Provider Peer Grouping:
Overview of Project and
Advisory Group Recommendations
May 10, 2010
Katie Burns
State Health Reform Law of 2008
‘ Comprehensive health care reform law
– One primary goal of the law is to promote health
care payment system reforms that will slow the
growth of health care costs and improve quality
and value.
– Another priority is making better information on
health care costs and quality available for more
informed decision-making by health care
consumers.
Value and Health Care Spending
‘Research has demonstrated that
higher health care spending is not
necessarily associated with better
quality of care.
What is Provider Peer Grouping?
‘ A system for publicly comparing provider
performance on cost and quality
– …a uniform method of calculating providers'
relative cost of care, defined as a measure of
health care spending including resource use and
unit prices, and relative quality of care…
(M.S.§62U.04, Subd. 2)
– a combined measure that incorporates both
provider risk-adjusted cost of care and quality of
care… (M.S.§62U.04, Subd. 3)
What Types of Provider Peer Grouping
Needs to be Developed?
1. Total Care
2. Care for Specific Conditions
The commissioner shall develop a peer grouping
system for providers based on a combined
measure that incorporates both provider riskadjusted cost of care and quality of care, and for
specific conditions… (M.S.§62U.04, Subd. 3)
Issues to Be Addressed in Developing
Provider Peer Grouping (M.S.§62U.04, Subd. 3)
(1) provider attribution of costs and quality;
(2) appropriate adjustment for outlier or catastrophic cases;
(3) appropriate risk adjustment to reflect differences in the
demographics and health status across provider patient
populations, using generally accepted and transparent risk
adjustment methodologies;
(4) specific types of providers that should be included in the
calculation;
(5) specific types of services that should be included in the
calculation;
(6) appropriate adjustment for variation in payment rates;
(7) the appropriate provider level for analysis;
(8) payer mix adjustments, including variation across providers in
the percentage of revenue received from government
programs; and
(9) other factors that the commissioner determines are needed to
ensure validity and comparability of the analysis.
Reporting of Results
‘ Different amounts of information will be useful to
different audiences
– Providers
– Payers/Purchasers
– Consumers
‘ Current timeline:
– TOTAL CARE results disseminated October 2010 to
providers with public reporting beginning December 2010
– SPECIFIC CONDITION results disseminated December
2010 to providers with public reporting to occur in February
2011
– Law provides a process to contest accuracy of data used to
develop analyses or reports
Uses of Provider Peer Grouping
Information (M.S.§62U.04, Subd. 9)
‘ Commissioner of Finance - to strengthen incentives for
members of the state employee group insurance program to
use high-quality, low-cost providers;
‘ All Political Subdivisions that Offer Health Benefits - must
offer plans that differentiate providers on their cost and quality
performance and create incentives for members to use betterperforming providers;
‘ All Health Plan Companies - to develop products that
encourage consumers to use high-quality, low-cost providers
‘ Health Plan Companies in the Individual Market or the
Small Employer Market - must offer at least one health plan
that establishes financial incentives for consumers to choose
higher-quality, lower-cost providers through enrollee costsharing or selective provider networks.
Uses of Provider Peer Grouping
Information (M.S.§256B.032)
‘ Commissioner of Human Services shall establish
performance thresholds for health care providers included in
the provider peer grouping system. The thresholds shall be set
at the 10th percentile of the combined cost and quality
measure used for provider peer grouping.
‘ Any health care provider with a combined cost and quality
score below the threshold shall not be eligible for direct
payments under MA, GAMC, or MinnesotaCare programs, or
for PMAP payments made by managed care plans.
‘ A health care provider that is prohibited receiving payments
may reenroll effective January 1 of any subsequent year if the
provider's most recent combined cost and quality score
exceeds the threshold
Peer Grouping: Existing Related Efforts in
Minnesota
‘ Related analysis is being performed and
used by:
– Health plans
– State employee group insurance program
– Provider groups
‘ Interest in, and use of, peer grouping type
analysis has grown rapidly, both in
Minnesota and nationally
‘ Existing efforts illustrate many different ways
to approach these issues
Differences Between Peer Grouping and
Related Efforts
‘ Will use cost data aggregated across
multiple payers (private and public) to
produce a community wide view of
performance
‘ Will use a transparent methodology
‘ Must include a combined measure of cost
and quality
‘ Will not result directly in tiered insurance
products
Provider Peer Grouping: What Data is
Needed?
