Provider Peer Grouping
and
Critical Access Hospitals
June 27, 2011
Katie Burns
Purpose of Today’s Presentation
• Overview of provider peer grouping (PPG)
and the hospital total care methodology
• Describe how results will be:
– Shared first with providers
– Subsequently publicly reported
– Used by multiple audiences
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
Pneumonia (hospital)
Total knee replacement (hospital)
Asthma
Coronary artery disease
Congestive heart failure
Diabetes
Total Knee Replacement
• Diabetes
• Asthma
• Coronary Artery Disease
What Data are Needed
• Quality measures – e.g., outcomes and
processes
• Utilization of health services – amount and
types of services
• Pricing information – the amount that a
provider was paid from both third-party payers
and health plan enrollees
Stakeholder Involvement:
PPG Advisory Group
• MDH convened a 16-member Advisory
Group in June 2009 composed of diverse
set of stakeholders
• Advisory Group met intensively over fourmonth period and created a recommended
framework for PPG
Stakeholder Involvement:
Rapid Response Team
• MDH convened this group in May 2010 to
provide input on critical issues
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Approach for specific condition analysis
Methodology for attributing patients to providers
Benchmarking and determination of peer groups
Risk adjustment
Design and weighting of individual quality measures
into composite quality score
Stakeholder Involvement:
Reliability Workgroup
• MDH convened first meeting of this group
in December
–Explored characteristics of reliable data
–Discussed ways of assessing reliability
• Most recent meeting focused on data and
options related to hospital analysis
Hospital Total Care Peer Groups
• Critical Access Hospitals will only be
compared to each other as part of one
peer group
• All other hospitals will be compared to
each other as part of a separate peer
group
Composite
Cost and Quality Measure
→Lower Payments →
• A simultaneous display of cost and quality results
→ Higher Quality →
Total Care
Composite Cost Measure
• Composite cost measure will reflect both
resource utilization by and different unit
prices paid to providers
• Information on each of these
subcomponents will also be available in
both provider and public reporting
Patient Attribution
• Hospital costs include only inpatient costs
• Attributed patients generally include those
admitted to the hospital
– Limited exceptions for certain readmissions
Treatment of Readmissions
• Hospital stays that occur at the same or
another hospital within 30 days after a
patient’s discharge are treated differently if
the patient is initially admitted due to:
– pneumonia
– congestive heart failure
– heart attack
– total knee replacement
Calculating Cost Measures
• Two cost measures are calculated
– Actual costs (reflect resource use and unit price)
– Standardized costs (reflect resource use only)
• Cost per admission
− Calculated separately for CAH and
other hospitals and within payer type
Risk Adjustment of Cost Data
• Risk adjustment is a tool to account for
variation in cost that can be expected from
treating patient populations with different
levels of severity of illness or other factors
beyond the provider’s control
• Risk adjustment is essential for making fair
comparisons between providers
PPG Approach
to Risk Adjustment
• PPG risk adjustment for costs includes
adjusting for:
– Severity of illness
– Socioeconomic characteristics
– Service mix adjustment
Risk Adjusting Cost Measures
• Two cost measures will be calculated and
risk adjusted:
– Standardized total costs based on
standardized prices that reflect resource use
independent of payment rates to providers
– Aggregated total costs based on actual
payments to providers
PPG Risk Adjustment Method
• PPG analysis will use Johns Hopkins
Adjusted Clinical Groups (ACGs) to
perform risk adjustment
• Patients will be classified according to the
ACG’s more granular Adjusted Diagnosis
Groups according to the diagnoses the
patient exhibits during a standard time
period
Comparing Expected & Actual Costs
• PPG will use an “indirect standardization”
approach to risk adjustment.
– We will calculate a provider’s expected cost
through a regression
– The result is what we would expect the
average cost to be if the provider’s patients
were treated by an average provider
– Adjustment will be based on the ratio of the
provider’s actual costs to expected results
Hospital Risk Adjustment
• Hospital risk adjustment will be based on
concurrent approach
– Model will include all diagnoses for which a
patient is being treated and for a designated
time preceding it
– Model will not include information following a
hospital stay
Socioeconomic Factors
• Nonclinical patient characteristics, such as
socioeconomic status, may influence
patient outcomes
• A patient’s primary source of health
insurance (commercial, Medicare, or state
public program) serves as a proxy for
socioeconomic characteristics
Socioeconomic Adjustments
• Provider reports will include results by primary
payer type
• Public reports will include a primary payer type
adjustment
• We will review impact of additional
socioeconomic variables for which data is
available and evaluate whether they should be
included in the model
Service Mix Adjustment
• Separate peer groups for Critical
Access and other hospitals
• Elimination of certain services from
the analysis such as trauma and
transplants
• Truncation of outlier cases
Total Care
Composite Quality Measure
• Hospitals will receive a composite quality
score
– Performance on individual quality measures
will first be aggregated into “subcomposites”
of similar types of measures
– Subcomposite categories are combined to
form the composite quality measure
Aggregating Measures
Into Subcomposites
• Providers will earn points on each measure
based on their performance
• We will use a point system that uses emerging
CMS approaches to combine individual
measures into subcomposites
Earning Points on Measures
• Points will be measured on a 0-10 scale
– Provider must perform at least at the “achievement threshold”
(30th percentile) of performance to earn any points on a measure
– Provider receives 10 points if rate is above “benchmark” (mean
of top decile of performance)
– Provider receives 1-9 points otherwise:
9*((rate-threshold)/benchmark-threshold)] +.5
Hospital Measures
• Four subcomposites and 42 measures
• Subcomposites
– Inpatient Complications (20%)
– Process of Care (30%)
– Mortality (30%)
– Readmission (20%)
Risk Adjustment of Quality Data
• Hospital quality data are risk adjusted for
outcome measures based on nationally
used methodologies
– AHRQ indicators adjust for severity of illness
– Surgical Site Infection Rate for Vaginal
Hysterectomy adjusts for patient risks
Minimum Case Size
Requirements
• Requirements for minimum numbers of
patients vary by measure set
• PPG will rely on existing community
standards for minimum numbers of
patients necessary for each measure set
Treatment of Missing Data
• Results may be imputed on individual measures
for Critical Access Hospitals that have some
data for a particular measure, but less than the
minimum N
– CAH’s own results will count in proportion to the
number of patients for which it has data
– Balance of CAH’s score will be the statewide average
for CAHs on that measure
Treatment of Missing Data
• Consistent with PPG Advisory Group
recommendations, providers must have at
least one measure per subcomposite in
order to be included in peer grouping
• Providers that do not meet this threshold
will not be included in peer grouping
Patient Experience
• Patient experience data is not uniformly
available for hospitals
• Where patient experience data is available
based on CAHPS tools, it will be reported
along with composite quality score
– Patient experience will not be part of
composite quality score
Reporting the Data
• Results will first be disseminated confidentially to
providers late this summer
– Reports will be mailed to hospitals
– Reports will also be sent electronically in PDF format
• MDH will offer a webinar for hospitals to walk through the
reports and explain information
• Mathematica staff will also provide technical assistance
in understanding results
• Providers have 90 days to review results prior to public
reporting
– Providers may file appeal within first 30 days if they
are concerned about data accuracy
Uses of PPG Data
• Various payers required to use results to strengthen
incentives for consumers to use high-quality, lowcost providers
• State Employee Group Insurance Program
• All political subdivisions that offer health benefits
• All health plan companies, including those in individual
market and small employer market
• State Medicaid Agency
• Will also use results to create a differential payment
system
For more information, see
www.health.state.mn.us/
healthreform/peer/index.html