MCOs Revealed: Strategies for Building Strong Hospital & Referral Relationships

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1 MCOs Revealed: Strategies for Building Strong Hospital & Referral Relationships June 2014 avalerehealth.net Today s Panelists John Hackett - JHackett@extendicare.com o Vice President of Strategy & Development, Extendicare Health Services, Inc. Shawna Haering - SHaering@extendicare.com o National Director of Managed Care for Extendicare Health Services, Inc. Nancy Hoffmann Grant - ngrant@humana.com o Director of National Contracting, Humana Inc. Kim Tharp-Barrie, DNP, RN, SANE - Kim.Tharp-Barrie@nortonhealthcare.org o Vice President, Institute for Nursing for Norton Healthcare Holly Wittenberg HWittenberg@avalere.com o Director, Avalere Health 2 1

2 Distribution of Medicare Enrollment Likely To Shift Away from FFS PAYER MIX SHIFTS , AGGRESSIVE SCENARIO 100% (lives) = 45.5 M 52.0 M 60.3 M 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% E 2019E Duals Demos ACOs Traditional FFS Medicare Advantage Between 2009 And 2019, Proportion Of Beneficiaries Enrolled In Medicare Advantage is Expected To Grow By 30%+, While Those In FFS Will Begin To Move Into ACOs & Duals Demonstrations 3 Private and Public Payers Shifting Risk to Providers Health Reform Accelerates Movement to Risk-based Payments for Providers Payers (Government/Private) Accountable Care Organizations Rehospitalization Policies Bundled Payments Risk Risk Providers Risk To Manage Successfully Under This Paradigm, New Investments and Processes Must Be Developed and Care Must be Managed Proactively 4 2

3 Providers Can Help MA Plans Perform Better on Star Ratings MA Plans Measures on 5 Domains Staying Healthy: Screening, Tests, Vaccines Managing Chronic (Long Term) Conditions Member Experience with Health Plan Member Complaints, Problems Getting Services, and Improvement in the Health Plan's Performance Health Plan Customer Service Examples of Performance Measures Screening for breast cancer, colorectal cancer, cholesterol, and glaucoma Annual flu vaccine Checking to see if members are at a healthy weight Yearly review of all medications and supplements being taken* Controlling blood pressure Readmissions to a hospital within 30 days of being discharged Ease of getting needed care and seeing specialists Getting appointments and care quickly Overall rating of healthcare quality Complaints about the health plan Beneficiary access and performance problems Members choosing to leave the plan Plan making timely decisions about appeals Reviewing appeals decisions *Special needs plans only. Source: CMS. Medicare 2014 Part C & D Star Rating Technical Notes. October 21, Available at: 5 Medicare Hospital Measures/Programs Extend Post-Discharge Hospitals Increasingly Held Responsible for Quality and Cost of Post-Acute Care preinpatient stay Inpatient stay Clinical Process Post-inpatient period 30-day Mortality Patient Satisfaction Spending Per Beneficiary 30-day Readmissions Episode Specific Spending Per Beneficiary Voluntary Programs Bundled Payments (30,60 or 90 day episodes/48 bundles) Accountable Care Organizations (Full Year) Medicare s Focus is on Lowering Spending Per Beneficiary PAC: Post acute care ACO: Accountable Care Organizations 3

4 The Impact is Real: 734 of 831 Hospitals Penalized Impact of and HRRP on Hospitals Located in Medicare Regions 4 & 5 Better HRRP Performance HRRP/ Decrease in Payment >1% Decrease in Payment between 0-1% No Impact Increase in Payment between 0 and 1% Increase in Payment <1 % Totals No Penalty % Penalty % Penalty % % Penalty % Penalty Totals Better Performance Of 831 Hospitals, 734 Will Experience Some Negative Financial Impact Due to HRRP and/or HRRP: Medicare Hospital Readmission Reduction Program : Medicare Hospital Value Based Purchasing Program Source: CMS 2015 IPPS NPRM Impact File; Region 4 and 5 Hospitals only 7 PAC Variation in Spending Identified as an Opportunity Post Acute Care is 16% Percentage of Medicare FFS Spend and Highly Variable Post-Acute Care 16% Medicare FFS Spending %= $298 billion Hospital Outpatient 12% Physician 23% Inpatient Psychiatric 1% ASC 1% Inpatient Hospital 47% Dollar Per Member Per Month Regional Variation in Medicare Use $450 $60 $425 $225 $400 $250 Post-Acute Ambulatory Acute Inpatient In 2012 PAC represented 16% of Medicare FFS spending Source: MedPAC June 2013 Data Book: Health Care Spending and the Medicare Program (p. 3) and MedPAC. Regional Variation in Medicare Use. Report to the Congress. January Post Acute Care Includes Skilled Nursing Facilities, and Home Health Variation by geography and setting plus inefficient patient placement present cost saving opportunities 8 4

