Quality, Cost and Business Intelligence in Healthcare

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1 Quality, Cost and Business Intelligence in Healthcare Maitri Vaidya Population Health Executive DBA, MHA, CPHQ May 2016

4 Where are we going?

5 IHI Triple Aim Improve the patient experience of care Lower the per-capita cost of care Improve the health of populations

6 Comprehensive Joint Replacement (CJR) Bundled Payment A Holistic Approach

Financial and Population Impact #1 most common inpatient surgery for Medicare beneficiaries 2 400,000 procedures /yr $7 Billion per year People Over Age 65 (Millions) Private

7 Financial and Population Impact #1 most common inpatient surgery for Medicare beneficiaries 2 400,000 procedures /yr $7 Billion per year People Over Age 65 (Millions) Private payer reimbursement (procedure only): $32,000 3 Medicare reimbursement (surgery thru recovery): up to $33,000 Source: Administration on Aging, Department of Health & Human Services

Personal Impact Hospital stay ~2-5 days Unable to drive for 4-6 weeks 1 Recovery: 30-90+ days Post-op

8 Personal Impact Hospital stay ~2-5 days Unable to drive for 4-6 weeks 1 Recovery: days Post-op complications <5% Take antibiotics prior to dental procedures/cleanings for life Pain relief in 95% of individuals

9 Will I set off metal detectors? When can I go back to work? How long will my new hip last? Am I going to become addicted to pain medication? Can I still play ball with my grandkids? When is my next PT session?

10 How do we affect the quality of outcomes and the cost of care?

11 Organizational Coordination Organizations Incorporating Population Health Revenue Cycle Multiple Service Lines Clinical Devices Post-acute Focused On Continuum of care Programmable intelligence Analytics and reporting Leverage evidenced based care and model experience through the episode Personalized care (risk and delivery) Physician, nurse, facility and allied professional care teams PCMH Post-acute venues Financial efficiency Member/patient experience Personalized Through the complete episode Patient satisfaction Quality reporting Provider and care plan adherence Regulatory and payor

12 Regulatory Overview

13 News Release January 26,2015 CMS has set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 through programs such as the Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs. Sylvia Mathews Burwell Secretary of HHS

14 Comprehensive Care for Joint Replacement (CJR) New Bundled Payment Program Program Timing Two-Sided Risk Model Will impact reimbursement for MS- DRGs 469 and 470 Bundled payment for all services tied to lower extremity joint replacements / reattachments (e.g. knee replacement) Begins April 1, 2016 through December 31, 2020 Goal to keep episode cost below target cost Hospitals can share in the savings, or Hospitals may have to pay back overpayments based on target prices

15 Eligibility Short term acute care hospitals paid under the IPPS Hospitals in Maryland are excluded Hospitals participating in BPCI Models 1, 2, or 4 are excluded Hospitals are included based on their location in a Metropolitan Statistical Area (MSA) as defined by OMB at a county level This requires that the MSA have an urban core population of at least 50,000 List of affected MSAs and counties can be found here

Episode Definition Begins with admission to an eligible hospital for a LEJR MS-DRG 469 is major joint replacement or reattachment with MCC MS-DRG 470 is major joint replacement or reattachment

17 Episode Definition Begins with admission to an eligible hospital for a LEJR MS-DRG 469 is major joint replacement or reattachment with MCC MS-DRG 470 is major joint replacement or reattachment without MCC Includes most Medicare Part A or B 90 days post discharge A few exceptions are listed related to certain chronic conditions Exceptions are the same as for BPCI LEJR A list of exclusions by ICD- 9 (will be updated to ICD- 10) can be found here An episode will be excluded if: A patient is admitted to another hospital for MS- DRG 469 or 470 A patient dies during the hospitalization A patient initiates an LEJR episode under Models 1, 2, 3, 4

18 Beneficiary Notice Notice must contain Information/Education on CJR and services Retention of freedom of choice Explain patient access to records through portal or blue button Advise beneficiaries that protections remain in place and give them number Must be provided by: Hospitals need to provide notification on admission Physicians in a sharing agreement need to provide information on the CJR program when surgery decision is made EHRs may be used to retain documentation that notification was provided CMS will provide model notices, but these do not have to be used

