risk adjusted data south carolina association of health care quality
TRANSCRIPT
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Risk Adjusted Data
South Carolina
Association of Health Care Quality
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What is Risk Adjustment
• Can Risk be Managed?– Going beyond your best guess
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Some Examples of Risk Management
• Project Management
• Any Insurance
• Public Relations
• Investing
– The event causing the risk. – The likelihood of the event happening. – The impact on the plan if the event occurs
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Why Medicine?
Doctor – You have higher X when compared to Y
• My patient’s are more complex and sicker
• Question is this really true– Enter Risk Adjusted Data
• Used to compare one provider to another
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Process of Risk Adjustment
• Must have an adequate risk assessment tool.
• Must segment populations in meaningful ways.
• Develop a system to normalize the population.
• Reward or dissuade risky behavior.
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Criteria for assessing
Risk Adjustment
tools
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Mechanism of Risk Adjustment
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Going National
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The Basic ToolDRG -> Risk Adjusted DRG
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Hx of DRG• Developed in 1967
– Introduction of Medicare• Hospitals required to implement Utilization Review• Also implement Quality Assurance Programs
• Intentions– Inclusion of all hospital services– Incorporate thousands of diagnoses and procedures– Account for multiple diseases and treatment of individual
patients– Differentiate between high and low cost care– Create clinically meaningful catagories
• Followed ICD-9 Methodology– Developed 23 Major Diagnostic Categories– Identified patient clusters based on secondary dx, procedures,
sex age, discharge status, complications comorbidities to sort out similar LOS and resource consumption
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Advent of HCFA-DRG
• Original DRG system flawed– Found to be highly variable– Did not capture severity of illness– Relative weights based on unreliable data– Too slow to keep pace with rapid change
• HCFA adopted DRG system as payment for hospitals in 1983– Took ownership of ensuring annual updates– Reimbursement for hospitalization based on the
reason for hospital stay.– Split out procedure codes to be maintained separately
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Refined DRG
• Soon became evident the presence or absence of complications and comorbities (CC) resulted in assignment of different DRG for certain patients– Defined a CC as a secondary diagnosis that
specifically increases hospital resource use.– System modified to account for four levels of CC
• Non, Moderate, Major, Catastrophic
– Ran pilot studies, but never adopted this modification• Only utilized one CC to modify DRG to Highest level
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All Patients DRG
• Adopted by New York State as the payment system for all non-Medicare patients in 1987– Found DRG system was inadequate to classify
resource consumption for:• Neonates• HIV infected patients
– NY state contracted 3M to modify DRG system• Added Pediatric modified DRGs• MDC 24 for HIV infection• CC List modified gave rise to MDC 25
– Transplants– Long term vents– Cystic Fibrosis– Nutritional Disorders– High risk OB– Acute Leukemia– Sickle Cell Anemia
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All Patient Refined DRG• Widely used in US, Europe, parts of Asia• Uses Base of AP-DRG system• Developed by 3M in 1990• Added four subgroups attempting to describe Severity of
Illness• Resulted in significant change to group logic
– All age and CC distinctions are removed– Replaced by two groups
• Severity of illness 1-4• Risk of Mortality 1-4
• Subgroup assignment is based on the interaction between:– Secondary diagnosis– Age– Principle diagnosis– Presence of certain non-operative procedures
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Intent of APR-DRG
• Compare hospitals across wide range of resources and outcome measures
• Evaluate the differences in inpatient mortality rate
• Implement and support critical pathways
• Identify continuous quality improvement projects
• Form the basis of internal management and planning
From 3M
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APR DRG Classification Data Elements
MDC Major Diagnostic Category
APR DRG Assignment
Four Severity of Illness Subclasses
1. Minor2. Moderate3. Major4. Extreme
Four Risk of Mortality Subclasses
1. Minor2. Moderate3. Major4. Extreme
