Provider Partnership Opportunities
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1 Provider Partnership Opportunities Thomas N. Bulleit Michael B. Lampert LLP
2 New Approaches, New Opportunities Transition from fee-for-service to value-based reimbursement May create hospital partnership opportunities The following slides summarize some Medicare value-based reimbursement programs Note that the future of value-based payment programs remains uncertain under new administration However, providers will likely continue to participate in these programs unless and until changes are made 2
3 Medicare Shared Savings Program (MSSP) Voluntary program that creates incentives for providers to enhance care coordination and quality Eligible providers, hospitals, and suppliers create or participate in an accountable care organization ( ACO ) Providers enter into participation agreement with ACO Providers collectively are accountable for quality, cost and all care of Medicare patients ACO enters into an agreement with CMS, agreeing to comply with requirements around quality and cost measures, care coordination, and patient-centeredness 3
4 Bundled Payments for Care Improvement (BPCI) Initiative Four broadly defined models of care that link payments for services patients receive during an episode of care Models 2 and 3 (most popular): Voluntary retrospective bundled payment arrangement where actual expenditures are reconciled against a target price for an episode of care Episodes of care may involve a variety of DRGs Provider or non-provider entity known as an awardee enters into a contract with CMS to participate in BPCI Awardee commits to care redesign in order to meet the CMS-designated target price for an episode of care 4
5 Bundled Payments for Care Improvement (BPCI) Initiative presents opportunity for nonprovider entities to act as an awardee and bear economic risk for episodes of care Can share in upside and downside risk with providers (n.b., the program refers to sharing in upside risk as gainsharing, using a broader definition than is normally used by OIG outside of BPCI and similar programs) OIG and CMS jointly issued waivers that allow awardees (including non-providers), hospitals, and physicians to gainshare and otherwise permissibly participate in BPCI under the fraud and abuse laws Waivers contain specific requirements that each party must meet in order to qualify under the waiver Thus, opportunities for device companies to partner with hospitals and physician groups to implement care redesign and cost-reduction measures 5
6 Comprehensive Care for Joint Replacement (CJR) Model Mandatory for hospitals in certain areas Tests bundled payment and quality measurement for episodes of care associated with hip and knee replacements CMMI seeks to evaluate the impact of bundled payment and care redesign across a broad spectrum of hospitals with varying levels of infrastructure and experience in entering into risk-based arrangements Given that goal, CJR holds participant hospitals financially responsible for CJR episodes of care CJR accomplishes this goal in part by limiting the types of organizations that can share financial risk/gainshare with participant hospitals 6
7 Comprehensive Care for Joint Replacement (CJR) Model Creates different partnership opportunities for non-providers May provide services and devices to participant hospitals Similar to BPCI, OIG and CMS jointly issued waivers for specific arrangements involving CJR participants Unlike BPCI, since non-providers do not directly participate in CJR, the waivers do not address medical device companies or similar entities 7
8 Proposed Episode Payment Models (EPMs) Like BPCI and CJR, EPMs would test bundled payment and quality measures for episodes of care Heart attack, bypass surgery, surgical hip/femur fracture treatment Like CJR, would be mandatory for certain hospitals Like BPCI and CJR, economics would be driven by comparison against target prices Unique feature of EPMs is that the target price would be quality-adjusted, so hospitals delivering higher quality care are eligible to receive the lowest discounted percentage on the target price (and thus to receive a higher amount in savings) 8
9 Proposed Episode Payment Models (EPMs) Like CJR, there would be limits on the types of organizations that can share financial risk/gainshare CMS and OIG are evaluating the need for, and scope of, fraud and abuse waivers in connection with the proposed EPMs Given the similarities to BPCI and CJR, most anticipate that CMS and OIG will issue fraud and abuse waivers 9
10 Proposed Cardiac Rehabilitation (CR) Incentive Payment Model Would test the impact of incentive payments to hospitals relating to heart attacks and bypass surgeries Two-part incentive payments would be based on use of cardiac rehabilitation services in the 90 days following discharge would be available to selected hospitals, some of which would participate in the cardiac EPM and some of which would not 10
11 Partnership Opportunities To revisit an earlier point, these CMS/CMMI models create partnership opportunities for medical device companies in terms of: Types of services a medical device company can provide to assist hospitals with care delivery system transformation Payment options a medical device company can offer to assist hospitals with the transformation in reimbursement 11
Furthering the agency s stated intention to pay for value over volume,
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