CJR Final Rule: Policy Changes and Strategies for Bundled Payment Success
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- Gervase Stafford
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1 CJR Final Rule: Policy Changes and Strategies for Bundled Payment Success Melinda Hancock, Edward Stall, Craig Tolbert, Michael Wolford Friday, November 20,
2 Agenda 1) Overview of CJR Model 2) Policy Changes from Proposed to Final Rules 3) Insights from Big Data 4) Tools for Today / Strategies for Now 5) DHG Healthcare s A.I.M. Plan of Action 2
3 Major Policies in CJR that did not change Hospitals are singularly responsible for CJR risk. IPPS hospitals in CJR selected MSAs are mandated to participate. Non CJR hospitals may not opt-in. No downside in first performance year. Applies only to Medicare FFS beneficiaries. Bundle includes IP stay plus 90-days post-discharge. Bundles are retrospective, not prospective. BPCI still trumps CJR for risk delegation. Hospitals may share gains and/or losses with CJR collaborators. Target prices are re-based every other year. 3
4 Summary of major CJR changes ❶ CJR start delayed to 4/1/16; truncated first year ❷ Moving forward with 67 MSAs; 8 MSAs removed ❸ Quality performance calculations changed dramatically ❹ Hip fractures assigned a unique target price ❺ Stop-loss & stop-gain limits narrowed ❻ More clarification on requirements when sharing gains/losses with collaborators ❼ CMS actuaries expect greater savings in final rule ($343M vs. $250M) ❽ Availability of data to hospitals will be expanded 4
5 CJR start delayed to 4/1/16; truncated first year Start delayed 3 months to 4/1/16 Year 1 includes only 6 months of initiated episodes Model still ends in 2020 Today, CJR is collecting performance on: Years 1-3 of TKA/THA Complications Years 3-4 Baseline Pricing Year 1 HCAHPS Measure 5
6 Zoom-in on 2016 performance year Complications still being measured for PY1 through 3/31/16. Performance Year 1 looks like 9 months, but will only include approximately 6 months of cases. An episode must be initiated after 4/1/16, and the episode, including 90-day post-discharge period, must conclude on or before 12/31/16. Baseline has already been established. Download the full 5-year timeline document from Only 2 months of VPRO reporting HCAHPS still being measured for PY1 through 6/30/16. First Reconciliation Report in March First gainsharing distribution from CMS in 2Q
7 Moving forward with 67 MSAs; 8 MSAs removed 789 impacted CJR regional hospitals in 67 MSAs 67 of 789 (8%) CJR hospitals are already in BPCI for LEJR IPPS hospitals in the selected MSAs are required to participate in CJR. Census Region still determinant of regional pricing. Only exceptions are: BPCI Phase 2 LEJR hospitals Non-IPPS hospitals Maryland hospitals Pacific Mountain West South Central West North Central Removed MSA Mandated MSA East North Central East South Central Middle Atlantic South Atlantic New England 7
8 67 selected MSAs by average episode payments 8
9 Quality measures changed dramatically (1 of 3) Removed 30 th /40 th percentile thresholds on all 3 quality measures Replaced with Composite Quality Score Complications (RSCR) and HCAHPS measures (HMLR) remain 30-day readmission measure removed Voluntary data submission still present, though benefit is less direct sdfs THA/TKA Complications HCAHPS Survey 90 th th and < 90 th th and < 80 th th and < 70 th th and < 60 th th and < 50 th th and < 40 th < 30 th Decile Improve THA/TKA Voluntary PRO and limited risk variable data Yes 2.00 No
10 Quality measures changed dramatically (2 of 3) 1. Plot performance percentile for Complications. Example performance: 65 th %ile 2. Plot performance percentile for HCAHPS. Example performance: 25 th %ile 3. If improved 3 deciles from previous year on either measure, add improvement points. Example performance: complications improved from 32 nd to 65 th %ile. 4. If voluntary data submitted, add voluntary data submission points. Example performance: yes, submitted data 5. Sum the points. ❶ ❷ ❸ ❹ THA/TKA Complications HCAHPS Survey 90 th th and < 90 th th and < 80 th th and < 70 th ❶ th and < 60 th th and < 50 th th and < 40 th < 30 th 0.00 ❷ Decile Improve.? ❸ THA/TKA Voluntary PRO and limited risk variable data Yes ❹ 2.00 No
