Data-Driven Strategy for New Payment Models. Objectives. Common Acronyms

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1 Data-Driven Strategy for New Payment Models Mark Sharp, CPA Partner Objectives Understand new payment model reforms and bundling arrangements Learn how these new payment models can impact your agencies Consider strategies that can help you succeed within the new payment models Common Acronyms ACO Accountable Care Organization APM Advanced Payment Models BPCI Bundled Payment for Care Improvement CJR Comprehensive Care for Joint Replacement CMMI Center for Medicare & Medicaid Innovation DRG Diagnosis Related Group FFS Fee for Service HHA Home Health Agency HHVBP Home Health Value Based Purchasing IRF Inpatient Rehabilitation Facility MSA Metropolitan Statistical Area PFS Physician Fee Schedule PGP Physician Group Practice SNF Skilled Nursing Facility 1

2 Future of Medicare Payments HHS goal of 30% of traditional FFS Medicare payments through Advanced Payment Models by the end of 2016 and 50% by the end of 2018 % Medicare Payments FFS APM CMMI Advanced Payment Models Accountable Care BPCI Primary Care Transition Medicaid and CHIP Acceleration Models Speed Adoption of Best Practices ACOs Model 1 Advanced Primary Care Initiative Reduce Avoidable Hospitalizations State Innovation Models Beneficiary Engagement Model Advanced Payment ACOs Model 2 Comprehensive Primary Care Initiative Financial Alignment Incentive for Medicare and Medicaid Frontier Community Health Integration Community Based Care Transitions ACO Investment Model Model 3 FQHC Advanced Primary Care Practice Strong Start for Mothers and Newborns Health Care Innovation Rounds Health Care Action and Learning Network Next Generation ACO Model 4 Graduate Nurse Education Medicaid Prevention of Chronic Diseases Health Plan Innovation Initiative Innovative Advisors Program Pioneer ACO CJR Transforming Clinical Practice Medicaid Emergency Psychiatric Demonstration Million Hearts Bundled Payment Popularity Bundled Payment Popularity Participants in CMMI Payment Models Source: CMMI Website 2

3 CJR Model Financial accountability for two of the most common DRGs: 469 & 470 Collaborative relationships and gainsharing with physicians and post-acute providers Target prices derived from historical claims data Episodes lasting 90 days postdischarge 2 Quality Measures + Voluntary PRO MSAs in CJR Model 67 MSAs CJR Financial Accountability Medicare shared savings program Bundled Payments Hospitals bear financial accountability All providers continue to be paid under current methodologies DRG Per diem Episodes Retrospective reconciliation against target prices 3

4 Financial Accountability in Bundles Bundled payments Inpatient vs post-acute payments Risk and variability is often highest in post-acute setting Pressure towards vertical integration Ownership vs partnership What s Next? From 67 MSAs to ALL MSAs From hips and knees to: Cardiac procedures COPD CHF AMI Pneumonia HHVBP Pilot Pilot for home health only Per CMS, pilot will Incentivize Medicare agencies to provide higher quality and more efficient care Test whether a payment incentive of up to 8% significantly improves provider performance Test the use of new quality measures in the home health setting Enhance the current public reporting process 12 // 2015 AHHC Home Health Intensive Conference 4

5 HHVBP Pilot States All Medicare-certified agencies in nine states HHVBP Pilot Overview Financial bonus pool funded by payment reductions to others Performance and outcome standards are established to determine which providers receive bonus payments Those that do not meet the standards are left with lower payment rates Those that out perform the standards receive financial rewards Current congressional consideration for nation-wide VBP for all post-acute providers HHVBP Performance Scoring Performance scores based on the following measures 9 outcomes measures 5 patient satisfaction measures 3 process measures Ranked within common sized cohorts Scores for achievement and/or improvement 5

6 HHVBP Pilot Years Starting in 2016 Baseline year of 2015 Performance Year Payment Adjustment Year Max Pay Adjust (up or down) % % % % % Payment adjustments made to the final Medicare claims paid during the payment adjustment year Success Today and Tomorrow 17 // 2015 AHHC Home Health Intensive Conference Success Today and Tomorrow Increase efficiency in providing care TRIPLE AIM Improve outcomes Improve the patient experience 18 // 2015 AHHC Home Health Intensive Conference 6

7 Success in APMs It s not a sprint it s a marathon Understand current state Develop a strategy Don t need to go it alone Data access and horsepower Leadership buy-in Challenge traditional thinking Success in APMs Identify and manage the high risk patients Ongoing patient monitoring Effective care transitions care and triage practices Excellent communication and coordination Define and communicate the value proposition Physician involvement can be key Strategic Management Model What s Going To Happen? What Should We Do About It? What Are The Implications? 7

8 Risk Stratification Road to APM Success Direction from Leadership Define and communicate the vision Develop culture of change Establish the behavior and performance expectations Ensure access to necessary resources Identify known barriers and manage resistance 1 Data Analytics Patients Physicians Post-Acute Providers 1 2 8

9 Patients in the Population Average CJR Episode Payments CJR Episode Outliers 9

10 Post-Acute Care Providers Longitudinal View Physician Analysis 10

11 Competitor Analysis A B C D E F G H I J A B C D E F G H I J COLLABORATORS, GAINSHARING AND QUALITY Collaborators, Gainsharing & Quality Physicians Skilled Nursing Home Health Development of Collaborators 11

12 Collaborators and Gainsharing Care Redesign Leverage data to perform a gap analysis and identify best practices Establish baseline: value stream mapping Coordinate with current orthopedic programs Present findings to Steering Committee Develop work groups and provide targeted training Prehab Acute Care Care Transitions/PAC IT Finance Discharge selection tool PAC Provider Scorecards Monitoring Progress Monthly progress reports Key metrics dashboard Data Custodian Target price calculation Reconciliation

13 Assessing Opportunities Assess Current State SWOT analysis Market Analysis Creating Value Proposition Financial Analysis Financially feasible? Business Plan The road map Creating a Value Proposition Market Analysis Discharges by DRG Post-acute utilization by DRG Value: Quality : Cost ratio DRG 470 averages $2,400 Home Health $10,000 SNF $15,000 IRF Benchmarking performance HHA competition SNF competition Creating a Value Proposition Preferred partners CJR and other bundles allow collaborators to recommend preferred providers Are you a preferred provider? How do I become a preferred provider? 13

14 Thank you Mark Sharp, CPA // Partner //

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