Performance Measurement in the Hospital Outpatient Setting. Background

02/01/2008

A variety of studies have documented substantial deficiencies in the quality of care delivered across the United States (Asch et al., 2006; Institute of Medicine [IOM], 2000, 2001, 2005; Schuster et al., 1998; Wenger et al., 2003). While there are no comparable studies of the quality of care delivered in the hospital outpatient setting, pervasive deficits across the health system suggest similar problems likely exist, particularly since a large fraction of care delivered in this setting is ambulatory care for acute and chronic conditions where deficits in quality have been amply demonstrated.
In addition to potential quality of care deficits in the hospital outpatient setting, the Centers for Medicare & Medicaid Services (CMS) has observed growth in the volume of services and costs for care delivered in this setting. In 2006, care provided to Medicare beneficiaries in the hospital outpatient setting accounted for 7 percent of total Medicare program spending (excluding beneficiary cost sharing) (MedPAC, 2007a), and overall spending nearly doubled between 1996 and 2006, reaching $31.6 billion (MedPAC, 2007b).

Under Section 109 of the Tax Relief and Health Care Act of 2006 (TRHCA)1, Congress established new requirements for hospitals serving Medicare beneficiaries to report outpatient quality data to secure their full annual update to the Outpatient Prospective Payment System (OPPS) fee schedule. This new program, the Hospital Outpatient Quality Data Reporting Program (HOP QDRP), will begin in January 2008. The HOP QDRP builds on other CMS initiatives that are measuring and making transparent quality information and beginning to use incentives to promote high-quality and cost-effective care — key steps identified in the Department of Health and Human Services (DHHS) Secretary’s “four cornerstones” for building a value-driven health care system (Leavitt, 2006).

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