Strategies for Payment Reform in States: Selecting Innovative Models

Transcription

1 Strategies for Payment Reform in States: Selecting Innovative Models Tuesday, March 19, :00 pm 4:30 pm ET Supported by Kaiser Permanente Community Benefit 1 Agenda 3:00 3:10 pm 3:10 3:35 pm Welcome and Introductions Anne Gauthier, Senior Program Director, NASHP Laura Tollen, Senior Health Policy Consultant, Kaiser Permanente Institute for Health Policy State Levers and Options for Payment Reform Michael Bailit, President, Bailit Health Purchasing 3:35 4:05 pm 4:05 4:25 pm 4:25 4:30 pm Implementing Payment Reform: Two State Approaches William Golden, Medicaid Medical Director, Arkansas Jeanene Smith, Chief Medical Officer, Oregon Health Authority Discussion Facilitator: Anne Gauthier Wrap-up 2 1

2 Project Goal and Overview p Goal: Assist states ready to take immediate steps to improve delivery system integration via multi-payer payment and delivery system reforms p Four national webinars n Webinar #1 laid the groundwork, Webinars #2-4 focus on specific topics of interest p Virtual consultations with select states after each webinar p Online toolkit for state policymakers p Issue brief 3 Current Status of ACO Implementa3on in the U.S. Hawaii Note: the sum of the ACOs reflects the total number of unique, publicly iden3fiable, confirmed private- payer ACOs as of 08/2012 and public- payer ACOs as of 01/2013. Puerto Rico 2

3 Webinar #1: Laying the Groundwork p Range of policy levers available to states for pursing payment and delivery system reform n As purchaser: Medicaid payment reform, state employee benefit plan design n As traditional regulator: health insurance exchanges, insurance standards, transparency requirements n As convener: health reform task forces n As market setter/enabler: market power and antitrust, gain sharing and anti-kick back Themes from Follow-up Consultation Call p Participating states: North Carolina, Tennessee, Texas, West Virginia p Key Themes n Aligning quality measures across payers is a good first step for states pursuing multi-payer strategies n Deciding which providers to work with is a key step in payment reform initiatives providers are more likely to respond to new incentives when more revenue is on the line n Incentive payments can be applied to capitated payments under Medicaid managed care n States may take a hybrid approach to performance measurement, rewarding relative improvement and attainment of targets 3

4 Today s Webinar p Selecting innovative payment models in states n Strategies available to states n Examples of reform models and decisionmaking in Oregon and Arkansas p Potential topics for future webinars n Implementation issues, e.g. antitrust or provider consolidation issues n Infrastructure for initiatives, e.g. HIT, data informatics or public reporting State Levers and Options for Payment Reform Michael Bailit NASHP Webinar March 19,

5 Presentation Overview 1. Identify the range of payment reform models available to states. 2. Identify how to get started. 9 Payment Reform: One Slide on Why Fee-for-service (FFS) payment offers providers a specific amount of compensation in exchange for providing a patient with a specific service. If you reward a person or an organization for doing more (and for doing more of what is most costly to you and profitable to them), you will get more volume! v FFS payment is inherently inflationary. v FFS payment does not reward quality care or superior results. 10 5

6 Payment Reform: Moving Beyond FFS Payment Reform means moving away from FFS and towards other ways of paying for care that financially incentivize physicians to provide high quality, efficient care. Fee for Service (FFS) Pay-for- Performance (P4P) PCMH & Health Home Bundled Payment Total Cost of Care (TCOC) Goal: High Quality/ Low Cost Care 11 Medical & Health Home and High-Intensity Primary Care Multiple approaches in use nationally FFS payment for additional procedure codes Supplemental payment Primary care capitation Pay-for-performance Shared savings Early models focused on infrastructure development and support. Later models have sought more fundamental transformation of incentives. 12 6

7 Evolution of PCMH Payment While early payment models did not reward performance, a number of medical home pioneers anticipated the need and desirability of moving in this direction. AAFP/ACP/AAP/AOA Patient Centered Medical Home (PCMH) Joint Principles (2007) excerpt The payment structure should be based on the following framework: Allow physicians to share in savings from reduced hospitalizations associated with physician-guided care management in the office setting. Allow for additional payments for achieving measurable and continuous quality improvements. 13 Linking PCMH Performance and Payment Early payment models rewarded practice for medical homeness which may or may not have improved quality and saved money. Several stakeholders wanted this to change: Health plans and employers: wanted to pay for value, not infrastructure Primary care practices: wanted to get off the pay-for-volume treadmill Some models incorporated pay-for-performance, but many sought more fundamental payment change. 14 7

