PAYMENT INNOVATION: Real Examples of Client Implementation. Craig Tolbert & Michael Wolford
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1 PAYMENT INNOVATION: Real Examples of Client Implementation Craig Tolbert & Michael Wolford 2
2 PINNACLE SPEAKER PROFILE CRAIG TOLBERT Principal DHG Healthcare Birmingham, AL
3 PINNACLE SPEAKER PROFILE MICHAEL WOLFORD Senior Manager DHG Healthcare Cleveland, OH
4 Learning Objectives & Key Takeaways LEARNING OBJECTIVES KEY TAKEAWAYS Understand the universe of payment innovation programs and payment models out there in both the governmental and commercial domains. Focused comprehension of key provisions of a minority of the universe of payment innovation models where the bulk of the action is today. Discovering real DHG Healthcare client examples of implementing successful responses to payment innovation programs and models. Payment innovation comes from all elements of the value chain Implementation of new payment model principles requires intimate understanding of success drivers DHG Healthcare has the experience and capability to help providers implement new payment model 5
5 Learning Objectives & Key Takeaways LEARNING OBJECTIVES KEY TAKEAWAYS Understand the universe of payment innovation programs and payment models out there in both the governmental and commercial domains, and the likelihood of further innovation. Focused comprehension of key provisions of a minority of the universe of payment innovation models where the bulk of the action is today. Discovering real DHG Healthcare client examples of implementing successful responses to payment innovation programs and models. Payment innovation comes from all elements of the value chain. Our approach to payment innovation fits hand-in-glove with our Risk Capability 2.0 perspective. Implementation of new payment model principles requires intimate understanding of success drivers. DHG Healthcare has the experience and capability to help providers implement new payment model. 6
6 Commonalities Between Toddler Toilet Training and Payment Models 3.5 Toilet Training and Disposable Diapers in the United States 160 Age of 60% Child Toilet Training Proliferation of Disposable Diapers Year 0 Age of 60% Population Trained Disposable Diaper Sales (est.) 7
7 Commonalities Between Toddler Toilet Training and Payment Models 3.5 Toilet Training and Disposable Diapers in the United States 160 Age of 60% Child Toilet Training Invention and mass-adoption of disposable diapers has resulted in later toilet training among toddlers in the United States Proliferation of Disposable Diapers Year 0 Age of 60% Population Trained Disposable Diaper Sales (est.) 8
8 Drawing the Connection DIAPERS Need: Cleanliness, Sanitation, Affordability Fix: Disposable Diaper Consequence: Delayed Toilet Training, Others 9
9 Drawing the Connection DIAPERS Need: Cleanliness, Sanitation, Affordability Fix: Disposable Diaper Consequence: Delayed Toilet Training, Others HEALTHCARE Need: Trim Healthcare Spending while Improving Quality Fix: Alternative Payment Models that Reward Both Needs Consequence:? 10
10 Different Model Variables Voluntary / Mandatory Demonstration / Codified Geographies: Select / All Financial Ramifications Impacted Providers and dozens more 11
11 HCPLAN: Categories of Payment Category 1: Fee for Service No Link to Quality & Value Category 2: Fee for Service Link to Quality & Value Category 3: APMs Built on Fee-for-Service Architecture Category 4: Population-Based Payment 12
12 HCPLAN: Categories of Payment, Payments by Category Legend % 43% 15% 28% 23% 29% Category 1: Fee for Service No Link to Quality & Value Category 2: Fee for Service Link to Quality & Value Category 3: APMs Built on Fee-for-Service Architecture Category 4: Population-Based Payment 13
