MEDICARE COMPREHENSIVE CARE FOR JOINT REPLACEMENT MODEL (CCJR) Preparing for Risk-Based Outcomes of Bundled Care 8/12/2015.

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1 MEDICARE COMPREHENSIVE CARE FOR JOINT REPLACEMENT MODEL (CCJR) Preparing for Risk-Based Outcomes of Bundled Care August 13, 2015 Eric M. Rogers MEd RT(R) Managing Consultant Jeff Bond President Jeff Bond LLC 1

2 TO RECEIVE CPE CREDIT Participate in entire webinar Answer polls when they are provided If you are viewing this webinar in a group Complete group attendance form with Title & date of live webinar Your company name Your printed name, signature & address All group attendance sheets must be submitted to within 24 hours of live webinar Answer polls when they are provided If all eligibility requirements are met, each participant will be ed their CPE certificates within 15 business days of live webinar OBJECTIVES Recognize key provisions of proposed mandate Discuss how CCJR program will impact hospitals & their collaborating providers Identify the resources needed to successfully deliver against CMS target prices 2

3 42 CFR PART 510 [CMS-5516-P] 60-day public commenting period on proposed rule ending Sept 8 th Effective January 1, 2016 WHAT IS THE CCJR MODEL DESIGNED TO DO FOR PATIENTS & THE HEALTH SYSTEM? Better Care Smarter Spending Healthier People & Communities 3

PARTICIPANTS Inpatient Prospective Payment System (IPPS) Hospitals Located in selected Metropolitan Statistical Areas (MSAs) performing at least 400 LEJR cases in

4 PARTICIPANTS Inpatient Prospective Payment System (IPPS) Hospitals Located in selected Metropolitan Statistical Areas (MSAs) performing at least 400 LEJR cases in a one year period MSA SELECTION Selection strata based on two dimensions 1. Average historic episode payments (MSA wage adjusted) 2. Population size of MSA 75 MSAs 4

5 EPISODE DEFINITION: GENERAL Episodes are triggered by hospitalizations of eligible Medicare FFS beneficiaries discharged with diagnoses MS-DRG 469: Major joint replacement or reattachment of lower extremity with major complications or comorbidities MS-DRG 470: Major joint replacement or reattachment of lower extremity without major complications or comorbidities Episodes include Hospitalization & 90 days post-discharge All Part A & Part B services, with the exception of certain excluded services clinically unrelated to the episode EPISODE DEFINITION: BENEFICIARIES Enrolled in Medicare Part A & Part B throughout duration of the episode Not eligible for Medicare on basis of ESRD Not enrolled in a managed care plan Not covered under United Mine Workers of America health plan 5

6 EPISODE DEFINITION: SERVICES Included Physician services IP hospitalization (including readmissions) IP Psych Facility LTCH IRF SNF Home Health Hospital OP services Independent OP therapy Clinical lab DME Part B drugs Hospice Excluded Acute clinical conditions not arising from existing episoderelated chronic clinical conditions or complications of the LEJR surgery Chronic conditions that are generally not affected by LEJR procedure or post-surgical care PAYMENT & PRICING: RISK STRUCTURE Retrospective, two-sided risk model with hospitals bearing financial responsibility Providers & suppliers continue to be paid via Medicare FFS In Year 2, actual episode spending will be compared to episode target prices If in aggregate target prices are greater than spending, hospital may receive reconciliation payment If in aggregate target prices are less than spending, hospitals would be responsible for making a payment to Medicare 6

7 PAYMENT & PRICING: TARGET PRICE Target prices CMS intends to establish target prices for each participant hospital prior to start of each performance period Includes 2% discount to serve as Medicare s savings Based on blend of hospital-specific & regional episode data, transitioning to regional pricing Year Year Year 1 & 2 2/3 hospital 3 1/3 hospital 4 & 5 100% 1/3 regional 2/3 regional regional REGIONAL HISTORICAL AVG CCJR PAYMENTS DRG 469 DRG 470 $47,928 $52,028 $50,954 $46,189 $51,239 $50,328 $55,448 $47,925 $48,874 $24,858 $27,406 $25,480 $23,800 $25,989 $26,345 $27,464 $23,734 $23,425 New England Middle Atlantic East North Central West North Central South Atlantic East South Central West South Central Mountain Pacific 7