19 Risk Limits (Stop-Loss/Stop- Gain) 10% 20 % 20 % 5% 5% TARGET PRICE TARGET PRICE TARGET PRICE TARGET PRICE TARGET PRICE 5% 10% 20 % 20 %

20 Risk Limits (Stop-Loss/Stop- Gain) Stop-Loss 0% -5% -10% -20% -20% SCH, MDHs, RRCs Stop- Loss 0% -3% -5% -5% -5% Stop-Gain 5% 5% 10% 20% 20% Stop-Loss = Risk Cap * (target price * # of MS-DRG episodes) Stop-Gain = Risk Cap * (target price * # of MS-DRG episodes)

21 Target Episode Prices Target prices will be created for each MS-DRG Target prices will be provided before each reporting period There will be 8 target prices 2016 and (16 for 2017 & 2018) Target price created for January through September and for October through December Regional and hospital specific episode prices are capped at 2 standard deviations over the mean

22 Application of Discount $20,000 pre-discount in ,000*.03=$600 Discounted Target Price $19,400 In 2017 and 2018, special repayment discount 20,000*.02=$400 Discounted repayment target - $19,600 $200 per episode safe zone between repayment and shared savings

23 Quality Composite Scoring 20 Total available points: 10 points 8 points 2 points THA/TKA Risk Standardized Complication Rate 30 days post discharge HCAHPS Voluntary Patient Reported Outcome (Voluntary) Quality Composite Score Quality Rating Adjustment Excellent 1.5% Reduction in Discount Good 1% Reduction in Discount Acceptable No Reduction in Discount Below Acceptable No Reduction in Discount; Cannot Share in Savings

24 Quality Scores Assigned Percentile THA/TKA RSCR HCAHPS 90 th 10 points 8 points 80 th and < 90 th 9.25 points 7.40 points 70 th and < 80 th 8.5 points 6.8 points 60 th and < 70 th 7.75 points 6.2 points 50 th and < 60 th 7 points 5.6 points 40 th and < 50 th 6.25 points 5 points 30 th and < 40 th 5.5 points 4.4 points < 30 th 0 points 0 points

25 Keeping Costs Down Cost Sharing Agreements Hospitals can enter into Cost Sharing Agreements to share the risk/rewards with community providers. Beneficiary Incentives Hospitals can provide incentives to patients to help advance the patient s clinical goals.

26 Cost Sharing Agreements Cannot be a loan or require referrals for business Hospital must retain responsibility for 50% of total cost No CJR Collaborator can take on more than 25% Hospital is responsible for enforcement of participants

Beneficiary Incentives Incentive must be closely tied to and advance a clinical goal Incentive cannot induce a beneficiary to choose a specific hospital or provider

27 Beneficiary Incentives Incentive must be closely tied to and advance a clinical goal Incentive cannot induce a beneficiary to choose a specific hospital or provider Incentives are $ capped at $1,000 The hospital must retain ownership of any incentive over $100 You still cannot pay for referrals Incentives must be in kind, not cash

28 CMS Enforcement Mechanisms A warning letter Forfeiture of reconciliation payments Termination from the program Corrective Action Plan (drafted by the hospital) Increase of 25% in recoupment payments

Waiver of Certain Medicare Requirements Waiver of incident to requirement Waiver of Telemedicine requirements Waiver of SNF 3 day inpatient stay requirement CMS does not allow in-home services unless

This waiver (CJR only) allows provision of in-home services given by the provider s care team for up to 9 times during episode.

29 Waiver of Certain Medicare Requirements Waiver of incident to requirement Waiver of Telemedicine requirements Waiver of SNF 3 day inpatient stay requirement CMS does not allow in-home services unless they are provided by home health or the provider. Telemedicine is allowed only for certain geographic areas and must be in a required originating site (i.e. doctor s office) CMS requires that patients must have an inpatient stay of at least 3 days to be eligible for a SNF. This waiver (CJR only) allows provision of in-home services given by the provider s care team for up to 9 times during episode. This waiver (CJR only) allows telemedicine services to be provided from the patient s home, regardless of geographic area. This waiver (CJR only) allows a patient to be transitioned to a SNF without a 3 day inpatient stay. The SNF must have at least 3 stars in CMS s quality rating system.

30 Managing a CJR Episode of Care

Stratified Engagement Modeling Risk-based deployment of care team resources across the continuum of care.

