Patient Safety in an Era of Value Based Payment: What brings you into the Emergency Department Today?

January 2015

In an era of healthcare redesign, Emergency Medicine faces new challenges in serving as the safety net. As value based payment models become a reality and care shifts away from the hospital, it is time to move beyond the walls of the hospital to the outside environment.

The Shift to Value-Based Payment Systems

The move to a value-based payment system in health care is not new.  What is new is the heightened commitment by the Obama administration to accelerate the transition from paying for volume to paying for value.  On January 26, 2015, Health and Human Services Secretary Sylvia M. Burwell announced measurable goals and a timeline to move the Medicare program, and the health care system at large, toward paying providers based on the quality, rather than the quantity of care they give patients. HHS has set a goal of tying 30 percent of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements by the end of 2016, and tying 50 percent of payments to these models by the end of 2018[1].

On April 16, 2015, President Obama signed into law H.R. 2, the “Medicare Access and CHIP Reauthorization Act of 2015” (MACRA), which reforms Medicare payment policy for physician services and adopts a series of policy changes affecting a wide range of providers and suppliers.[2]   MACRA includes clear financial incentives for health care professionals to choose to participate in Alternative Payment Models (APMs) over FFS reimbursement.  In addition, MACRA also includes provisions and funding to expand the focus to outcome measures as opposed to process measures.

Both of these events will accelerate the move to a value-based payment system in health care across public and private payers alike.

The Balance Between Effective and Efficient Care

If one considers the value equation to be Value=Quality/Cost, it becomes evident these forces are inter-related and that a tension exists between the two.  If value-based payment models predominantly focus on improving efficiency solely based upon cost, one might imagine unexpected consequences and threats to effective care.  Vigilance and a direct effort to study these trends will be critical to ensure that patients are not harmed in the effort or potential models of efficiency are not fully implemented.

The Medicare innovation project, Bundled Payments for Care Initiative (BPCI) provides an opportunity to look at what the future may hold. The CMS recently published a report regarding the early findings from the initiative[3]. The report includes a comparison of the results for Model 2 (Acute and non-acute care combined into one episode of care) for non-spine surgical orthopedics participants in the first year of the program to a matched set of non-participants. The report noted that:

  • Changes in the anchor hospitalization length of stay began before the risk period began.
  • A statistically significant difference in the decline in average LOS for surgical orthopedics excluding spine episodes (risk adjusted). For participants, LOS declined from 4.6 at the beginning of the baseline period to 4.3 days in the first quarter of Phase 2. For the non-participants, LOS was 4.7 days declined to 4.5 days.  The analysis suggested that the decline in LOS was associated with an increase in short stay transfers to post-acute care providers (SNF, Inpatient Rehab Facility (IRF) or Long Term Care Hospital (LTCH)).
  • The rate of admission to PAC providers declined from 66%-47%, while holding relatively steady for comparison providers (62%-60% after risk adjustment).
  • The LOS number of days in SNF went down and days in Home Health (HHA). increased when compared to the non-participants. (not statistically significant).
  • Emergency department (ED) visits (without hospitalization) for BPCI surgical orthopedic excluding spine patients within 30 days of discharge rose from 6.9% to 8.7% from baseline to the intervention period.
  • Average ED visits fell for the comparison group patients. The difference between these two patient groups is statistically significant.
What Brings You into the Emergency Department Today?

These results point to trends that may signal a rise in ED visits when adverse events occur in the post-acute care setting or home setting.  As the most likely re-entry point from these settings, emergency medicine is uniquely positioned to monitor adverse events that may occur when care shifts.

Potential areas of study and data collection:

  • What is the rate of readmissions after short-stay transfers to SNF facilities when the inpatient length of stay shortens?
  • Which adverse outcomes are associated with readmission that might have been avoided with a longer inpatient stay?
  • Which adverse outcomes are procedure-related, inpatient care-related or related to lapses in safety in the external environment?
  • What happens to patients who are discharged to home with or without home health instead of a post-acute care facility?
  • How many patients arrive at an emergency department other than the one where their surgery was performed (A soon to be published study puts the number at around 20%)?
  • What is the cost of transferring patients who are being covered in a value based payment model to their original facility?
  • What is the rate across procedures for return visits to the ED over 90 days post-surgery?
  • What are the most frequent ED diagnoses associated with ED re-evaluation?
The Imperative for Emergency Departments Monitoring of Potential Adverse Events and Outcomes that Result from Adoption of Alternative Payment Models

Emergency Department (ED) visits that lead to readmission are frequently included in performance metrics as they are captured in traditional claims data.  Unfortunately, some early value-based programs tend to look at all post-acute care ED visits and readmissions as inappropriate or avoidable.  This is short-sighted.  A payment system that begins to reward the shifting of clinical risk between providers and embraces process efficiency may actually put patients at higher risk for adverse events by discharging them prematurely or choosing a site of care that is not appropriate.

Health systems engaged in adopting alternative payment models should think of ED visits as a lead indicator signaling when patient safety or quality are compromised. This knowledge can then inform better discharge planning so that the return visit is avoided when appropriate and encouraged when patients experience complications that would have traditionally occurred in the inpatient setting.  How should health care stakeholders shift their view of their emergency departments?

For health care systems, the ED is in the position of taking on the role of the “canary in the coal mine.” ED Utilization will serve as an early warning system regarding potential patient safety and quality issues that may occur when the cost of care becomes the main driver in payment reform.

For emergency medicine, this provides a research and policy opportunity, as EDs seek to position themselves as a critical service that provides value when patients are treated and safely returned to the community after an adverse event.

In the end, the success of moving payment models from volume to value will depend upon emergency medicine engagement in promoting and contributing to safe outcomes. A bold research agenda that is focused on the emergency department’s role as an early warning system will best serve patients by providing early feedback to policy makers, insurers and hospital leadership when shifting financial incentives impact care delivery.

[1] Better, Smarter, Healthier: In Historic Announcement, HHS Sets Clear Goals and Timeline for Shifting Medicare Reimbursements from Volume to Value. (2015, January 26). Retrieved from

[2] H.R.2 – Medicare Access and CHIP Reauthorization Act of 2015114th Congress (2015-2016) (2015, April 16). Retrieved from

[3]CMS Bundled Payments for Care Improvement (BPCI) Initiative Models 2-4: Year 1 Evaluation and Monitoring Annual Report. (2015, February). Retrieved from

Susan Nedza, MD, MBA

MPA has named Susan Nedza, MD, MBA, as Senior Vice President of Clinical Outcomes Management. MPA is an analytic health care consultancy that specializes in improving outcomes for patients, physicians, providers, and payers. Dr. Nedza leads the firm’s work in the areas of clinical quality assessment and improvement, bundled payments, and comparative effectiveness.

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