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Does Severity Adjustment really make a difference
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Mortality in Severity of Illness -- SRHS
0
20
40
60
80
100
120
Minor SI Moderate SI Severe SI Extreme SI
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Mortality in Mortality Risk -- SRHS
0
20
40
60
80
100
120
Minor MR Moderate MR Severe MR Extreme MR
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LOS in Severity Adjusted-- SRHS
0
5
10
15
20
25
30
35
40
45
Minor SI Moderate SI Major SI Extreme SI
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LOS in Mortality Risk -- SRHS
0
5
10
15
20
25
30
35
40
45
Minor MR Moderate MR Major MR Extreme MR
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Pattern in Most Hospitals
0
10
20
30
40
50
60
70
80
Minor SI Moderate SI Major SI Extreme SI
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SRHS Severity of Illness – All Patients
0
500
1000
1500
2000
2500
Minor SI Moderate SI Major SI Extreme SI
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SRHS Mortality Risk – All Patients
0
500
1000
1500
2000
2500
3000
3500
Minor MR Moderate MR Major MR Extreme MR
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Big Deal, What can I do with this Knowledge
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Case Management Perspective
0
5
10
15
20
25
30
35
40
45
Minor SI Moderate SI Major SI Extreme SI
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Discharge Planning
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Minor SI Moderate SI Major SI Extreme SI
Home DC
Home Health
SNF
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Disposition is not an Issue
HOMEDISCHARGE
HOME HEALTHAGENCY/HOSP
ICE
SNF-SKILLEDNURSINGFACILITY
Other
0
10
20
30
40
50
60
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Age0.
0
8.1
16.2
24.3
32.4
40.5
48.6
56.7
64.8
72.9
81.0
S1
0
2
4
6
8
10
12
14
NICU BabiesPre term
PSYCH
Oncology with Surgery
PSYCH &GI Procedure
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56% of Outliers in 4 Units100%
17%
56%
45%
32%
0
10
20
30
40
50
60
70
PSYCH-3SOUTH-EAST
4 TOWER NURSERY-INTERMEDIATE
8 TOWER Other
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
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But I Admit more then others100%99%
82%
58%
29%
0
10
20
30
40
50
60
70
80
90
SHAH,AMISHI GRAVELY,VONDA MEMON,MOHAMMED A CASTON,CHRIS POWELL,W S
Attending Physician
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
100%92%
85%
69%
54%
0
2
4
6
8
10
12
SHAH,AMISHI GRAVELY,VONDA MEMON,MOHAMMED A CASTON,CHRIS POWELL,W S
Attending Physician
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
37%
54%
71%
86%
100%
21%
0
20
40
60
80
100
NELSON,ERIC CHARLES BEARDEN,JAMES D CURRAN,COLIN PATI,ASIM R CORSO,STEVEN W Other
Attending Physician
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
83%
100%
67%
0
1
2
3
4
5
6
CURRAN,COLIN BEARDEN,JAMES D NELSON,ERIC CHARLES
Attending Physician
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
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Patient Mix
0%
20%
40%
60%
80%
100%
CHERRY,STEPHEN R EICKMAN,F MICHAEL GALLAGHER,JOHN HUEY,BARRY L IKE,DAVID LITTLEFIELD,RONALD H LOPEZ,ALEJANDRO N MACDONALD,ROBERT G MOBLEY,JOSEPH RODAK,DAVID J SRIVASTAVA,NALIN K STORY,JAMES R
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Costs
CHERRY,STEPHEN R
EICKMAN,F MICHAEL
GALLAGHER,JOHN
HUEY,BARRY L
IKE,DAVID
LITTLEFIELD,RONALD H
LOPEZ,ALEJANDRO N
MACDONALD,ROBERT G
MOBLEY,JOSEPH
RODAK,DAVID J
SRIVASTAVA,NALIN K
STORY,JAMES R
Minor SI
Moderate SI
Major SI
Extreme SI0
5000
10000
15000
20000
25000
30000
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DRG Specific Cost Comparison
CHERRY,STEPHEN R
EICKMAN,F MICHAEL
GALLAGHER,JOHN
HUEY,BARRY L
IKE,DAVID
MOBLEY,JOSEPH
RODAK,DAVID J
SRIVASTAVA,NALIN K
STORY,JAMES R
Minor SI
Moderate SI
Major SI
Extreme SI0
5000
10000
15000
20000
25000
30000
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Compare Your Processes
0
5000
10000
15000
20000
25000
Minor SI Moderate SI Major SI Extreme SI
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Refine the Search
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
Minor SI Moderate SI Major SI Extreme SI
117125132552
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Get to the Details• DRG 117 Revision of Pacer (Few Patients)
– 2 docs in SI Moderate• 1. avg cost $3,500• 2 avg cost $12,300 – Higher utilization of resources Xrays, Labs LOS 5 days vs
3• DRG 125 Heart Dz w/o MI & wCath
– 7 docs in Group 3• Avg Cost $4500• 1 pt with cost $15,000 complication of Malignant Htn
• DRG 132 Atherosclerosis with CC– Group 3 - 1 pt expired with long LOS and MR 4– Group 2 – One physician Avg cost $12,500 vs, $3,000
• Medication profile• DRG 552 pacer w/o other major CV dx.