13 HCPLAN: APM Principles Provider financial incentives alone don t generate meaningful change; patients must also be empowered Value-based incentives should ideally reach care teams who deliver care Payment models that do not take quality into account do not count as progress toward payment reform Incentives should be intense enough to motivate providers to invest in and adopt new approaches to care delivery 14
14 Pulling It All Together Categories Variables Principles Actual Models 15
15 Pulling It All Together Categories Variables Actual Models Principles Quality Value 16
16 Payment Models of All Shapes and Sizes ACO Investment Model Advance Payment ACO Model Comprehensive ESRD Care Model Medicare Health Care Quality Demonstration Next Generation ACO Model Medicare Shared Savings Models Nursing Home Value-Based Purchasing Demonstration Physician Group Practice Transition Demonstration Pioneer ACO Model Comprehensive Primary Care Plus (CPC+) FQHC Advanced Primary Care Practice Demonstration Frontier Extended Stay Clinic Demonstration Graduate Nurse Education Demonstration Independence at Home Demonstration Medicare Coordinated Care Demonstration Multi-Payer Advanced Primary Care Practice Transforming Clinical Practice Initiative Medicaid Emergency Psychiatric Demonstration Merit-Based Incentive Payment System (MIPS) Quality Performance Program (QPP) Medicare Intravenous Immune Globulin (IVIG) Demonstration Part D Enhanced Medication Therapy Management Model Pennsylvania Rural Health Model Physician-Focused Payment Models (PFPMs) Regional Budget Payment Concept Rural Community Hospital Demonstration State Innovation Models Initiative: Model Design Awards Rounds One and Two Private, For-Profit Demo Project for he Program of All-Inclusive Care for the Elderly (PACE) Vermont All-Payer ACO Model Acute Myocardial Infarction (AMI) Model BPCI Model 1: Retrospective Acute Care Hospital Stay Only BPCI Model 2: Retrospective Acute & Post-Acute Care Episode BPCI Model 3: Retrospective Post-Acute Care Only BPCI Model 4: Prospective Acute Care Hospital Stay Only Comprehensive Care for Joint Replacement Model Coronary Artery Bypass Graft (CABG) Model Medicare Acute Care Episode (ACE) Demonstration Medicare Hospital Gainsharing Demonstration Oncology Care Model Physician Hospital Collaboration Demonstration Surgical Hip and Femur Fracture Treatment (SHFFT) Model Advanced Primary Care Initiatives Comprehensive Primary Care Initiative Medicaid Incentives for the Prevention of Chronic Diseases Model Medicaid Innovation Accelerator Program Strong Start for Mothers and Newborns Initiative: Effort to Reduce Early Elective Deliveries Strong Start for Mothers and Newborns Initiative: Enhanced Prenatal Care Models Financial Alignment Initiative for Medicare-Medicaid Enrollees Initiative to Reduce Avoidable Hospitalizations Among Nursing Facility Residents, Phase Medicare-Medicaid Accountable Care Organization (ACO) Model Accountable Health Communities Model Cardiac Rehabilitation (CR) Incentive Payment Model Frontier Community Health Integration Project Demonstration Health Care Innovation Awards, Round Two Health Plan Innovation Initiatives Home Health Value-Based Purchasing Model Maryland All-Payer Model Medicare Advantage Value-Based Insurance Design Model Medicare Care Choices Model State Innovation Models Initiative: Model Test Awards Rounds One and Two Beneficiary Engagement and Incentives: Direct Decision Support (DDS) Model Beneficiary Engagement and Incentives: Shared Decision Making (SDM) Model Community-Based Care Transitions Program Medicare Diabetes Prevention Program (MDPP) Expanded Model Medicare Imaging Demonstration Million Hearts Million Hearts: Cardiovascular Disease Risk Reduction Model Partnership for Patients Value-Based Purchasing (VBP) Program Hospital Acquired Condition (HAC) Penalties Readmission Reduction Program (RRP) 17
