Medical Device Daily Washington Editor

WASHINGTON – Software is a vital part of any modern endeavor in healthcare, but its influence on skeptics in the medical establishment is not always what federal agencies would like.

Such was one conclusion to be drawn from the discussion of current computer programs that benchmark the performance of physicians by an advisory committee of the Centers for Medicare and Medicaid Services (CMS; Baltimore) meeting earlier this week. And this would lead observers of the effort less than elated at the prospects for payment reform.

Thomas Valuck, MD, a medical officer at the Center for Medicare Management at CMS, went out of his way to ensure the Physician Payment Advisory Commission (PPAC) that the desired state of efficiency “is not arbitrary cost cutting,” but is a patient-centered effort to cut down on “waste, overuse and misuse of medical resources.” The CMS benchmark will consist of a ratio of actual resources used by a physician to expected resources, assuming an “equivalent high quality of care.”

CMS said it intends to make any and all measurements of physician practices fair by factoring in “relevant practice differences that the physician cannot control.”

Valuck also mentioned that the Medicare Payment Advisory Commission (MedPAC) had turned in its report on the physician-level evaluation of “grouper” software to Congress, a study based on a sampling of 5% of Medicare beneficiaries. The next stage of the program for evaluating the two computer programs will be to analyze all Medicare claims “for some region for some period of time.”

Valuck described grouper evaluations as those that “organize claims data into a set of clinically coherent and easily compared [treatment] episodes,” but with the method of organizing them in this manner proprietary to the software involved. CMS will also take a close look at the underlying logic to the means of organizing episodes.

In its June report to Congress, MedPAC noted that the two grouper programs “differ in their logic but have some similarities.” They both are said to “acknowledge disease severity and complexity when creating episodes, but the Medstat Episode Groups program (Ann Arbor, Michigan) can break down a single episode “into three stages, based on the progression of the condition.”

The other program, Episode Treatment Groups (ETG), is published by Ingenix (Eden Prairie, Minnesota).

MedPAC indicated that “for certain conditions, the two groupers agree fairly well on the number of episodes created” but that they diverge fairly sharply in the case of a couple of conditions, including urinary tract infection.

Using CMS's data, the ETG program reported more than 137,000 episodes, a sharp contrast to the 106,900 reported by the MEG software. ETG also is said to “have higher – sometimes substantially higher – average total payments per episode,” including “more than twice those of MEG” for congestive heart failure (from $3,161 to $1,394).

Another measure of interest is one that gauges the use of imaging equipment, with echocardiograms of the heart serving as the testbed for this first round (the second round to compare the use of MRI with that of computed tomography for evaluation of chest pain).

According to Valuck, the program objective is to determine the feasibility of “disseminating confidential, claims-based resource use reports to physicians,” a recommendation made by MedPAC.

The echocardiography study, which is focused on a much smaller set of disease states than the grouper software study reported by MedPAC, is ongoing in Wisconsin and Ohio, with vetting by the Cleveland Clinic (Ohio) and the University of Wisconsin-Madison. From that vetting effort, CMS discovered that similar reports sent to providers by private payers “get a cursory look and then go into the round file.” Physicians also felt that the CMS data reports they saw did not appear accurate, which, according to Valuck, led doctors to conclude that they “can't trust them.”

These reports on use of imaging resources led the agency to several conclusions, one of the more obvious being that “physicians understand their practices from a patient-by-patient perspective, not from an aggregate statistical perspective.”

Another conclusion was that the claims data reports are largely “not meaningful or actionable for physicians.”

However, one unexpected outcome from the imaging resource use reports is that the cost of crunching data and the resultant disseminating reports is greater than the savings CMS might yield. “That's why I'm curious as to why private payers continue to do this,” Valuck mused.

CMS administrator Mark McClellan dashed in for a briefing in the afternoon session – “dash” speed being his usual MO – and he described the PPAC advisory council as “more important than ever before.”

“What I've found particularly valuable from your input,” he said, “is that not only have you not only broadened the perspective of practicing physicians to the agency, but you've done it in a way that helps us take rapid action. I think that this close interaction is going to be even more important going ahead.”

McClellan noted that while the issues of appropriate payments will not get any easier, the work of advisory committee is meant to ensure continued progress.

Over the next couple of months, “I see the agency being very involved in legislative interests toward getting a better payment system for physicians,” he assured committee members in his most reassuring tone.

He forecast that CMS is “continuing to make progress toward being what I like to call a public health agency because you cannot be the largest health payer in the world and not recognize that your actions have a big impact on the way that healthcare is provided.” However, McClellan did not elaborate on that rather sweeping assessment.