– Group 2 two main physicians one uses more expensive device– Group 3 1 pt longer LOS
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Really Why should I careCMS Is Changing the Rules
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Refinement of the Relative WeightCalculation
• Pattern of increasing Medical weights and lowering Surgical weights remains• Transition period mitigates swings in payment• Process: 1. Standardized charges were broken into 13 cost buckets 2. National Cost-to-Charge Ratio was used to convert charges into costs 3. Standard methodology to create the weights was used• Hospital Specific Relative Value (HSRV) methodology will
NOT be used in FY 2007• Independent contractor will evaluate charge compression
with HSRV
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Refinement of the Relative WeightCalculation
Implementation of a cost-based weight methodology over
a 3 year transition period
• Year 1 – Weights based on a blend of:
– 33% cost based weights
– 67% charge based weights
• Year 2 – Weights based on a blend of:
– 67% cost based weights
– 33% charge based weights
• Year 3 – Weights based on 100% costs
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Do Severity and Risk Adjustment Make a Difference?
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Application of Final Rule
DRG 148 (Major small and large bowel procedures w/cc)
– CMS medical advisors felt the presence of major gastrointestinal diagnoses identifies patients with a higher level of severity.
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Pattern in Most Hospitals
0
10
20
30
40
50
60
70
80
Minor SI Moderate SI Major SI Extreme SI
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Follow the Money
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Severity Adjusted DRGs – On Hold
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What Questions Does your Organization Need to ask
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Present on Admission
• Deficit Reduction Act of 2005 (DEFRA)– Requires Present on Admission (POA) indicators to
be collected for all Medicare patients beginning this Oct.
– Requires CMS to select 2 or more infectious that are high cost/High volume to focus on.
– Require CMS to begin excluding those infections when the are identified as not present on admission from the calculation of the DRG beginning Oct 1 2008
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Case Example
No ComplicationCurrent Payment with Complication
Simulated Payment Hosp Acquied Infection
Principle Diagnosis Atrial Fibrillation Atrial Fibrillation Atrial Fibrillation (POA)
Secondary Diagnosis Pneumonia
Pneumonia
(Not POA)
Procedures Temp Pacemaker Temp Pacemaker Temp Pacemaker
Mechanical Ventilator
Mechanical Ventilator
Medicare DRGCardiac Arrhythmia W/O CC
Cardiac Arrhythmia W/O CC
Cardiac Arrhythmia W/O CC
Medicare Weight 0.5227 0.8287 0.5227
Reimbursement $3,839 $6,086 $3,839
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Risk Adjustment for Quality Indicators
• Agency for Healthcare research and Quality released comprehensive set of quality indicators intended to flag potential quality problems.
