CMS Value-Based Purchasing Program and ICD-10

Anita Archer CPCThe hospital Value-Based Purchasing (VBP) program continues a longstanding effort by CMS to forge a closer link between Medicare’s payment systems and improvement in health care quality, including the quality and safety of care in the hospital setting. In recent years, CMS has undertaken several initiatives, including demonstrations and quality reporting programs, to lay the foundation for rewarding health care providers and suppliers for the quality of care provided. This is achieved by tying a portion of Medicare payments to performance on quality measures. The transition of these initiatives to value-based purchasing is intended to transform Medicare from a passive payer of claims based on volume of care to an active purchaser of care based on the quality of services its beneficiaries receive. The hospital VBP program is one of multiple reforms that are dramatically changing how Medicare pays hospitals.

Judy Monestime, MBA, CPCVBP began as a pilot program in the Deficit Reduction Act of 2005; CMS was authorized to develop a plan to commence in FY 2009. The Hospital Inpatient Value-Based Purchasing Program (Hospital VBP) became permanent under Section 3001(a) of the Affordable Care Act. The May 5, 2011, Federal Register indicated that the program would apply to payments for discharges occurring on or after October 1, 2012. And, [scoring the Hospital VBP program will be based on whether a hospital meets or exceeds the performance standards with respect to the measures,” VBP breaks reimbursement down into two measurable components: Clinical Outcomes and Patient Satisfaction. Improved Clinical Outcomes will decide 70 percent of reimbursement while 30 percent will be decided by Patient Satisfaction Surveys (Cheung, 2012). The fundamental principle behind VBP was to ensure that hospitals were not only being reimbursed for the quantity of services provided, but the quality, as well. Currently performance measure populations are defined using ICD-9-CM. Performance measures will need to be re-specified with the more specific ICD-10 codes.

ICD-10 and VBP share an essential commonality improving patient care. The legislative history of ICD-10 adoption indicates that its fundamental objectives are to improve the quality of care and provide better data. Similarly, CMS set forth the primary purpose of quality health care – “the right care for every person every time.”

As we move clinical documentation forward into the world of ICD-10 and value-based purchasing, the accurate coding and reporting of complications of care will become even more of an area of focus for healthcare facilities.

VBP depends on key factors such as severity adjusted data, dedication to quality initiatives, and patient safety ethical assignment of codes, and billing for services and seamless transition of data streams to ICD-10. Clinical documentation is paramount to a successful transition to ICD-10 and value based purchasing. How accurately a patient's hospital visit is documented will ultimately affect VBP incentive payments and whether reimbursements dip, grow, or stay the same during the ICD-10 transition. Stated are several best practice approaches:

Initiate training and technology changes little by little. Initially consider adding a select portion of the expanded ICD-10 codes into the existing coding system, working in more new codes over time.

Illustrate how the current documentation under ICD-9 differs from what will be required under ICD-10. As part of ongoing training, encourage physicians to get used to mention all the complicating factors that will be needed under ICD-10.

By targeting documentation issues will help the physicians realize that current process(s) may work now, but under ICD-10, more specificity and granularity will be required about what the procedure entailed and what complications occurred with the disease condition(s). ..Practices should provide the physicians with feedback so that they can understand what they need to start adding to their documentation now for ICD-10 before October 1, 2014, when it starts affecting revenue. Getting physicians engaged now is essential to a smooth roll-out. "Getting them involved early on and helping them understand the magnitude of this and the effect it will have on them personally on the front lines makes a difference. It gives them a chance to help guide the training and strategies that will help them in their everyday work.

"[CMS] will look at those mortality measures over three years, which means hospitals need to work on [documentation] now or it could potentially hurt [the organization],"Organizations need to be sure their clinical documentation improvement programs are up to snuff in order to accurately gauge where clinicians may need to improve to meet the ICD-10 requirements


Intersecting ICD-10, VBP Can Enhance Patient Care and Practice Revenue; Blog | February 07, 2013 | Coding, Healthcare Reform, ICD-10, Law & Malpractice, Medical Billing & Collections; By Rachel V. Rose, JD, MBA

Retrieved from: http://www.physicianspractice.com/blog/intersecting-icd-10-vbp-can-enhance-patient-care-and-practice-revenue

Cheung, K. M. (2012, February 2). News- Hospitals ready for value-based purchasing with higher patient satisfaction. Retrieved March 1, 2012, from FierceHealthcare:

Retrieved from: http://www.fiercehealthcare.com/story/hospitalsready-value-based-purchasing-higher-patient-satisfaction/2012-02-02

Will ICD-10-CM Enhance the Ability to Report Complications of Care More Accurately and Appropriately? Created on Tuesday, 13 November 2012 05:00 Written by Lisa Roat, RHIT, CCS, CCDS

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Health Reform and ICD10 as a Strategic Enabler – N. Leon-Chisen; AHIMA ICD-10 Summit 2012

2 Tactics for ICD-10 & VBP Clinical Documentation Karen Minich-Pourshadi, for HealthLeaders Media , February 6, 2012 - HealthLeaders Media

Retrieved from: http://www.healthleadersmedia.com/print/FIN-276206/2-Tactics-for-IC...


Retrieved from: http://www.ihatoday.org/uploadDocs/1/vbpfaqfinalrule.pdf


Anita Archer, CPC, is a Director of Regulatory Compliance at Hayes Management Consulting. She is a Certified Coder and AHIMA Approved ICD-10 CM/PCS trainer. Anita has more than 30 years of experience in the healthcare industry is focused on revenue cycle optimization, ICD-10 preparedness and business process improvement.

Judy Monestime, MBA, CDIP, CPC, is the Vice President of ICD-10 at The CODESMART™ Group. She is a Certified Professional Coder and AHIMA Approved ICD-10 CM/PCS trainer. Judy is a well-recognized consultant, keynote speaker, and author. Her background is in revenue cycle, with a focus on clinical documentation, coding, and denial management. She has led several ICD-10 assessment and implementation projects for providers and payers, including evaluating both the business and technical processes and systems for key potential impacts of ICD-10 and confirming ICD-10 impacts by process area.

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