Healthcare Horizons

Health Equity Strategy: 6 Things to Know About New CMS Rules

Robert Jones

Three arrows pointed in various directions are superimposed on a green hilltop overlooking a suburb

Starting in 2023, the Hospital IQR Program will include new rules for health equity strategy. Hospitals are required to attest to their equity efforts in 5 areas, and results will be publicly posted. In addition to explaining the rules in detail, we offer 6 actionable steps that healthcare leaders should consider ... starting now.

The Centers for Medicare & Medicaid Services has published its final rule for the FY 2023 Hospital Inpatient Prospective Payment System, and most media coverage has focused on immediate financial concerns such as uncompensated care payments (down $318 million) and operating payments (up $1.4 billion, net).

At Ascendient, we’re busy updating our financial models to reflect next year’s reimbursement levels, but as a healthcare strategic planning firm, we also take a slightly longer view. In search of the biggest changes affecting providers over the next two to five years, we have combed through all 2,087 pages of the rule, and what struck us most was the emphasis on health equity strategy.

Section IX of the rule looks at health equity from multiple angles, including hundreds of pages devoted to topics such as measurement, reporting requirements, and the effects of climate change. This is a subject that got relatively little attention prior to 2020, so the shift is remarkable – as is the timetable.

CMS wants every hospital to implement a health equity strategy, and the first big step – new data reporting ­– starts in the 2023 calendar year. In this post, we’ll look at some of the implications for the 2023 to 2025 timeframe.

Defining Health Equity

First, a definition is in order. To CMS, health equity means that “everyone has a fair and just opportunity to attain their optimal health regardless of race, ethnicity, disability, sexual orientation, gender identity, socioeconomic status, geography, preferred language, or other factors that affect access to care and health outcomes.”

Under the Biden Administration, this has become the first of six strategic pillars for Medicare, which explains some of the urgency around implementation. For example, in a rather unusual move, CMS is implementing several required measures next year without awaiting endorsement by the National Quality Forum.

Some of that urgency could dissipate under a future administration, but it’s important to note that Republicans, too, are largely onboard with the principle of health equity, even if they would measure or prioritize it differently.

In other words, health equity is here to stay, and hospital leaders should begin to think about it – and act on it – at the strategic level.

Updating your strategic plan to sharpen and break out health equity initiatives shouldn't be terribly expensive, and it can position your hospital to stay ahead of the curve as standards continue to evolve.

Measuring Health Equity in 2023

CMS has the stated goal of seeing a health equity strategy in place at every acute care hospital, and the Inpatient Quality Reporting program (IQR) is where the agency will start pushing in that direction.

For calendar year 2023, all of the roughly 3,000 hospitals participating in the IQR program will be required to submit data for a new structural measure, the Hospital Commitment to Health Equity. In future years, the agency has signaled that it intends to roll out process measures and outcome measures for health equity – and these could well have payment implications – so the new requirement is worth taking seriously.

"Our approach to developing health equity measures is incremental and will evolve over time to capture healthcare equity outcomes in the Hospital IQR Program. We additionally believe this [attestation] measure to be a building block that lays the groundwork for a future meaningful suite of measures that would assess progress in providing high-quality healthcare for all patients regardless of social risk factors or demographic characteristics" (p. 1190).

The 2023 attestation includes five “domains of commitment,” with one to four “elements” or “competencies” falling under each domain. Hospitals will affirm as many competencies as they can, with the maximum being 11. If every competency within a domain is affirmed, then the hospital will get credit for the entire domain – there is no such thing as partial credit.

Here are the five domains and their corresponding elements:

Domain 1, healthcare equity as a strategic priority
Domain 2, data collection for healthcare equity
Domain 3, data analysis for healthcare equity
Domain 4, health equity quality improvement
Domain 5, leadership engagement in health equity strategy

For scoring purposes, hospitals won’t get credit for affirming individual competencies. Only domain scores will be publicly reported on the HHS Care Compare website, so the maximum score is 5. In theory, a hospital could affirm six out of 11 competencies and still receive a score of zero due to the all-or-nothing scoring on domains.

CMS has acknowledged that this attestation measure – and particularly the public reporting of results – is controversial. As required by the Affordable Care Act, the measure was vetted by several workgroups convened by the National Quality Forum (NQF). All groups expressed reservations, and the Hospital Workgroup voted against supporting the rule (p. 1190, footnote 472).

CMS says that it considered a more incremental approach, but in the end, the agency “decided to propose mandatory reporting given the importance of this measure and how it aligns with our healthcare quality goal of closing the racial and ethnic disparity gaps” (p. 1193).

Again, that level of commitment might not survive the vagaries of political leadership, but we believe that the issue is here to stay and that hospitals will experience increasing pressure from policymakers, patients, families, and employees to show that health equity features explicitly in their strategy.

Getting Strategic About Your Equity Strategy

With all of that in mind, what should hospital leaders be doing right now? We have six specific considerations:

First, make sure you report, period. Even if you can’t claim a single competency for 2023, you’ll want to log onto your QualityNet portal and complete the (non) attestation. As of now, there is no financial penalty for scoring a zero, but failing to report required data under the Hospital IQR Program can automatically reduce your Medicare reimbursement rate by 25%.

