The Center for Medicare & Medicaid Innovations: Programs & Initiatives

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1 The Center for Medicare & Medicaid Innovations: Programs & Initiatives Rob Stone, Esq. American Health Lawyers Association Institute on Medicare & Medicaid Payment Issues March 30-April 1, 2012 CMMI Mission Statement Be a constructive and trustworthy partner in identifying, testing, and spreading new models of care and payment that continuously improve health and health care for all Americans. (Health Care Innovation Challenge Webinar, Nov 17, 2011) 1

2 Establishment & Overview of CMMI Statutory mandate & history CMMI Mission Initial appropriation CMS Authority to expand CMMI programs if it determines the model will either: Reduce Medicare/Medicaid spending without reducing beneficiary access or quality of care, or Improve quality of care, without increasing spending or reducing access to benefits Summary of Programs & Initiatives ACO Suite Primary Care Suite Bundled Payment Initiatives Care of the Dually Eligible Health Care Innovation Engaging the Marketplace 2

3 Themes & Observations Leveraging/accelerating reimbursement reforms included in the Accountable Care Act Quality metrics Cost containment Shifting accountability to providers for care management Prevention & bending the acuity curve Capturing and leveraging innovation outside of government Voluntary programs more carrot than stick Transparency and data sharing Category 1 - ACO Suite ACO Advanced Payment Program Types of Advanced Payments An upfront, fixed payment: Each ACO will receive a fixed payment. An upfront, variable payment: Each ACO will receive a payment based on the number of its historically-assigned beneficiaries. A monthly payment of varying amount depending on the size of the ACO: Each ACO will receive a monthly payment based on the number of its historicallyassigned beneficiaries. Eligibility ACOs that do not include any inpatient facilities AND have less than $50 million in total annual revenue, or ACOs in which the only inpatient facilities are critical access hospitals and/or Medicare low-volume rural hospitals AND have less than $80 million in total annual revenue. 3

4 Category 1 - ACO Suite Pioneer ACO Programs Announced by CMMI on May 17, 2011 Alternative to CMS shared savings/aco program for experienced, clinically-integrated health systems Essentially jump-starting the ACO program for systems that were already in position to execute the model Allows greater level of potential upside benefit in exchange for assuming greater downside risk and financial responsibility for beneficiaries Stronger financial incentives than CMS shared savings program Requires execution of contracts with non-medicare payers Higher targeted number of beneficiaries Category 1 - ACO Suite Advanced Development & Learning Sessions Series of 3 sessions (offered in June, September and November 2011) to executives from ACOs to learn about essential ACO functions and ways to build capacity needed to achieve better care, better health and lower costs through integrated care models 4

5 Category 2 Primary Care Partnership for Patients & Community-Based Care Transition Program Announced on April 12, 2011 Joint CMS CMMI initiative Total of $1 Billion investment projected savings of $50 Billion in Medicare savings over 10 years PfP bring together stakeholders to reduce preventable hospitalacquired conditions by 40% and readmissions by 20% between 2011 and 2013 CCTP creates source of funding for selected community organizations and hospitals that partner to assist patients moving safely between care settings Category 2 Primary Care Comprehensive Primary Care Initiative Announced on September 28, 2011 Involves partnering primary care practices with both public and private health care payer organizations to improve primary care Test whether a set of comprehensive primary care functions, coupled with payment reform, use of data, and HIT can achieve program goals Eligibility & Scope 5-7 markets only based on where a preponderance of payers apply, are selected and agree to participate (commercial, Medicaid, state employee plans, MA, etc.) Goal is approximately 75 practices per market 5

6 Category 2 Primary Care Comprehensive Primary Care Initiative Goals for participating practices: Manage care for patients with high health care needs Ensure access to care Deliver preventive care Engage patients and caregivers Coordinate care across the medical neighborhood Payment model Monthly care management fees for Medicare FFS beneficiaries Shared savings in Medicare FFS Additional support for serving Medicaid patients Category 3 - Bundled Payments for Care Improvement Initiative August 2011 CMMI issued Request for Applications Involve bundling of various services If providers can hold down costs and maintain quality, there is a shared savings component 4 models all voluntary programs 6

