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Does CMS’ Meaningful Measures Initiative Boil Down to Cost-Benefit Analysis?
Jackson Williams, JD
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Does CMS’ Meaningful Measures Initiative Boil Down to Cost-Benefit Analysis?

Jackson Williams, JD
Cost-benefit analysis for quality measures has emerged as the cornerstone of CMS’ Meaningful Measures initiative.
Am J Manag Care. 2019;25(2):59-60
In late 2017, CMS announced a “Meaningful Measures” initiative that it said would identify “the highest priorities for quality measurement and improvement” by assessing only “those core issues that are the most critical to providing high-quality care and improving individual outcomes.”1 Skeptics noted that the matrix posted by CMS included 4 “strategic goals”; 6 “specific, overarching quality priorities”; 6 “cross-cutting criteria,” to include burden reduction; and 19 Meaningful Measure areas, which taken together seemed to contradict its accompanying promise to produce “parsimonious” measure sets.

Now, with the release of the Inpatient Prospective Payment System (IPPS) and other payment rules, application of the “burden reduction criterion” has become evident. The IPPS rule2 introduced a new factor to be applied in determining whether to remove a measure from a value-based purchasing (VBP) program: “Factor 8: the costs associated with a measure outweigh the benefit of its continued use in the program.”

The proposed rule explained that to minimize costs associated with quality measures, CMS will consider “the burden associated with reporting” and “the costs associated with implementing and maintaining the program.” The rule also stated that “when these costs outweigh the evidence supporting the continued use of a measure in the Hospital VBP Program, we believe it may be appropriate to remove the measure from the program.”

Cost-benefit analysis is hardly new to federal rulemaking activity. Upon taking office in 1981, President Ronald Reagan promulgated an executive order (EO) mandating a formal cost-benefit analysis of new federal agency regulations. In 1993, President Bill Clinton ratified3 this structure in EO 12,866; it remains in force today.

Cass Sunstein, JD, the center-left legal scholar who served as federal “regulatory czar” under President Barack Obama, insists that “cost-benefit analysis has become part of the informal constitution of the US regulatory state.”4 But others further to the left strongly disagree.

Amit Narang, JD, of Public Citizen argues that “cost-benefit analysis is far more art than science and confers a false illusion of objectivity [and] should never be the basis for rejecting a proposed regulation—especially one required by law.”5 Along these lines, the Medicare Rights Center’s comment letter on the IPPS objected to Factor 8 as not sufficiently “requiring the value of the measures to beneficiaries be meaningfully considered in making” determinations.6 Even Sunstein concedes that cost-benefit analysis raises “serious questions” about “values that are hard or impossible to quantify, such as human dignity.”

In my view, cost-benefit analysis poses no inherent harm. It is probably an implicit and underlying, if unconscious, calculation made anytime a regulation is or is not proposed. For instance, oysters are a source of foodborne illnesses, but nobody has seriously proposed banning raw bars. Why not? Because we intuitively understand that to deprive consumers of oyster bars would impose an intolerable cost relative to safety benefits. Formalized analyses are brought to bear in closer cases, and there is if nothing else a heuristic value to thinking about and attempting to quantify the costs of regulation and weighing them against the costs of nonregulation, which usually involve problems of information asymmetry and negative externalities. The latter problems aren’t hard to quantify, and plenty of proconsumer regulations have been promulgated under EO 12,866.

Factor 8 departs from precedent by performing an informal, impressionistic review rather than attempting to quantify costs and benefits. Looking at some of the actual measures that CMS would jettison under the cost-benefit test illuminates issues raised and sidestepped in the agency’s analysis.

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