizing data from disparate sources and cleaning and preparing the information for analysis. 

READ MORE: How Value-Based Reimbursement Affects Physician Productivity

Dedicated data collection is also a major expense for providers. Patient and family surveys are particularly costly and providers shoulder the cost because they use third-party vendors to administer the surveys. 

Providers also face high medical abstraction costs because of substantial labor expenses, especially when clinician reviewers are used. Although, EHRs may reduce these costs as the systems incorporate and use automated measures. 

The healthcare industry should work to understand the costs of collecting, analyzing, and interpreting data for individual measures, the experts advised. 

"Cost estimates are needed for individual measures, as well as standards for the units, timeframe, and other variables needed for valid cost comparisons across measures,they wrote. "Organizations endorsing measures should include cost estimates in measure descriptions." 

To estimate the costs of quality reporting, organizations should establish deadlines after which submissions for individual measures must include cost information. 

The endorsement organizations should also develop a pilot program to test standard specifications for cost data and to create process for gathering cost information and estimating costs.  

Understanding the costs of quality reporting would help payers, providers, and other stakeholders prioritize quality measures for value-based reimbursement models, the experts contended. 

"Some useful measures may be worthwhile even if expensive; those with limited clinical value should be retired, especially if expensive," they stated. "If measures have moderate clinical value, cost may become a critical factor in deciding whether to use them." 

Improving cost data access would also better inform policymakers as they create financial incentive structures that promote quality reporting. 


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