31 CJR Strategic Alignment Risk Mitigation Utilizing quality care & defined clinical protocols to proactively manage patient complications. Episode Identification Activating clinical, financial and operational tools to identify CJR patients. Stratified Engagement Modeling Risk-based deployment of care team resources across the continuum of care. Device Integration Actively monitoring biological data to proactively identify deviations and provide clinical intervention. Financial Manage ment cost Robust Clinical Integrati on Datadriven Intellige nce population Regulatory Compliance Patient-Centric Care Navigation Guiding data-driven patient choice, facilitating interaction and streamlining patient care planning. quality Overview

32 CJR Program Overview analytics CMS Req Medical Home Care Management Population Health Management Hospital Eligibility Beneficiary Eligibility Target Pricing Quality Measures QUALITY REPORTING CMS Req MS-DRGs Orthopaedic s Length of Stay STAR ratings CMS Req CMS Req CMS Req Predictive Modeling Preadmit Episode Targeting 3 days Admission Procedure Inpatient Transition 90 days Post-Acute Data Monitoring Performance Year Pricing Data-driven Process Improvement

33 What we do How we do it Why it is important

34 Reporting and Analytics Capabilities and Services Strategic Foundation An internal understanding for the use, sourcing and governance of data across the enterprise Needs Capabilities Data approach to risk stratification and personalized care plans Aggregated clinical dashboards Analytics and reporting being predictive and care plan compliance Dashboards or reports that support the potential for Collaboration Agreements EDW Interoperability Financial Optimize ROI Analytics and Reporting Define current state Establish critical KPIs Define future state (short, mid and long term) Define and manage to meet and exceed KPIs within defined timeframe Develop meaningful reports that are actionable towards care transformation Drive to Outcomes (Services) Services Population Health Executive alignment SME consulting for defined gaps through data Clinical Outcomes Reduced variance and improved patient care and safety through reduced variance Enterprise wide approach ensures continuity of care Financial High quality care being delivered in a cost effective fashion Reduced penalties through unnecessary readmissions Reduced cost through length of stay waivers

35 CJR Preadmission, Registration and Acute Stay Components Capabilities and Services Strategic Foundation Comprehensive market and client assessment and alignment Needs Capabilities Data approach to risk stratification and personalized care plans Member portals Electronic medical record (EMR) Aggregated clinical dashboards Analytics and reporting being predictive and care plan compliance Best practice based on procedures or conditions Patient activation EDW Interoperability Regulatory Beneficiary notification Proof of delivery and archived for audit Optimize ROI Analytics and Reporting Define current state Establish critical KPIs Define future state (short, mid and long term) Define and manage to meet and exceed KPIs within defined timeframe Solution coaching Drive to Outcomes (Services) Services Regulatory workshop Strategic assessment Program management Population Health Executive alignment Continuous Performance Improvement Workflow optimization Solution coaches Continuum alignment Value Added Services Beneficiary incentives Concierge services Clinical Outcomes Reduced variance and improved patient care and safety through reduced variance Enterprise wide approach ensures continuity of care Financial High quality care being delivered in a cost effective fashion Reduced penalties through unnecessary readmissions Reduced cost through length of stay waivers Meet regulatory requirements Member Experience Client/member satisfaction Member engagement Reduced hassle in navigating the health care system

36 Follow the Money

37 Revenue Cycle Claims are submitted no differently than with other Medicare Beneficiaries. Claims are aggregated and analyzed against all targets. May come under target for one and go over target for another -> net impact per episode of care. Annually around 2Q, CMS will pull in episode data and run through algorithms take out the outliers. After analyzing MS-DRGs and Hip Fracture status, CMS compares to target prices and makes decision on cost reconciliation. End of 2Q, send out risk/reward notification. Anchor hospital to manage with all providers contracted with Cost Sharing Agreements. Percentages on slide 26. Two Reconciliations for each contract year of CJR Program duration:

38 Fundamental Framework CMS / Payers Providers Providers CMS / Payers & Providers

39 IHI Triple Aim Improve the patient experience of care Lower the per-capita cost of care Improve the health of populations

40 The Future of Healthcare

41 Thank you! Maitri Vaidya

The Pain or the Gain?

The Pain or the Gain? Comprehensive Care Joint Replacement (CJR) Model DRG 469 (Major joint replacement with major complications) DRG 470 (Major joint without major complications or comorbidities) Actual