As CMS itself notes in the final rule: “[H]ospitals will receive credit for the reporting of their measure results regardless of their responses to the attestation questions because the Hospital IQR Program is a pay-for-reporting program” (p. 1195).

Second, don’t hide behind your system. There seems to be no such thing as system-wide attestation. The rule explicitly states that every organization with a CMS certification number (CCN) needs to submit its own report. This is only logical from an equity standpoint because, again, stratified data helps to show who’s getting care and who isn’t. Reporting at the system level could mask significant differences from one facility to the next.

Third, look for leverage in the five domains. Remember, CMS is reporting only domain scores, so you get no credit unless you can affirm all of the competencies within any domain. Looking for a quick win? We’d suggest focusing on Domain 4, which has only one element: “Our hospital participates in local, regional, or national quality improvement activities focused on reducing health disparities.” Participating in a health equity conference or working group is a great way to get started on the journey and earn a full domain point right from the start.

Fourth, be strategic about your investments. This is almost the flip side of the point above. Recognizing that health equity is an emerging standard – and one that is unusually subject to political pressures – hospital leaders need to think strategically about how and where they invest their limited resources.

Our suggestion: Look for ways to invest in long-term, systemic change rather than short-term rewards. Specifically, Domain 2, Data Collection, is extremely important – but very much a moving target. CMS has yet to issue standards for coding and stratifying patient data, so a big investment in 2023 could be outdated in 2024. Because decisions around data management are complex and interconnected, we might advise waiting for greater clarity at the federal level before committing major new resources to Domain 2.

Instead, we recommend that hospitals invest in Domain 1, Equity as a Strategic Priority. Updating your strategic plan to sharpen and break out health equity initiatives shouldn’t be terribly expensive, and it can position your hospital to stay ahead of the curve as standards continue to evolve. That’s not only the right thing to do ­– it’s also where you want to be when CMS inevitably begins linking payments to health equity.

Fifth, don’t overlook your CHNA. Speaking of Domain 1, some of the requirements for identifying priority populations, key stakeholders, and health disparities might seem daunting and expensive. But, if you’re a nonprofit hospital with a good Community Health Needs Assessment, you’ve actually done a lot of this work already.

Go back to your CHNA firm to see if there are additional ways to stratify existing data – or even to re-frame the data you already have. We’ve been looking over CHNA reports that we prepared for clients recently, and we’re struck by how much of that content can be directly linked to the competencies listed under Domain 1. Again, the goal is to shift your thinking and start on the equity journey without breaking the bank.

We’re very partial to nonprofit hospitals, so it’s good to see that they might actually have an advantage in complying with the new rule.

Finally, think about your messaging. We anticipate that many independent hospitals and smaller systems will score quite badly in 2023 because CMS chose to implement its rule with no ramp-up period. Patients probably won’t care much in the beginning, but we expect that some employees might ask pointed questions. How should hospital leadership respond?

In our view, CMS offers some helpful messaging within the rule itself. In several places, the agency clarifies that the goal of reporting is growth and direction, not some sort of label for comparative purposes. For instance: “[W]e do not anticipate that every hospital will be able to affirmatively attest to each domain. … With each additional year, we hope to see that each hospital is able to attest to more domains as part of their growth strategy and commitment to equity-focused organizational improvements. We expect variability across hospitals, and we believe this is important as part of our long-term strategy to improve health equity.”

In other words, health equity is a journey, and the entire industry is just taking the first steps. As long as your hospital is genuinely trying to integrate health equity at the strategy level, then it’s fair to say, “CMS didn’t intend this as a label. Watch us grow and improve; that was the whole point of the scoring exercise.”

Renewing Ascendient's Commitment

As we noted just above, health equity is a journey – both for healthcare providers and for healthcare consulting firms like Ascendient. Like our clients, we as a firm believe that everyone deserves the best possible care regardless of their race, identity, or social circumstances. It’s a principle that has been woven through our work from the very beginning, but we’re taking this opportunity to make our commitment clear:

  • While we never dictate the contents of a strategic plan, we are redesigning our own process to ensure that every engagement can deliver a plan that is fully compliant on Domain 1, if the client is committed to health equity.
  • After delivering a strategic plan, we will continue to work with hospital leadership to ensure they can attest to Domain 5, Leadership Engagement.
  • Every CHNA engagement will be structured to align with the new rules, allowing clients to advance their health equity goals as efficiently as possible.
  • Every engagement, regardless of type, will be reviewed by a health equity data analyst to ensure that clients can stratify and disaggregate their data in ways best suited to their communities.

Has CMS crafted a perfect rule for measuring and reporting health equity? Far from it. By the agency’s own admission, the rule is likely to undergo significant change and evolution.But if the goal was to raise health equity to the strategic level in hospital decision making, that’s something we can support. And given the way we’re changing our own thinking, we’d say it’s working.

If you're ready to re-examine your strategic plan or your CHNA through a health equity lens, please reach out. We'd love to help.