8 PAYMENT &PRICING: LINK TO QUALITY Minimum threshold for three quality metrics 1. Hospital Level Risk Standardized Complication Rate (RSCR) 2. Hospital Level 30 day, All Cause Risk Standardized Readmission Rate (RSRR) 3. HCAHPS Thresholds for performance would increase over lifetime of model to incentivize continuous improvement PAYMENT & PRICING: RISK LIMITS & ADJUSTMENTS Episode calculations capped at two standard deviations above regional mean Reconciliation payments capped at 20% of target prices (stop-gain) Hospital responsibility to repay Medicare phased-in & capped (stop-loss) Year 1: No responsibility to repay Medicare Year 2: Capped at 10% of target prices Years 3-5: Capped at 20% of target prices Additional protection for rural, Sole Community (SCH), Medicare Dependent (MDH) & Rural Referral Center (RRC) Hospitals 8

9 OVERLAP WITH BPCI & ACO Hospitals in BPCI Model 1 or Phase II of BPCI Models 2 or 4 for lower joint replacement would remain in BPCI & not be required to participate in CCJR Hospitals selected to participate in CCJR may also participate in an ACO or other model FINANCIAL ARRANGEMENTS: GAINSHARING Consistent with applicable law, participating hospitals might have certain financial arrangements with collaborators to support their efforts to improve quality & reduce costs Collaborators may include Physician & non-physician practitioners Home health agencies SNF LTCH Physician group practices IRF Inpatient & Outpatient PTs & OTs 9

10 FINANCIAL ARRANGEMENTS: INCENTIVE PAYMENTS Participant hospitals can share in Reconciliation payments in the form of a performancebased payments Internal cost savings realized through care redesign activities associated with CCJR services Collaborators would be required to engage with the hospital in its care redesign strategies & to furnish services during a CCJR episode in order to be eligible for such payments FINANCIAL ARRANGEMENTS: RISK SHARING Participant hospitals may assign various percentages of two-sided risk to collaborators CMS would continue to make reconciliation payments & recoupments solely with the hospital Hospital would be responsible for paying/recouping from its collaborators CMS proposed to limit hospital s sharing of risk to 50% of total repayment amount to CMS 10

11 BENEFICIARY INCENTIVES Hospitals might offer certain items or services to beneficiaries during a CCJR episode (consistent with applicable law) Be provided during a CCJR episode of care Be closely related to provision of high-quality care during episode Not be more valuable than necessary Not serve as an inducement FINANCIAL ARRANGEMENTS: WAIVERS Some financial arrangements may implicate the federal fraud & abuse laws; however, CMS may consider whether waivers are necessary to test the CCJR model Any waivers would be given separately by the OIG & CMS 11

12 PROGRAM WAIVERS Skilled Nursing Facility CCJR would waive the SNF three-day rule for coverage of a SNF stay following the anchor hospitalization beginning in Year 2 Patients must be transferred to SNFs rated three stars or higher Beneficiaries must not be discharged prematurely to SNFs Home Visits CCJR would waive incident to rule for physician services Allows licensed clinical staff of a physician to furnish a home visit in patient s home Permitted only for patients who do not qualify for Medicare coverage of home health services Maximum of nine visits using a new HCPCS code Telehealth Waives geographic site requirement & originating site requirement to permit visits originating in patient s home or place of residence Cannot be a substitute for in-person home health services Must be furnished in accordance with all other Medicare coverage & payment criteria DATA SHARING Specifications Data will be shared to evaluate practice patterns, redesign care delivery pathways & improve care coordination Hospitals can request to obtain beneficiary-level Part A & B claims for duration of the episode in summary format, raw claims line feeds or both Data would be available for hospital s baseline period & on a quarterly basis during performance period Aggregate regional claims data for MS-DRG 469 & 470 would also be shared Privacy Data sharing would fully comply with laws & regulations pertaining to security Patients would be notified & afforded the opportunity to decline having their data shared with a hospital 12

13 ACCESS TO CARE Patient s access to care would not be impacted by CCJR model Copays would not change Patient provider relationships would be maintained Patients retain entitlement to Medicare covered services OTHER ITEMS Beneficiary protection Providers & suppliers would be required to notify patients of payment model Monitoring CMS will monitor compliance with model requirements CMS will monitor potential risks Increasing profitability by delaying care Decreasing costs by avoiding medically indicated care Avoiding high-cost patients Compromised quality or outcomes 13

