The Future Role of the Continuum of Care
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1 iftonlar 2013 Cl The Future Role of the Continuum of Care on Reimbursement cliftonlarsonallen.com South Carolina HFMA May 30, 2013
2 A Quick Quiz: Where are we today with reform? Moving forward fast! Moving forwardslowly! Stuck and that s a good thing! Moving backwards and that s even better! 2
3 The ACA Three Years Following Passage The U.S. Supreme Court has ruled; the 2012 Elections have been decided d the ACA is the law of the land New regulations, guidance, and FAQ documents from IRS, HHS, DOL continue to fill in the implementation picture 2014 is the year of expanding access to coverage Several CMS pilots, demos are well underway 3
4 Reform Summary Timeline Establishment of high risk insurance pools. Small business tax credits established for offering employee health insurance. Insurers can no longer deny coverage to children. New group & individual plans required to providepreventivepreventive services. CMS Innovation Center will test reforms for rewarding for quality vs. volume. Employers disclose health insurance benefits on W 2s. Physician compare website launched. Increased tax assessments on HSAs. Medicare value based purchasing for hospitals begins. Medicare shared savings program begins. CLASS Act: Nat l voluntary payroll withhold program to assist with staying at home Funding for community health increased by $11 billion over 5 years. Dependents covered until age 26. Annual review of premium increases effective. Donut hole rebates for $250 Part D prescription drugs. Market basket reductions for certain providers. Insurance admin simplification begins. Medical loss ratios become effective for small group & individual plans. Annual fees assessed on pharmaceutical companies. 10% bonus payment for PC s. Restructuring of MA begins, and phased in up to 7 years Reductions for hospital preventable readmissions. Productivity adjustments incorporated into market basket updates for certain providers. Independence at Home demonstration project. Start of Medicaid demo projects for bundled payments.
5 Reform Summary Timeline (cont d) Health insurers required to begin following admin simplification regulations. Limits placed on flexible spending accounts. Medicare national pilot for bundled payments begins. Beginning of Exchanges. Penalties imposed on individuals who fail to share responsibility for coverage. Insurance industry pays fees based on market share. Insurers prohibited from restricting i coverage and imposing max limits. Independent d payment advisory di board report required to Congress. Employer coverage mandates imposed. Medicare hospital DSH payments reduced. Rebasing of Home Health payments with 4 year phase in. Reductions for hospital acquired conditions (2015) Home Health productivity adjustments incorporated into annual updates (2015) Physician value based system implemented (2015) Medicaid increased payments for PC to 100% of Medicare fee schedule. Employer tax deduction for Part D subsidies eliminated. Pilot projects for value based purchasing in other care environments (2016). Excise tax imposed on Cadillac health plans (2018)
6 Don t forget Sequestration 6
7 So where are we really? Recent headlines The IRS Has Already Abused Its Power Under ObamaCare Cato.org (5/28/13) Obamacare Insurance Exchange Train is Already Coming Off the Rails Forbes (5/27/13) Obamacare is Facing Death hby a Thousand Cuts Washington Post (5/29/13) Unions Backing Away From Obamacare? Fox News (5/25/13) House Votes to Repeal Obamacare for 37 th Time Fox News (3/16/13) 7
8 One thing is true Change is happening regardless of the Health Care Reform outcome... Payment Reform is here now and is here to stay!! 8
