Adhering to CMS’s New Health Equity Measure

In August 2023, the Centers for Medicare & Medicaid Services (CMS) released the final rule for the federal fiscal year (FY) 2023 inpatient prospective payment system (IPPS) and long-term care hospital (LTCH) payment system. This final rule included many changes such as reimbursement increases for Medicare, improvements for mental health, and COVID-19-related changes.

The “Hospital Commitment to Health Equity” measure is now in its second year of building toward more equitable healthcare delivery. The measure was made mandatory as part of the 2023 Inpatient Quality Reporting (IQR), and hospitals must participate in the IQR program to receive full IPPS rates. The intent of this measure is for hospitals to make health equity a strategic priority. Given the gaps in access, quality, and outcomes for vulnerable populations, CMS is encouraging all healthcare leaders to advance health equity as prescribed by these measures. As part of this effort, the CMS Health Equity Conference is now held annually, with the first conference occurring in 2023. The second annual conference took place on May 29-30 2024, with the theme “Sustaining Health Equity Through Action”.

CMS’s 2023 health equity measure consists of 5 domains. To receive a full point for each domain, all elements within each of the 5 sectors (as outlined below) must be satisfied.

Domain 1: Equity is a strategic priority

The hospital needs to have a strategic plan for advancing health equity that:

• Identifies priority populations with health disparities

• Establishes health equity goals in the CMS domain framework and action steps to achieve them

• Outlines specific resources which have been dedicated to achieving these goals

• Describes the hospital’s approach to engaging key stakeholders such as community partners

Our take: In addition to hospitals completing their Community Health Needs Assessment (CHNA) every 3 years, hospitals need to align quantitative health equity goals with the action steps necessary to execute them to be in compliance with the CMS health equity measure. 

Additionally, hospitals need to find resources and/or technology that help in achieving the goals implicated in the CMS health equity measure efficiently. For example, cost-related medication nonadherence is a big factor in hospital readmissions: patients skip medication doses, take less, or delay filling a prescription because they can’t afford it. Having a patient assistance program with robust technology can fill this gap because whole or partial medication costs are covered in the CMS health equity framework.

Domain 2: Data Collection

The hospital is actively engaged in data collecting activities to align with CMS’s health equity measure:

• Demographic information, including self-reported race and ethnicity and/or social determinant of health (SDOH) info on the majority of patients

• Cultural sensitivity training toward the collection of demographic and/or SDOH info

• Inputting demographic and/or SDOH info collected into structured, interoperable data elements using a certified EHR technology.

‍Our take: It will be critical to collect as much demographic and SDOH data as possible across the care continuum and to store it securely. Leveraging technology and well-trained, culturally sensitive staff will be key to securing honest information from patients about their health-related social needs. This data is crucial for the establishment of the CMS health equity framework.  

Domain 3: Data Analysis

The hospital needs to stratify key performance indicators (KPIs) by demographic and/or SDOH variables to identify health equity gaps in order to address them within the CMS framework. Additionally, all this information needs to be included on hospital performance dashboards.

‍Our take: Having a robust analytics platform capable of identifying patient cohorts within hospital performance measures will be necessary. This level of information will provide visibility on inequities across different patient demographics and SDOH variables. Data collection under domain 2 will be critical for robust and meaningful data analysis toward health equity measures promoted by CMS.    

Domain 4: Quality Improvement

The hospital participates in local, regional, or national QI activities focused on reducing health disparities.

‍Our take: Hospitals always do a great job at community events but we suspect there may be opportunity for the CMS measures to focus on initiatives that specifically improve health equity within the framework as provided. In addition, marketing these activities to vulnerable populations can improve awareness and engagement. Most local communities, especially the vulnerable populations, aren’t even aware of the hospital’s free wellness services. Additionally, this domain may encourage more hospitals to partner with other providers or prompt health and advocacy groups to reduce disparities in healthcare.  

Domain 5: Leadership Engagement

Hospital senior leadership, including chief executives and the entire hospital board of trustees, must demonstrate a commitment to equity through the following:

• Annual review of a strategic plan for achieving CMS health equity measures within the prescribed framework

• Annual review of KPIs stratified by demographic and/or social factors

Our take: We believe this will be the easiest to achieve since the plan and measurement should be defined within the first 4 domains.

The first pillar of the Centers for Medicare & Medicaid Services’ (CMS) Strategic Plan is health equity. This “Hospital Commitment to Health Equity” is part of the larger effort to encourage all healthcare providers to prioritize and address existing healthcare disparities. While the CY2023 measure is largely a data request, we anticipate subsequent years will include process and outcome measures for health equity which could have payment implications.  

Working toward and achieving health equity is no easy feat, but there are processes and technologies that can help move the CMS framework along the path more quickly and sustain it. We have found that the CMS framework for health equity and related data as well as the American Hospital Association (AHA) health equity roadmap are great resources to either begin or continue on your health equity journey with the CMS measures.