17 Payment Models of All Shapes and Sizes ACO Investment Model Advance Payment ACO Model Comprehensive ESRD Care Model Medicare Health Care Quality Demonstration Next Generation ACO Model Medicare Shared Savings Models Nursing Home Value-Based Purchasing Demonstration Physician Group Practice Transition Demonstration Pioneer ACO Model Comprehensive Primary Care Plus (CPC+) FQHC Advanced Primary Care Practice Demonstration Frontier Extended Stay Clinic Demonstration Graduate Nurse Education Demonstration Independence at Home Demonstration Medicare Coordinated Care Demonstration Multi-Payer Advanced Primary Care Practice Transforming Clinical Practice Initiative Medicaid Emergency Psychiatric Demonstration Merit-Based Incentive Payment System (MIPS) Quality Performance Program (QPP) Medicare Intravenous Immune Globulin (IVIG) Demonstration Part D Enhanced Medication Therapy Management Model Pennsylvania Rural Health Model Physician-Focused Payment Models (PFPMs) Regional Budget Payment Concept Rural Community Hospital Demonstration State Innovation Models Initiative: Model Design Awards Rounds One and Two Private, For-Profit Demo Project for he Program of All-Inclusive Care for the Elderly (PACE) Vermont All-Payer ACO Model Acute Myocardial Infarction (AMI) Model BPCI Model 1: Retrospective Acute Care Hospital Stay Only BPCI Model 2: Retrospective Acute & Post-Acute Care Episode BPCI Model 3: Retrospective Post-Acute Care Only BPCI Model 4: Prospective Acute Care Hospital Stay Only Comprehensive Care for Joint Replacement Model Coronary Artery Bypass Graft (CABG) Model Medicare Acute Care Episode (ACE) Demonstration Medicare Hospital Gainsharing Demonstration Oncology Care Model Physician Hospital Collaboration Demonstration Surgical Hip and Femur Fracture Treatment (SHFFT) Model Advanced Primary Care Initiatives Comprehensive Primary Care Initiative Medicaid Incentives for the Prevention of Chronic Diseases Model Medicaid Innovation Accelerator Program Strong Start for Mothers and Newborns Initiative: Effort to Reduce Early Elective Deliveries Strong Start for Mothers and Newborns Initiative: Enhanced Prenatal Care Models Financial Alignment Initiative for Medicare-Medicaid Enrollees Initiative to Reduce Avoidable Hospitalizations Among Nursing Facility Residents, Phase 2 Medicare-Medicaid Accountable Care Organization (ACO) Model Accountable Health Communities Model Cardiac Rehabilitation (CR) Incentive Payment Model Frontier Community Health Integration Project Demonstration Health Care Innovation Awards, Round Two Health Plan Innovation Initiatives Home Health Value-Based Purchasing Model Maryland All-Payer Model Medicare Advantage Value-Based Insurance Design Model Medicare Care Choices Model State Innovation Models Initiative: Model Test Awards Rounds One and Two Beneficiary Engagement and Incentives: Direct Decision Support (DDS) Model Beneficiary Engagement and Incentives: Shared Decision Making (SDM) Model Community-Based Care Transitions Program Medicare Diabetes Prevention Program (MDPP) Expanded Model Medicare Imaging Demonstration Million Hearts Million Hearts: Cardiovascular Disease Risk Reduction Model Partnership for Patients Value-Based Purchasing (VBP) Program Hospital Acquired Condition (HAC) Penalties Readmission Reduction Program (RRP) 18
18 Payment Models of All Shapes and Sizes ACO Investment Model Advance Payment ACO Model Comprehensive ESRD Care Model Medicare Health Care Quality Demonstration Next Generation ACO Model Medicare Shared Savings Models Nursing Home Value-Based Purchasing Demonstration Physician Group Practice Transition Demonstration Pioneer ACO Model Private, For-Profit Demo Project for he Program of All-Inclusive Care for the Elderly (PACE) Vermont All-Payer ACO Model Acute Myocardial Infarction (AMI) Model BPCI Model 1: Retrospective Acute Care Hospital Stay Only BPCI Model 2: Retrospective Acute & Post-Acute Care Episode BPCI Model 3: Retrospective Post-Acute Care Only BPCI Model 4: Prospective Acute Care Hospital Stay Only Comprehensive Care for Joint Replacement Model Coronary Artery Bypass Graft (CABG) Model