14 COMPREHENSIVE CARE FOR JOINT REPLACEMENT Key Takeaways January 2016 Design DRGs 469 & 470 Part A & B Target price for hospital Retrospective reconciliation Begins January 2016 Participants Hospitals paid under IPPS 75 MSAs selected 400 LEJR cases Few exclusions Definition Anchor stay & 90 days post discharge Part A & B Few exclusions Payment Retrospective bundle 2% discount Target price derived from a blend of hospital and regional spending data Repayment begins in Year 2 Quality Complication rate Readmission rate HCAHPS Increased performance with time Flexibilities Waiver for threeday inpatient stay for SNF Telehealth reimbursement Gainsharing Collaborative partners SUCCESS IN ADVANCED PAYMENT MODELS It s not a sprint- it s a marathon Recognize CCJR as an opportunity to prepare your organization for success in outcomes based reimbursement The CMS announcement on July 9 th has taken the mystery out of the question of when outcomes based reimbursement would be mandated Prior to July 9 th, many organizations recognized the need to prepare but it was voluntary. CCJR makes it clear CMS is serious about risk transfer to providers 14

15 PREPARING YOUR ORGANIZATION Establish Governance & Oversight First logical step required by CMS in BPCI Identify key leaders for participation Name system leader for outcomes based reimbursement Should also serve as Chair of the G&O Committee Formal meetings, keep minutes & prepare formal agendas Logical participants: C-Suite, Physician Leader/s, Clinic Administration, IT, Director of Managed Care Contracting LOGISTICS Advanced payment models require resources Utilize the G & O group to identify additional resources required Data horsepower critical centerpiece for success Determine your organization s ability to receive & utilize raw CMS claims data Make decision to partner with an external data partner or perform data analysis in-house Most hospitals have a great handle on hospital centered utilization but lack insight into post-acute provider cost & quality Physician leadership is critical 15

16 CRITICAL SUCCESS FACTORS Episode pricing & definitions Understand how episode prices are constructed & what is included in the episode Outliers Given broad episode definitions utilized by CMS the risk for episode reconciliation that exceeds the target price is definitely in play In BPCI, CMS utilizes Winsorization, in CCJR, risk is capped at two standard deviations above the mean It is critical to review your LEJR history & understand frequency of high cost cases Episode reconciliation expertise will be important to determine if correct claims were used in determining final settlement CRITICAL SUCCESS FACTORS Physician relationships are essential this was a critical finding of the ACE Demonstration & is consistent with the experience at CoxHealth in BPCI Involve physicians in early discussions their experience & involvement with care redesign is extremely important Utilize opportunity for implementing physician-led care redesign discussions into the gainshare model. Compensating physicians for avoided cost is a key success factor Communication via routine reporting is critical. Let physicians know how the program is running & seek their involvement on type of data provided Don t avoid gainsharing but be prepared to validate direct physician-patient involvement against any dollars distributed 16

17 LESSONS LEARNED 1. Secure buy-in from top levels of the organization 2. Work with others: Develop contacts outside your organization 3. Allocate resources 4. Use data to guide decision making 5. Physician compensation is critical 6. Be objective about your current structure: What changes do you need to make to succeed in a risk environment? QUESTIONS? 17

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18 CONTINUING PROFESSIONAL EDUCATION (CPE) CREDITS BKD, LLP is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: The information in BKD webinars is presented by BKD professionals, but applying specific information to your situation requires careful consideration of facts & circumstances. Consult your BKD advisor before acting on any matters covered in these webinars. CPE CREDIT CPE credit may be awarded upon verification of participant attendance For questions, concerns or comments regarding CPE credit, please the BKD Learning & Development Department at training@bkd.com 18

19 THANK YOU! FOR MORE INFORMATION Eric Rogers

HOSPITALS & HEALTH SYSTEMS: DATA-DRIVEN STRATEGY FOR BUNDLED PAYMENT SUCCESS 4/19/2016. April 20, 2016

HOSPITALS & HEALTH SYSTEMS: DATA-DRIVEN STRATEGY FOR BUNDLED PAYMENT SUCCESS April 20, 2016 Eddie Marmouget National Industry Partner emarmouget@bkd.com Eric Rogers Managing Consultant erogers@bkd.com