• UCSF - Stanford Evidence based Practice center developed these indicators using APR-DRGs as the basis for risk adjustment
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Preparing for Report Cards
Hospitals must:
• Be proactive in evaluating data– Prevent surprises: Anticipate your performance ratings– Prepare well-planned responses to negative ratings– Develop improvement programs to correct any identified
problem areas
• Invest in the quality of medical records, documentation, and information systems– Severity-of-illness and risk-of-mortality adjustments require a
thorough reporting of patients’ diagnoses– Incomplete coding can negatively affect the evaluation of the
institution on the report cards
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Step One
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Public Reporting of Data
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Change Pattern -- Volumes
0
500
1000
1500
2000
2500
3000
Minor SI Moderate SI Major SI Extreme SI
2005
2006
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Yes Education Is a Good thingChange in percent of total
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
Minor SI Moderate SI Major SI Extreme SI
2005
2006
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Change Mortality Pattern
0
0.1
0.2
0.3
0.4
0.5
0.6
Minor MR Moderate MR Major MR Extreme MR
2005
2006
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Total vs. Ratio (Act/Exp)
0
10
20
30
40
50
60
70
80
Oct 20
03
Dec 2
003
Feb 2
004
Apr 2
004
Jun
2004
Aug 2
004
Oct 20
04
Dec 2
004
Feb 2
005
Apr 2
005
Jun
2005
Aug 2
005
Oct 20
05
Dec 2
005
Feb 2
006
Apr 2
006
Jun
2006
Aug 2
006
Oct 20
06
Dec 2
006
Medicare Mortality
Risk Adj Medicare Mortality
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Ratio of actual to expected
0.9
1
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
Oct 20
03
Dec 2
003
Feb 2
004
Apr 2
004
Jun
2004
Aug 2
004
Oct 20
04
Dec 2
004
Feb 2
005
Apr 2
005
Jun
2005
Aug 2
005
Oct 20
05
Dec 2
005
Feb 2
006
Apr 2
006
Jun
2006
Aug 2
006
Oct 20
06
Dec 2
006
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Risk Adjustment Length of Stay
5
5.2
5.4
5.6
5.8
6
6.2
6.4
Jan-Mar2004
Apr-Jun2004
Jul-Sep2004
Oct-Dec2004
Jan-Mar2005
Apr-Jun2005
Jul-Sep2005
Oct-Dec2005
Jan-Mar2006
Apr-Jun2006
Jul-Sep2006
Oct-Dec2006
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Remember Newton’s Third Law
"For every action, there is an equal and opposite reaction."
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Coded Complications
0
0.5
1
1.5
2
2.5
3
3.5
Jan-Mar2004
Apr-Jun2004
Jul-Sep2004
Oct-Dec2004
Jan-Mar2005
Apr-Jun2005
Jul-Sep2005
Oct-Dec2005
Jan-Mar2006
Apr-Jun2006
Jul-Sep2006
Oct-Dec2006
Nervous System Complications 4.5
0
2
4
6
8
10
12
14
Jan-Mar2004
Apr-Jun2004
Jul-Sep2004
Oct-Dec2004
Jan-Mar2005
Apr-Jun2005
Jul-Sep2005
Oct-Dec2005
Jan-Mar2006
Apr-Jun2006
Jul-Sep2006
Oct-Dec2006
Cardiac Complication 4.1
0
0.5
1
1.5
2
2.5
3
3.5
4
Jan-Mar2004
Apr-Jun2004
Jul-Sep2004
Oct-Dec2004
Jan-Mar2005
Apr-Jun2005
Jul-Sep2005
Oct-Dec2005
Jan-Mar2006
Apr-Jun2006
Jul-Sep2006
Oct-Dec2006
Peripheral Vascular Complications 4.4
0
1
2
3
4
5
6
7
8
9
10
Jan-Mar2004
Apr-Jun2004
Jul-Sep2004
Oct-Dec2004
Jan-Mar2005
Apr-Jun2005
Jul-Sep2005
Oct-Dec2005
Jan-Mar2006
Apr-Jun2006
Jul-Sep2006
Oct-Dec2006
Respiratory Complications
4.0
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What Have We Learned
• My kids would say nothing.