Knowledge Base Article

“We rarely talk about cost. We talk about waste, quality, and safety, and we find our costs go down.”

• Patrick Hagan, former COO of Seattle Children’s Hospital

Risk Factor: Socio-economic Status

The Establishing Beneficiary Equity in the Hospital Readmission Reduction Program Act of 2015 (S. 688 and H.R. 1343) would have required the CMS to account for socio-economic status when calculating risk-adjusted readmission penalties. This bill garnered support from the Association of American Medical Colleges as well as the American Hospital Association. You can read more about this Act in a related MMP article.

A year later the House Ways and Means Committee released the Helping Hospitals Improve Patient Care Act of 2016 (H.R. 5273) that included a modified version of H.R. 1343. This latest version of the bill was passed in the House and was sent to the Senate where it was read twice and referred to the Committee on Finance. 

Fast Forward to the 2019 IPPS Proposed Rule which includes a discussion about “Accounting for Social Risk Factors” (including socioeconomic status) in the following Programs discussed in the Proposed Rule:

• Hospital Readmission Reduction Program (HRRP),
• Hospital Value Based Purchasing (VBP) Program,
• Hospital Acquired Condition (HAC) Reduction Program,
• Hospital Inpatient Quality Reporting (IQR) Program,
• IPPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program, and
• Long Term Care Hospital Quality Reporting Program (LTCH QRP).

Accounting for Social Risk Factors

CMS notes their “commitment to ensuring that medically complex patients, as well as those with social risk factors, receive excellent care. We discussed how studies show that social risk factors, such as being near or below the poverty level as determined by HHS, belonging to a racial or ethnic minority group, or living with a disability, can be associated with poor health outcomes and how some of this disparity is related to the quality of health care.”

Specific CMS aims within their core objectives include:

• Improving health outcomes,
• Attaining health equity for all beneficiaries, and
• Ensuring that complex patients as well as those with social risk factors receive excellent care.

The Office of the Assistant Secretary for Planning and Evaluation (ASPE) and the National Academy of Medicine

The ASPE and National Academy of Medicine have examined the influence of social risk factors in the CMS value-based purchasing programs. To date, as required by the IMPACT Act of 2014, ASPE has provided a report to Congress where they found that “in the context of value-based purchasing programs, dual eligibility was the most powerful predictor of poor health care outcomes among those social risk factors they examined and tested.” ASPE is continuing to examine this issue in a second report required by the IMPACT Act that is due to Congress in the fall of 2019.

National Quality Forum (NQF)

CMS noted in the FY 2018 IPPS/LTCH PPS Final Rule, that the NQF “undertook a 2-year trial period in which certain new measures and measures undergoing maintenance review have been assessed to determine if risk adjustment for social risk factors is appropriate for those measures.” This period ended April 2017.

NQF Trial Conclusion:

The NQF notes in the July 2017 Social Risk Trial Final Report Abstract that “the trial period has illuminated the feasibility of adjusting measures for social risk, with 17 measures endorsed by NQF for factors such as a person’s level of education.” The NQF has extended the socioeconomic status (SES) Trial, allowing further examination of social risk factors in outcome measures.

The Centers for Medicare and Medicaid Services

CMS solicited feedback in the FY and CY 2018 Proposed Rules on which social risk factors provide the most valuable information to stakeholders for illuminating differences in outcome rates among patient groups. Commenters encouraged CMS to stratify measures by other social risk factors such as age, income, and educational attainment (82 FR 38404).

CMS Next Steps

As next steps, CMS is considering the following:

• Options to reduce health disparities among patient groups within and across hospitals by increasing the transparency of disparities as shown by quality measures,
• Implementing a hospital-specific disparity method that would promote quality improvement by calculating difference in outcome rates among patient groups within a hospital while accounting for their clinical risk factors,
• Implementing a method to assess hospitals’ outcome rates for subgroups of patients, such as dual eligible patients, across hospitals, allowing for a comparison among hospitals on their performance caring for patients with social risk factors.

Specific to the Hospital IQR Program, CMS acknowledges the complexity of interpreting stratified outcome measures and plans to stratify Pneumonia Readmission measure (NQF #0506) data by highlighting both hospital-specific disparities and readmission rates specific for dual-eligible beneficiaries across hospitals for dual-eligible patients in hospitals’ confidential feedback reports beginning Fall 2018. CMS is considering expanding confidential hospital feedback reports for other measures and eventually making this data publicly available on the Hospital Compare website.

CMS believes “the stratified results will provide hospitals with information that could illuminate disparities in care or outcome, which could subsequently be targeted through quality improvement efforts. We further believe that public display of this information could drive consumer choice and spark additional improvement efforts.” CMS plans to continue to work with the ASPE, the public and key stakeholders to “identify policy solutions that achieve the goals of attaining health equity for all beneficiaries and minimizing unintended consequences.”