Medicare Acute Care Episode (ACE) Demonstration Medicare Hospital Gainsharing Demonstration Oncology Care Model Physician Hospital Collaboration Demonstration Comprehensive Primary Care Initiative Comprehensive Primary Care Plus (CPC+) FQHC Advanced Primary Care Practice Demonstration Frontier Extended Stay Clinic Demonstration Graduate Nurse Education Demonstration Independence at Home Demonstration Medicare Coordinated Care Demonstration Multi-Payer Advanced Primary Care Practice Transforming Clinical Practice Initiative Medicaid Emergency Psychiatric Demonstration Medicaid Incentives for the Prevention of Chronic Diseases Model Medicaid Innovation Accelerator Program Strong Start for Mothers and Newborns Initiative: Effort to Reduce Early Elective Deliveries Strong Start for Mothers and Newborns Initiative: Enhanced Prenatal Care Models Financial Alignment Initiative for Medicare-Medicaid Enrollees Initiative to Reduce Avoidable Hospitalizations Among Nursing Facility Residents, Phase 2 Medicare-Medicaid Accountable Care Organization (ACO) Model Accountable Health Communities Model Cardiac Rehabilitation (CR) Incentive Payment Model Frontier Community Health Integration Project Demonstration Health Care Innovation Awards, Round Two Health Plan Innovation Initiatives Home Health Value-Based Purchasing Model Medicare Care Choices Model Merit-Based Incentive Payment System (MIPS) Quality Performance Program (QPP) Medicare Intravenous Immune Globulin (IVIG) Demonstration Part D Enhanced Medication Therapy Management Model Pennsylvania Rural Health Model Physician-Focused Payment Models (PFPMs) Regional Budget Payment Concept Rural Community Hospital Demonstration State Innovation Models Initiative: Model Design Awards Rounds One and Two State Innovation Models Initiative: Model Test Awards Rounds One and Two Beneficiary Engagement and Incentives: Direct Decision Support (DDS) Model Beneficiary Engagement and Incentives: Shared Decision Making (SDM) Model Community-Based Care Transitions Program Medicare Diabetes Prevention Program (MDPP) Expanded Model Medicare Imaging Demonstration Million Hearts Million Hearts: Cardiovascular Disease Risk Reduction Model Partnership for Patients Value-Based Purchasing (VBP) Program Hospital Acquired Condition (HAC) Penalties Readmission Reduction Program (RRP) Surgical Hip and Femur Fracture Treatment (SHFFT) Model Advanced Primary Care Initiatives Maryland All-Payer Model Medicare Advantage Value-Based Insurance Design Model 19
19 Medicare Shared Savings Program (MSSP) FAST FACTS Introduced 2011, Started 2012 Participation Voluntary Participants 432 ACOs (CY2016) Beyond The Facts: Significant Primary Care engagement and affinity strategy not necessarily employment. Perfect program for providers to demonstrate risk capability with no actual downside risk. Provider Type(s) Physicians, Mostly PCPs Many providers hedge against downside risk; as a result, only 30% breakeven (CY2016) on the program. DHG Clients (approx.) ~10 End date (if appl.) N/A Est. $ Impact / year High We expect participation to boom in the next few years as physicians seek alternatives to MIPS. Physicians can only be in one (1) MSSP, so there is both offensive and defensive land grab in competitive markets 20
20 Bundled Payments for Care Improvement & Comprehensive Care for Joint Replacement Model FAST FACTS Beyond The Facts: Introduced BPCI 2011 / CJR 2015 Participation Participants Provider Type(s) DHG Clients (approx.) End date (if appl.) Est. $ Impact / year BPCI: Voluntary; CJR: Mand. & Vol. BPCI: 1,000+ CJR: 800 BPCI: All types CJR: Acute hospitals 100 BPCI: Sept CJR: Dec Low / Moderate Major strategies for success are mitigating unnecessary post-acute care utilization and avoiding readmissions. As a result of these bundling programs, significant savings has been generated from surgical episodes; medical episodes are flat nation-wide. Participation in both programs is limited; no new entrants expected. CJR Year 1 gains exceeded CMS initial expectations by 3.5x; shows that (a) there was legacy fat to trim and (b) incentives were material enough to manufacture change. 21