• Utilization of health services – amount and
types of services used
• How much resource use?
• Pricing information – the amount that a
provider was paid (from both third-party
payers and health plan enrollees) for the
services provided
• Quality measures – e.g., outcomes,
processes, structures, patient experience
Peer Grouping Analysis Data Sources
PEER GROUPING ANALYSIS
QUALITY MEASURES
Existing Measures by
current reporters
•MN Community
Measurement existing
measures (HEDIS &
Direct Data Submission)
•CMS Hospital
Compare
New Measures
E.g. HIT,
depression,
patient
experience, AHRQ
hospital measures
CLAIMS DATA
Utilization and
price (new)
Hospital
avoidance
measures (new)
Data reported by health plans and
third party administrators to
Commissioner of Health’s designee.
All providers (clinics, hospitals & surgical centers) required to
report to Commissioner of Health’s designee on applicable
measures under new quality reporting rules.
Advisory Group Recommendations
‘ Issue #1: Attribution
– Choose a methodology that emphasizes credibility of
attribution over attributing as many patients/episodes as
possible
‘ Issue #2: Outliers
– Set outlier thresholds specific to population size (i.e., tailor
outlier thresholds to the size of a provider’s patient
population with lower thresholds for smaller populations)
– Total care: retain low outliers and truncate high outliers
– Specific conditions: remove low outliers and truncate high
outliers
Advisory Group Recommendations
‘Issue #3: Risk adjustment
– Total care: use ACG* tool
• This tool is one of the most commonly used
risk adjustment tools in Minnesota
– Specific conditions: use risk adjustment in
episode grouper software and ACGs as a
second level of risk adjustment
*ACG = Adjusted Clinical Group. The ACG tool, developed by Johns
Hopkins University, classifies patients into 93 homogeneous categories
based on age, gender, and morbidity.
Advisory Group Recommendations
‘ Issue #4: Specific types of providers to
include
– Total care: primary care, hospitals
– Specific conditions:
•
•
•
•
•
•
Diabetes: primary care, endocrinologist
Pneumonia: hospital
Heart failure: primary care, cardiology
Coronary artery disease: primary care, cardiology
Total knee: orthopedics, hospital
Asthma: primary care, pediatrician, allergist,
pulmonologist
Advisory Group Recommendations
‘ Issue #5: Services to include
– Include all covered services.
• Example: Heart failure analysis will be published at the
clinic/medical group level but will include all services
(physician, hospital, ancillary, pharmacy) for an episode
‘ Issue #6: Adjustment for variation in
payment rates
– Perform analysis using actual total cost, and
analysis that controls for variation in unit prices.
Advisory Group Recommendations
‘ Issue #7: Provider level for analysis
– Clinic site level is ideal but may not be feasible; in
this case, analysis should be at the medical
group level
– Hospital analysis should be at individual hospital
level, not system level
‘ Issue #8: Payer mix adjustments
– Perform analysis in total and for specific payer
categories. For total analysis, normalize payer
mix to a standard payer mix.
Advisory Group Recommendations
‘ Issue #9: Other factors as determined by the
Commissioner
‘ Advisory group made recommendations on:
– Combined measure of cost and quality
– Credibility of results vs timeliness
– Data analysis should inform final determination of
methodology
– Methodology should be transparent
– Multipayer database as a valuable potential
resource for other analyses
Current Status of Project
‘ MDH signed a two-year contract with
Mathematica Policy Research to conduct
analysis and share/explain results to
providers
‘ Many technical decisions remain, and must
be informed by analysis of the data
– MDH has assembled a Rapid Response Team to
provide additional input on technical decisions
Next Conference Call
‘Monday, June 14th from 7:30-8:30 am