9 Payment Reform Timeline 2010 Affordable Care Act passes and becomes law Insurance Market Reforms Phase I Patient Centered Outcomes Research Institute established Federal Coordinated Health Office established (Dual s office) 2011 CMS Innovation Center established Medicaid Health Homes launched State Balancing incentive Program (more HCBS options) Multi Payer Advanced Primary Care Practice Demonstration 2012 Accountable Care Organizations begin Health Care Innovation Grants awarded (through 2015) Hospital Valuebased Purchasing Program Hospital Readmission Reduction program Comprehensive Primary Care Initiative begins(through at least 2016) 2013 Financial Alignment Initiative Bundled Payment for Care Improvement demo 2014 Comprehensive Primary Care Initiative (first year of shared savings eligibility) First Independent Payment Advisory Board recommendations Medicaid expansion Individual Mandate Health Insurance Exchanges Additional Insurance market reforms II Employer pay or play penalty 9
10 10
11 So what have we learned so far? Market changes are driving health care reform 1. Change is occurring, but at different speeds and variations 2. Government spending limitations and changes in health insurance plans are driving movement to value vs. volume 3. Payment structures are moving to recognize value 4. Mergers and restructurings are occurring to manage costs and volume changes 5. New market entrants are helping redefine care and services 6. Timing i is everything! the ACA is a product of market changes and facilitates health care reform 11
12 The HealthCare Continuum
13 13
14 Continuum of Health Care Services Want Driven Need Driven Preventative Post-Acute Acute Senior Membership Geriatric Assessment Health & Wellness Centers Intentional Community Telehealth & Home Technologies Assisted Livingi Respite Care Board & Care Intermediate Care Palliative Care Outpatient Therapies Subacute Rehab Acute Hospitalization Community Based Services Wellness Programs Case/Disease Management Housing w/ Services Independent Day Care Living Personal Care Assistance Medical Social Dementia Assisted Living Home Health Skilled LTC Hospice Skilled Nursing Care Diagnostic & Treatment Center Long Term Acute Hospitalization Source: Adapted from previous Greystone and Lar presentations 14
15 Reformed Health System Service Delivery Home care SNF Assisted Living Hospital Physician office Group visits Self management RN, Care Coach Online/social networking (e.g. diabetes group) Telehealth monitoring Chronic Care Primary Care Acute Care Hospital SNF At Home Telehealth Wellness Health risk assessment Independent senior housing Adult day programs Community clinic for vaccines Local fitness center Smoking cessation program Weight loss program Personal wellness coach Senior Center Online social networking groups/tools Labs, diagnostics 15
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22 However many health system s are poorly positioned to deliver full episodes of care 22
23 Why arethey poorly positioned? I want to keep our post acute facilities; I know that in the future they ll be good for us. But I m afraid we ve just run out of time. CEO, Large East Coast Health System Healthcare is still a payment model that doesn t support population health. As you learn the potential new payment py models, it s important that you don t transition so early that your revenue stream goes away. CFO, North Carolina Community Hospital 23
24 Evolving Payment Methodologies
25 Array of Payment Alternatives
26
27 Medicare Accountable Care Organizations 27
28 Medicare ACO Programs Pioneer ACO Program (32 Pioneers); started 1/1/12 Eligible organizations had prior ACO like experience 15,000 Medicare beneficiaries minimum Must enter into outcomes based contracts with multiple payers. Model transitions to greater financial accountability(risk) faster. Medicare Shared Savings Program (MSSP) (221 ACOs) Program requires the participating providers to form an ACO 5,000 Medicare beneficiary minimum for participationp Two approaches: Savings only, Savings/Losses MSSP start dates: 4/1/2012, 7/1/2012, 1/1/2013 Advanced Payment Initiative (35) Must apply to be an MSSP ACO first Only smaller physician only practices OR rural health clinics or CAHs are eligible to participate Receive advance payment on their projected shared savings 28