11 Quality measures changed dramatically (3 of 3) Composite Quality Score <4.00 Quality Category Below Acceptable Reconciliation Eligible? Quality Incentive Eligible? Gains (All Years) Effective Discount Percentage Losses (Year 1) Losses (Year 2-3) Losses (Year 4-5) No No N/A N/A 2.0% N/A 4.00 and < 6.00 Acceptable Yes No 3.0% N/A 2.0% 3.0% 6.00 and Good Yes Yes 2.0% N/A 1.0% 2.0% >13.20 Excellent Yes Yes 1.5% N/A 0.5% 1.5% Impact of 1% reduction in target price is $20k-$30k per year for a hospital performing 100 CJR procedures per year. 11
12 Hip fractures assigned a unique target price Partial hip replacements are still part of CJR, but will be given its own target prices by MS-DRG Hospital will have four concurrent target prices: MS-DRG 470 w/o fracture MS-DRG 470 w/ fracture MS-DRG 469 w/o fracture MS-DRG 469 w/ fracture Hip fracture is identified by ICD- 9-CM code as the principal diagnosis on the anchor hospitalization claim Statistics from Sample Hospital, Adjusted Spend per Episode % of total MS-DRG 470 episodes 90-day Readmission Rate MS-DRG 470 without hip fracture MS-DRG 470 with hip fracture $24,431 $41,361 88% 12% 9.1% 27.5% Hospital ALOS 3.1 days 6.0 days % discharged to SNF % discharged to Home Health 35.8% 84.6% 59.1% 7.8% 12
13 Stop-loss & stop-gain limits narrowed CJR will phase in stop-gain limits, rather than static 20% stop-gain limits in all 5 years. Less potential loss in Years 2 and 3. Rural hospital, SCH, MDH, RRC participant have the same stop-gain limits but different stop-loss limits: 2016: N/A, no downside 2017: -3% : -5% 13
14 Clarified gain/loss sharing requirements Provided a lot more clarity and specificity on PGP gainsharing PGPs must have distribution arrangement with members Gainsharing funds must not be placed in PGPs general funds Hospital must include quality measures in collaborator selection and distribution method CJR Collaborators must be listed on the hospital s website, updated quarterly Gainsharing arrangements must be entered into before care is furnished to CJR beneficiaries SNF LTCH Physician Group Practices Nonphysician practitioners HHA IRF Physicians Outpatient therapy providers 14
15 CJR is profitable for CMS, funded by IPPS hospitals $ Billion Total Episode Spending $343 Million Savings to Medicare 2.8% Overall CJR Savings to Medicare 15
16 Data availability expanded significantly Data will be made available no less frequently than on a quarterly basis with the goal of making these data available as frequently as on a monthly basis if practicable. Hospitals must request data one time, not recurring. Beneficiaries may not opt-out of sharing their data with the CJR hospital. Alcohol and drug abuse patient records will not be shared. Medicare CJR Data Hospital Claims-Level Hospital Summary Census Region Aggregate 16
17 Initial reactions Hospitals will still be pressed to put in place the processes and procedures necessary for the program [in spite of the 3-month delay.] Richard Pollack, president and CEO of American Hospital Association [The American Association of Orthopaedic Surgeons is] very concerned about serious unintended consequences for Medicare beneficiaries and physicians. David D. Teuscher, MD, President of American Association of Ortho. Surgeons ACOs are facing a plethora of financial challenges under the current CMS rules and this decision only adds to their burdens. Clif Gaus, CEO of National Association of ACOs 17
18 Big Data: Hip fracture policy change is significant Primary Procedure % of Episodes Average Episode Payment Total knee 58.3% $23,275 Total hip 29.9% $24,280 Partial hip 11.1% $39,272 Total ankle 0.4% $20,166 Admission Type % of Episodes Average Episode Payment Elective 83.1% $23,427 Emergency 9.9% $39,168 Urgent 6.3% $28,414 Trauma 0.3% $38,685 Other 0.4% $25,252 Hip fractures commonly: Result in partial hip replacement procedures. Are emergent or trauma admissions. These tend to be much more expensive episodes of care. Source: DHG Healthcare and Dobson DaVanzo & Associates research using CMS Public Use Files
19 Big Data: Readmissions require focused attention # of Readmissions in Episode % of episodes Average Episode Payment Incremental Spend % by # of Readmissions % $23,804 N/A 1 8.1% $37, % 2 1.4% $47, % 3 0.3% $51, % 4 or more 0.1% $53, % Source: DHG Healthcare and Dobson DaVanzo & Associates research using CMS Public Use Files