5 Medicare Targeting Episodes with High PAC Payments Six Hospital-Based Conditions Have Been Recommended for Inclusion in Program Episode Average $ per Episode Standard Deviation 25th Percentile 50th Percentile 75th Percentile # of Episodes Kidney/UTI $10,961 $7,421 $6,008 $7,492 $13, ,977 Knee Replacement/ Revision $20,780 $5,570 $16,755 $19,133 $23, ,907 GI Hemorrhage $10,837 $5,647 $7,769 $8,809 $11, ,646 Cellulitis $10,033 $6,325 $6,347 $7,513 $10, ,647 Hip Replacement/Revision $21,763 $7,232 $16,537 $19,721 $25, ,734 Spinal Fusion/Refusion $38,291 $10,592 $31,297 $34,517 $42,353 69,456 : Medicare Hospital Value Based Purchasing Program Source: CMS April 2014 Report: Criteria Used To Select Hospital-based Episodes Share of Medicare Payments Provider Influence on Outcomes Post-Acute Care Payments Variation in Medicare Payments Type of Treating Physician 9 Primary Goal is To Reduce Medicare Spending Strategic Opportunities for Providers to Effectively Manage Care Reducing Readmissions Substituting to Lower Cost Settings Improving Care Transitions At-Risk Providers Will Have To Focus On Reducing Medicare Spending And Increasing Care Efficiencies To Be Successful 10 5

6 Hospitals and Plans Are Looking for High Performing SNFs Plans Are Consistent In Evaluation Metrics Used To Assess Skilled Nursing Facilities. Length of Stay Hospital Admission Rates Hospital Readmission Rates Patient Satisfaction Employee Engagement Average Daily Census Nursing Home Compare Quality Measures Occupancy Rate 11 Selection Criteria: Volume, Readmissions, ALOS and Quality Case Study: Indiana University Health - Arnett Hospital (Lafayette, IN)** Top Overall, Readmissions and Quality Top in Volume Top ALOS Top Quality Rank by Measure SNF A (SNF) SNF B (SNF) SNF C (SNF) SNF D (SNF) Overall (Composite) Volume Readmissions 4^ 10 NR 6 Average Length of Stay Overall Quality* Using Avalere s PAC Scorecard, Hospitals Can Identify Top Performing Partners. For Example, Indiana UH Arnett Might Consider Sending More Volume to SNF A *Source: Nursing Home Compare ^Results are limited to those >11 Mulberry was highest performing of reported **Source: Medicare FFS Standard Analytic File ALOS: Average Length of Stay 12 6

7 Hospitals and SNFs Need Visibility Into MCOs PAC Strategies Only Through Dialogue and Relationships Can this Be Learned Initiatives To Improve SNF Networks Categorizing SNF clinical offerings Improving clinical relationships between primary care physician (PCP) groups and their preferred SNFs Managing SNF costs Substitution of Lower Cost Settings Exploring clinical relationships with HHAs Actively discharging to HHAs Discharging to SNFs as alternative to IRF, LTACH Criteria for Network Selection Strong performance and outcomes data Existing referral patterns from specific hospitals Existing clinical affiliations with in-network PCP group Unique capabilities (e.g., dementia care) 13 Tactical Options for Reducing PAC Spending PAC SPENDING LEVERS POTENTIAL TACTICS Reduced Readmissions Reduced SNF LOS Substitute Lower Cost Settings CARE TRANSITION SPECIALIST Care transitions programs Risk assessments PAC collaboration Collaborative discharge processes Greater physician presence in SNF Protocols and guidance for discharge to home with care Risk assessments New collaborations with new partners, e.g., ALFs, home health Reduce focus on acute LOS, increase focus on healthy return to community 14 7

8 Q&A Questions and Discussion 15 We look forward to partnering with you. For More Information Holly Wittenberg

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