29 Brown & Toland Physicians Healthcare Partners Medical Group Heritage California ACO Monarch Healthcare Primecare Mdi Medical Network Sharp Healthcare System Healthcare Partners of Nevada 2013 Medicare ACOs Allina Health Fairview Health Systems Park Nicollet Health Services Presbyterian Healthcare Services Plus Seton Health Alliance Bellin Thedacare Healthcare Partners Allina Health Trinity Pioneer ACO, LC OSF Healthcare System Dartmouth Hitchcock ACO Genesys PHO Michigan Pioneer ACO University of MI Montefiore ACO Beacon Health Renaissance Health Network Atrius Health Beth Israel Deaconess Physician Org Mt. Auburn Cambridge IPA Partners Healthcare Steward Health Care Systems Franciscan Alliance TriHealth, Inc. = Pioneer & MSSP ACOs = MSSP ACOs only As of March 2013 JSA Medical Group, a division of HealthCare Partners
30 Bundled Payments 30
31 Four Bundled Payment Models Model 1 Acute Care Hospital Stay Only Timeline (Retrospective): 3 participants representing January J July 2013: 32 organizations i No risk prep period July 2013: Model 2 Acute Care Hospital Stay + Post Risk Bearing Implementation Period Acute Care Episode (retrospective): 55 participants representing 192 organizations. Model 3 Post Acute Care Only (Retrospective): 14 participants representing 165 organizations Model 4 Acute Care Hospital Stay Only Model 4 Acute Care Hospital Stay Only (Prospective): 37 participants representing 75 organizations
32 The Post Acute Care Path and Impact on Bundle Avg Cost Readmit 30.0% STAH $3,327 SNF $12, % HHA $1,675 SNF 200 MD $1,928 All Other $843 TOTAL $20,381 NOReadmit 70.0% Average SNF/HHA Cost per Episode $15, Post Acute Care Path Avg Cost Readmit 21.0% STAH $1,895 SNF $ % Home Care HHA $ MD $1,531 All Other $897 TOTAL $9,313 NOReadmit 79.0% Acute Discharge 18.0% HHA $4,150 Stay CONFIDENTIAL: Subject to CMS Data Use Agreement #22626 Avg Cost Readmit 34.5% STAH $3,826 SNF $ % HHA $1, Community MD $1,450 All Other $522 TOTAL $8,293 NOReadmit 65.5%
33 Private Sector Payment Initiatives* * Source: Americas Health Insurance Plans (AHIP) accessed via web on 4/12/13 at: reform activity 33
34 Commercial Insurance Bundled Payment Initiatives Payor: Walmart Providers: Virginia Mason Medical Center, Seattle, Mayo Clinic, Scott & White Memorial Hospital, Temple, TX, Mercy Hospital, Springfield, MO, Cleveland Clinic, Cleveland, OH. Geisinger, Danville, PA Description: Beginning January 2013, 1.1 million employees eligible for consultation and care for certain cardiac & Spine procedures at no additional cost. Walmart will cover cost of travel, lodging, and food for patient and one caregiver. Payor: BCBS of South Carolina Provider: Providence Hospitals, Columbia, SC Description: Bundled payment contract for reimbursement of coronary artery bypass surgeries. Bundled payment will reimburse providers for related care within a 90 day span. Payor: BCBS of North Carolina Providers: Duke University Hospital, North Carolina Description: Bundled arrangements Specialty Hospital, CaroMont Health, Carolina include payment for pre operative Orthopedic and Sports Medicine Center, P.A., Gston tests and office visits for 30 days Anesthesia & Pain Magt Assoc. before knee replacement procedure, all inpatient care, and related outpatient care for 90 days after surgery. Source: The Advisory Board Commercial Bundled Payment Tracker accessed via web on 4/12/13 at: Care Advisory Board/Resources/2013/Commercial Bundled Payment Tracker#lightbox/0/ 34
35 CMS Centers for Medicare & Medicaid Innovation (CMMI): StateInnovation Models Initiative Provides up to $300 million to support the development and testing of statebased delivery system transformation models for multi payer payment and health care delivery system. Three types of awards: ModelTesting Awards: Six states received over $250 million to implement their State Health Care Innovation Plans. Model Pre Testing Awards: Three states received just over $4 million to continue developing State Health Care Innovation Plans which will be submitted to CMS within six months from date of award. Model Design Awards: 16 states received almost $32 million to be used to develop a State Health Care Innovation Plan, including application for an anticipated second round of Model Testing awards.