20 Big Data: A patient s care path after discharge matters a lot Pathway %of Episodes Episodic Spending Estimated Target Price Per Case Profit/(Loss) Acute HHA 28% $19,341 $25,000 $5,659 Acute SNF 19% $27,752 $25,000 ($2,752) Acute SNF HHA 14% $31,879 $25,000 ($6,879) Acute HHA Readmit. 13% $38,696 $25,000 ($13,696) Acute Readmit. 10% $26,626 $25,000 ($1,626) Acute SNF SNF HHA 6% $50,005 $25,000 ($25,005) Acute SNF HHA Readmit. 5% $48,506 $25,000 ($23,506) Acute HHA Readmit. HHA 5% $36,545 $25,000 ($11,545) Source: DHG Healthcare and Dobson DaVanzo & Associates research using CMS Public Use Files
21 Tools for Today: Episode Metrics TOTAL DRG 470 DRG 469 HOSPITAL XYZ MSA ABC Census Region All CCJR Hospitals CCJR National Percentile HOSPITAL XYZ MSA ABC Census Region All CCJR Hospitals KEY METRICS CCJR National Percentile HOSPITAL ABC All XYZ Census CCJR MSA Region Hospitals Adjusted Spend per Episode $29,275 $28,513 $26,753 $26, $28,554 $27,986 $25,635 $25, $45,500 $45,297 $47,472 $46, CV % 36.7% 36.4% 45.1% 44.6% % 34.0% 40.9% 40.1% % 41.9% 39.4% 41.6% 68 Episode Count 517 1,249 16, , ,211 15, , , Episodes with Readmission ,683 30, ,467 26, n n 216 3, % of Episodes w/ Readm. 10.8% 10.5% 10.0% 10.5% % 10.0% 9.2% 9.8% % 26.3% 25.1% 24.3% 32 Increm. Cost of Readmit 163% 167% 177% 173% % 166% 171% 166% % 135% 149% 154% 91 ALOS CCJR National Percentile 21
22 Tools for Today: Metric Trending TOTAL DRG 470 DRG KEY METRICS Adjusted Spend per Episode $ 28,338 $ 30,503 $ 29,183 $ 27,552 $ 29,683 $ 28,678 $ 45,978 $ 53,052 $ 38,413 CV % 37.7% 36.8% 34.9% 36.0% 32.7% 35.2% 26.3% 44.6% 19.1% Episode Count n n n Episodes with Readmission n n n n % of Episodes with a Readmission 8.5% 15.8% 8.1% 7.4% 15.2% 7.0% 33.3% 33.3% 28.6% Increm Cost of Readmit 175% 156% 157% 180% 153% 164% 98% 144% 99% ALOS % VOLUME BY DISCHARGE DESTINATION HHA 26.1% 26.3% 25.2% 26.7% 26.7% 26.6% 11.1% 16.7% 0% SNF 52.1% 59.1% 54.8% 51.5% 58.8% 53.9% 66.7% 66.7% 71.4% IRF 14.2% 10.5% 11.9% 14.4% 10.3% 11.7% 11.1% 16.7% 14.3% Home 7.6% 3.5% 7.4% 7.4% 3.6% 7.8% 11.1% 0.0% 0.0% LTCH 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Acute 0.0% 0.6% 0.7% 0.0% 0.6% 0.0% 0.0% 0.0% 14.3% Other IP 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Hospice 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Incorporating CY2014 data Splitting out hip fracture and nonhip fracture cases 22
23 Tools for Today: Quality Measures Quality Measure Your Score Percentile Quality Performance Points Quality Improvement Points Quality Composite Score Quality Category Eligible for Reconciliation Payment Eligible for Quality Incentive Payment Effective Discount Percentage for Reconciliation Payment Hospital-level RSCR following elective primary THA and/or TKA (NQF #1550) HCAHPS Survey measure THA/TKA voluntary PRO and limited risk variable data submission NO TOTAL Excellent Yes Yes 1.50% 23
24 Tools for Today: Provider Intelligence STAR Ratings First PAC Episode % of Ep. w/ Count Readm. ALOS First PAC Spend Total Episode Spend Quality Staffing Nursing Staff Health Insp. Overall Total SNF % 19.8 $9,375 $31,600 ALPHA SKILLED NURSING % 16.0 $7,819 $31, CITY SKILLED NURSING % 21.1 $10,100 $33, GOLDEN SKILLED NUR % 16.5 $7,622 $28, ALL OTHER (18) % 29.0 $14,461 $36,788 Identify the same information for Home Health (HHA), Inpatient Rehab (IRF), and Long-Term Acute Care Hospitals (LTACH) 24
25 Strategies for Now Develop gainsharing protocols for orthopedic surgeons Assess opportunity for internal cost savings (ICS) Focus heavily on post-acute Enhance episodic care management Prepare for ongoing data analysis throughout CJR implementation Identify quality performance and prepare for voluntary PRO reporting 25
26 A Plan of Action: A.I.M. Analyze the Data Implement the Model Manage Success CJR Fast Start Data Strategies Education Understand Precedence Analyze Official CJR Data from CMS (early 2016) Gainsharing Provider Networks Care Mapping and Coordination Risk Factor Mitigation Stakeholder CJR Education Quarterly / Monthly Claims Analysis Validate Gain/Loss Calculations Benchmarking and Best Practices Ongoing Advisory Support 26
27 Top 6 Things To Do Tomorrow: Its go time! Don t wait. Understand precedence and market involvement in BPCI; these may impact strategies. Collect relevant data to inform your plans. Understand orthopedic physician groups and focus on alignment with highquality practitioners. Coordinate post-acute network planning. CMMI contact information for 2 employees responsible for official CJR data: cjr@cms.hhs.gov. 27
28 Q&A & Primary CJR Team Craig Tolbert, Principal Birmingham, AL Edward Stall, Principal Greenville, SC Melinda Hancock, Partner Richmond, VA Michael Wolford, Manager Cleveland, OH
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