21 Merit-based Incentive Payment System (MIPS) FAST FACTS Introduced 2015 Participation Participants Provider Type(s) DHG Clients (approx.) End date (if appl.) Est. $ Impact / year Choose either MIPS or Advanced APMs >90% of physicians in Medicare Part B Physicians 10 n/a Moderate Beyond The Facts: Nearly all physicians will seek the MIPS track instead of the Advanced APM track in the near future because the neutral zone is wide in which providers don t earn gains or incur losses in MIPS. Physician Fee Schedule increases stop in 2020 when MIPS payment adjustment increases. By 2022, physicians Medicare Part B payments could adjust +/- 9% based on quality, efficiency, EHR use, and others. Clients with heavy Medicare FFS payer mix could see material compensation swing based on performance; others may choose to pursue Advanced APMs to avoid Part B fluctuation. 22
22 Value-Based Purchasing (VBP), Hospital Acquired Condition (HAC) Penalties, and Readmission Reduction Program (RRP) FAST FACTS Introduced Participation Mandatory Beyond The Facts: Shockingly, many executives don t fully understand (a) their own gain/loss history or (b) the performance metrics on which to improve. Participants Provider Type(s) DHG Clients (approx.) End date (if appl.) Est. $ Impact / year 3,000+ Hospitals Acute Care Hospitals Hundreds n/a High CMS saves nearly $1 billion annually from payment reductions derived from HAC and RRP; VBP is revenue-neutral. Similar type programs are being tested by commercial payers and by CMS for other provider types (Home Health, SNF) Every acute care hospital nationwide could perform better and improve Medicare reimbursement. Succeeding in these three programs is good for patients! 23
23 Client Example 1: Mary Washington Health Alliance Situation Clinically Integrated Network (CIN) looking for ways to implement risk capability Strong DHG Healthcare relationships re: audit, legacy CFOA, strategy, and EI Action PCP Strategy: Enrolled in MSSP Specialist Strategy: Enrolled in many voluntary bundles, 70% of Medicare FFS patients were bundled. Result Revenues: Bundles: +$9.6m MSSP: $0 ( ) Expenses: $3-4m Most savings derived from prevented readmissions: 3Q15: 29% 2Q17: 19% 24
24 Client Example 1: Mary Washington Health Alliance Bundles only 25
25 Client Example 2: Conway Medical Center (SC) Situation Significant opportunities in VBP, HAC, and RRP Siloed organization Outpaced by competitors Clinical ops and quality departments not working together Not using data to drive action Action 3-month engagement with DHG Focus on Triple-Aim Performance Excellence Overhauled nursing protocols Result Protected $1.7 million of future Medicare revenue Dramatic statistical improvements in: CAUTI-SIR CLABSI (became top decile) C. diff Clinical results improved VBP, HAC, and RRP scores; reduced Hospital LOS 26
26 Client Example 3: LifePoint Health Situation Strong legacy relationship between DHG Healthcare and LifePoint SVP for Population Health 18+ months of mutual discovery meetings Three (3) LifePoint Clinically Integrated Networks (and more in the works) that are not in the Medicare Shared Savings program Nashville investor-owned chatter about CHS big offensive & defensive play in MSSP effective 2018 Action Verbal commitment by LifePoint to engage DHG Healthcare Engagement focuses on establishing MSSP in two (2) new markets and transitioning three (3) existing CINs to MSSP risk Data, strategy, implementation, and full-blown hand-holding to establish these 5 MSSP entities throughout 2018 Result To be continued 27
27 Baloo 28
28 CRAIG TOLBERT PRINCIPAL BIRMINGHAM // AL // MICHAEL WOLFORD SENIOR MANAGER CLEVELAND // OH // 29
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