36 So what have we learned so far? Market changes are driving health care reform 1. Change is occurring, but at different speeds and variations 2. Government spending limitations and changes in health insurance plans are driving movement to value vs. volume 3. Payment structures are moving to recognize value 4. Mergers and restructurings are occurring to manage costs and volume changes 5. New market entrants are helping redefine care and services 6. Timing i is everything! the ACA is a product of market changes and facilitates health care reform 36
37 Challenges in Post Acute AcuteCare
38 38
39 39
40 Medpac s Current Positions Current PAC Shortcomings: Definitions and payments fail to establish incentives to deliver efficient high value care PAC is not well defined, the need is not always clear, and treatments are inconsistently applied Financial incentives under current fee for services drive up volumes and provision of ancillary services Paymentsilos are barrier to coordination of care and don t encourage safe transition s to a patients home 40
41 Medpac s BroadReform Recommendations Implement bundled payments and ACOs Bundled: cover all PAC services following a hospitalization ACO: Provider assumes some risk for defined population Implement a common patient assessment tool among all PAC providers Implement risk adjusted, outcomes based, quality measures Alignment of readmission policies across settings PAC and hospitals Hold both jointly responsible for care furnished in their settings 41
42 Medpac PAC 2014 Recommendations Skilled Nuring Inpatient Rehab Home Health LTACH's Hospice Idi Indicators of fpayment tadequacy Positive Generally Positive Generally Positive Positive Generally Positive Recent Medicare Margins > 10% in % in % in % in % in Recommendations Change therapy services should be PPS on a case-mix base Remove nonancillary service payments from base and pay base on casemix Add outlier payment to the new PPS rate No Update to Rates Rebasing the PPS payment Change the casemix system / Implementing a co-pay for certain episodes Focus on Fraud and Abuse Eliminate the Rate Update No Update to Rates 42
43 Strategies t for Senior Service Organizations
44 External Focus Vl Volume Suppliers Potential ti lpartners Hospitals & Systems ACOs Payors Bundlers Other Aging Services Orgs. Community Organizations Physicians Sole Practitioners External Market Forces, Other Providers Distinct Competitors Other Providers Emerging Services Family Caregivers Post Acute Provider Change Forces State & Federal Govt. Economies Baby Boomers
45 Defining Your Organization s Value Proposition: The Provider ofchoice Low/no hospital readmissions High Quality Topof of Class Meaningful Use of High patient satisfaction Electronic Health Robust continuous quality improvement Record Innovative care delivery approaches Past success Good community reputation partnering with other providers Demonstrated personcentered approach to care Cost of care is lowest in comparison to peers with comparable quality.
46 Seniorcare inthefuture future Senior care in the future will be tied less to locations and more to services. In effect, the providers that can continue to evolve beyond their real estate tt will likely l be best positioned in the future. Evolving community continuums will emphasize home and community based services to keep people health and independent at home. Organizations can approach continuum management through two generalapproaches: approaches: 1. Own a continuum through internal development of services 2. Partner a continuum through relationships with other, similar community oriented organizations
47 5 Hospital Regional Tertiary Center Rehab Hospital, Home Care, Home Health, Adult Care, Hospice 47
48 Carondelet Village Community Started with state innovation grant. A three year pilot to integrate care and community. 14 partners physicians, home care, health plans, health systems, home care, health researchers and community based providers. Serves clients on the campus and within five to seven mile radius. Requires a referral & enrollment. Annual report due to MN Legislature with evaluation and ability to replicate. Potential Metrics: Rehospitalizations Acute Care hospitalizations ti Medications
49 Nations First Virtual Care Center Mercy, headquartered in Chesterfield, MO announced plans for a $90 million center that will be linked to hospitals, clinics and even patients homes. Mercy serves: 3+ Million patients annually 30 hospitals 200+ outpatient facilities Mercy Virtual Care Center Missouri, Arkansas, Kansas, Oklahoma VCC intended to be home to a number of telehealth lh lhinitiatives i i i and link existing programs: Safewatch: ICU monitoring of 400 ICU beds in 10 hospitals over 4 state area Telestroke Program: Neurologists on call 24/7 via telemedicine from across the country Remote Disease Management: Patients connected via home based technologies to monitor weight, blood pressure, blood glucose, EKGs, and more. *Source: Mercy press release dated October 13, 2011 accessed via the web at media release pdf 4739.pdf
50 Parting Comments
51 Parting Comments Payment reform is and will continue to transition across the country Much of the transition feels like the old game with many talking value, but focused on price Payors will differentiate based on performance & costs (= Value) Mergers and acquisitions will continue to occur Integration will lower overall costs, but may increase costs for some providers New competitors will evolve as the market continues to be unsettled Big data (analytics) and predictive modeling is in its early stages of development Critical to future long term success!! Think big, but act small Go slow to go fast!
52 THANK YOU! Steve Stang, Health Care Partner For more information on health care reform, go to CliftonLarsonAllen s Health Care Reform Center at: Follow our blog for current discussions on health care.
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