St. Charles penalties

Bend and Redmond hospitals lose income from Medicare

By Tara Bannow / The Bulletin / @tarabannow

Published Nov 17, 2013 at 04:00AM

The second year of Medicare’s system of rewarding or penalizing hospitals based on their quality of care has dealt yet another blow to St. Charles Health System.

Both St. Charles Bend and St. Charles Redmond will for the second year in a row see decreased Medicare payments for inpatient stays through September 2014.

Medicare’s Value-based Purchasing Program, a component of the Affordable Care Act that seeks to shift health care spending away from quantity and toward quality, bases its findings on 24 measures of effective care and patient satisfaction and — starting this year — death rates.

St. Charles Bend will see 0.4 percent less payment from Medicare on its annual $72 million, or about $289,000. St. Charles Redmond will see $42,000 less on its $12 million annual payment, a decrease of 0.35 percent. The cuts took effect Oct. 1.

“Those numbers come right off of our bottom line,” said Karen Shepard, St. Charles’ chief financial officer. “That’s money that is gone from our community now.”

For the Bend campus, the cut was 0.15 percent worse than last year’s penalty, which came to nearly $183,000. For Redmond, which was dealt a roughly $65,000 cut last year, it was slightly less painful.

The Central Oregon hospitals were among 1,451 hospitals in the country that will be paid less for the Medicare patients they see due to penalties under the Value-based Purchasing Program, a number that’s up slightly from last year, according to a Kaiser Health News analysis. Another 1,231 hospitals will see bonuses under the program, down from more than 1,500 last year.

The data the Centers for Medicare & Medicaid Services released last week included the amount of penalties or bonuses to hospitals, but the actual breakdowns of how they scored on various quality measures won’t be available until December, Donald McLeod, CMS spokesperson, wrote in an email to The Bulletin.

A notice on Hospital Compare, the website where CMS publicly reports its quality measures, said it won’t be updated until Dec. 12 due to the federal government shutdown. If not for the shutdown, the notice said it would have been updated in October.

St. Charles leaders said they’ve made progress since last year in the areas in which CMS measures quality, such as improving quick responses to heart attack patients, for example. As of July 2013, 80 percent of heart attack patients admitted to St. Charles Bend were given coronary interventions within 90 minutes of arrival, up from 78 percent in the 2011-2012 Health Compare data. According to the 2011-2012 data, the national average at that time was 94 percent.

The percentage of heart surgery patients given a beta blocker just before and after surgery increased to 95 percent on the Bend campus and 100 percent in Redmond as of July 2013, up from 80 percent in Bend and 71 percent in Redmond, according to the 2011-2012 data. The national average was 97 percent in 2012.

Pam Steinke, St. Charles’ vice president of quality and chief nurse executive, said the hospitals underwent a process improvement to identify those patients, including implementing a checklist post-discharge to validate whether they did or did not need the beta blockers. Sometimes, CMS counts as non-compliant people who didn’t receive beta blockers even if they weren’t supposed to get them, so doctors now always indicate whether the patient should have them.

The percentage of heart failure patients given discharge instructions on how to take care of themselves fell to 67 percent on the Bend campus and jumped to 100 percent on the Redmond campus as of July 2013 compared with 86 percent in Bend and 84 percent in Redmond the previous year. The national average in that category was 93 percent in 2012.

With respect to patient satisfaction, the proportion of patients who said their doctors and nurses communicated well with them stayed relatively the same. The percentage of patients who said their medications were explained well to them dropped in Bend from 62 to 58 as of September 2013.

The problem with the Value-based Purchasing Program is that it doesn’t account for the cost of services, and thus penalizes Oregon hospitals that have done a lot of work around providing more efficient care, Shepard said.

“There’s a huge inequity across the country where, say, Florida and a lot of the East Coast gets paid higher than we get paid on the West Coast because we cut costs out a long time ago and we’ve been penalized for that,” she said. “So they get a lot more money for being inefficient.”

Overall, 66 percent of Oregon hospitals that are part of the quality program are seeing penalties under the new numbers and 34 percent are getting bonuses, according to Kaiser. The Oregon Association of Hospitals and Health Systems estimates that Oregon hospitals lost $1.1 million through the program in the 2013 federal fiscal year, and they’ll lose more than $2 million in 2014.

The Healthcare Quality Coalition is lobbying the federal government to make cost 50 percent of hospitals’ scores. By 2015, cost will comprise about one-fifth of hospitals’ scores.

At the end of the day, the U.S. health care system still pays hospitals to do more regardless of quality or whether it’s necessary, and the Value-based Payment Program is designed to reverse that, said Stuart Guterman, vice president of Medicare and cost control at The Commonwealth Fund.

“The bottom line is to really say ‘We’re paying attention to this and our intention is to pay for what we want to see the health care system produce and not just for whatever they happen to produce,’” he said.

The St. Charles hospitals in Madras and Prineville are not subject to the Value-based Purchasing Program.