7 Category 3 - Bundled Payments for Care Improvement Initiative Option One Episode of care = acute inpatient hospital stay for all Medicare FFS beneficiaries, regardless of condition or severity Excludes physician services, but allows gainsharing from controlling Part costs Option Two Episode of care = both inpatient stay and post-acute care Standard FFS with retrospective payment reconciliation against predetermined price for the episode Agreed upon DRGs only Length of post-acute care included determined by applicant longer term allows for a lower discount Category 3 - Bundled Payments for Care Improvement Initiative Option Three Episode of care = Post-acute care only Applies to agreed upon DRGs only Includes all Part A and Part B services furnished during the period (including related readmissions) Option Four Episode of care = inpatient hospitalization only Applies to selected conditions only Includes both Part A and Part B services Similar to the Acute Care Episode Demonstration Project 7

8 Example of Contracting Relationships From the ACE Demo Physicians CMS PHO Hospital Vendors Flow of Payments - Bundled Payment from CMS (at Discounted Rate) Physicians CMS $14,400 PHO Hospital Vendors 8

9 Flow of Payments - Payment of Part B Portion from Hospital to PHO Physicians CMS PHO Hospital $2150 Vendors $12,250 Flow of Payments Payments of Part B Portion from PHO to Physician Physicians (Par or Non-Par) CMS $2150 PHO Hospital Vendors $12,250 9

10 Flow of Payments - Payment from Hospital to PHO to Vendors Physicians CMS PHO $450 Hospital Vendors $11,800 Flow of Payments - PIP Payments from Hospital to PHO to Physicians Physicians (Par Only) CMS $400 PHO Hospital Vendors $11,400 10

11 Flow of Payments - PIP Payments from Hospital to PHO to Physicians Physicians (Par Only) CMS PHO Hospital Vendors $11,400 $9800 $1600 Expenses Margin Flow of Payments Expense Comparison (example only) Non-Bundled Model $13,000 - Part A Payment ($10,600) General Expenses $2,400 - Margin ACE / Bundled Model $14,400 Bundled Payment ($2,150) Part B Payment ($450) Admin/Vendors ($400) PIP Payment ($9,800) General Expenses (reduced as a result of PIP) $1,600 Margin PLUS Payment to Patient PLUS CMS Savings 11

12 Category 4 Care of the Dually Eligible Financial Alignment Demos Two Models: Capitated State, CMS and a health plan enter 3-party contract, with plan receiving prospective, blended payment to provide comprehensive, coordinated care Managed FFS Model State and CMS enter agreement for State to receive a benefit from savings that result from initiatives to improve quality and reduce cost for Medicare and Medicaid Goals Category 4 Care of the Dually Eligible Financial Alignment Demos Eliminate duplication of services for these patients Expand access to needed care Improve the lives of dual eligibles Lower costs Other Initiatives: State Demos to Integrate Care 15 states selected to receive up to $1M each to develop models Demo to Improve Quality of Care for Nursing Facility Residents 12

13 Category 5 Health Care Innovations Health Care Innovations Challenge Up to $1 Billion in grants for ideas to deliver better health, improved care and lower costs to enrollees in Medicare, Medicaid and CHIP Recipients to be announced March 2012 Focus on those with the highest health care needs Support public and private organizations including clinicians, health systems, private and public payers, faith-based institutions, communitybased organizations and local governments Priority for approaches that can begin within six months and demonstrate sustainability post-award Range from approximately $1 million to $30 million for a three-year period Themes & Observations Leveraging/accelerating reimbursement reforms included in the Accountable Care Act Quality metrics Cost containment Shifting accountability to providers for care management Prevention & bending the acuity curve Capturing and leveraging innovation outside of government Voluntary programs more carrot than stick Transparency and data sharing 13

14 The Center for Medicare & Medicaid Innovations: Programs & Initiatives Rob Stone, Esq. American Health Lawyers Association Institute on Medicare & Medicaid Payment Issues March 30-April 1,

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