8 Linking Performance and Payment: PCMH Assumption of Performance Risk Two fundamental models: Shared Savings: provider can share in financial rewards for constraining spending to less than it would have been while assuring quality Primary Care Capitation: provider receives a fixed sum to provide PCMH services to a defined population of patients Shared Savings and Primary Care Capitation can be used together. 15 PCMH Shared Savings Model Description 1. Defines expected spending for the attributed population. 2. Assesses performance relative to projection or control group. 3. Distributes savings after consideration of quality performance relative to a predefined set of quality measures and criteria related to acceptable (and/or excellent performance) and/or improvement. 4. No savings distribution if quality level is unacceptable. 5. No penalty to practice if costs exceed budget: payer bears risk. 6. Challenge: large population required for cost measurement statistical certainty. 16 8

9 Case Study: PA Chronic Care Initiative Shared savings since 2009; current design since 2012 Each insurer calculates using common methodology Practices grouped to address small number problem Comparison of cost trend to book-of-business per business line (commercial, Medicaid, Medicare Adv.) Savings net of Per Member Per Month supplemental payments Risk-adjustment and high-cost outlier adjustment Adjustment for benefit carveouts Gate and Ladder approach to savings distribution if net savings achieved Maximum eligible savings increases annually over three years: 40%/45%/50% 17 Case Study: PA Chronic Care Initiative A Practice shall be awarded one point for achieving either of the following: attaining the NCQA HEDIS national 50 th percentile rate for commercial All Lines of Business, Medicaid HMO and Medicare Advantage/Medicare, the 50 th percentile calculated on a Practice-specific basis by calculating a weighted average, using attributed patient count data to account for patient mix (i.e., Medicaid vs. commercial vs. Medicare Advantage), or demonstrating a statistically significant improvement in the Practice rate compared to the prior measurement year. 18 9

10 Case Study: PA Chronic Care Initiative A Practice shall be awarded two points for attaining the NCQA HEDIS national 75 th percentile rate. A Practice shall be awarded three points for attaining the NCQA HEDIS national 90 th percentile rate. % of eligible points % of earned savings 25% 20% 35% 25% 45% 30% 55% 35% 65% 40% 19 Case Study: PA Chronic Care Initiative 1. PEDIATRICS Prevention 1a. Weight Assessment for Nutrition and Physical Activity for Children/ Adolescents (Year 1) 1b. Weight Assessment and Counseling for Nutrition and Physical Activity for Children/Adolescents (Years 2 and 3) 2. Childhood Immunization Status 3. Immunizations for Adolescents 4. Adolescent Well-Visit Management of Chronic Conditions 5. Use of Appropriate Medications for People With Asthma Clinical Care Management (to be risk-adjusted by payer) 6. All-cause 30-day readmission rate 7. ED Level 1 and Level 2 visit per 1000 (CPT Codes and 98282) 20 10

11 Primary Care Capitation Model Description 1. Determines cost of delivering PCMH services to a defined population. Typically takes historical costs and adjusts up to support historically nonreimbursed services. 2. Does not directly account for the costs of services delivered by other providers. 3. May, however, be accompanied by a pay for performance (P4P) program or a shared savings program. 21 Case study: Massachusetts Medicaid Primary Care Payment Reform (PCPR) Comprehensive Primary Care Payment Risk-adjusted capitated payment for primary care services Include three options for levels of behavioral health services Quality Incentive Payment Annual incentive for quality performance, based on primary care performance Shared Savings Payment Share in savings on non-primary care spend, including hospital and specialist services Options for shared risk terms too 22 11

12 Bundled Payment Bundled payments offer reimbursement for all of the services needed by specific patient for a particular condition or treatment. Primary goal: reduce costs by reducing cost variation, including through reduction in avoidable complications. Generally includes payments for all of the providers and the care settings that may be required for the treatment related to that specific procedure or illness, but does not include services that are unrelated. Example: hip replacement surgery bundle Include: the surgery, pre and post-operative appointments, rehabilitation and the treatment of any complications associated with the procedure. 23 Case Study: CMS Pilots CMS Acute Care Episode (ACE) Project at Baptist Health Implemented bundles of physician and hospital services related to 28 cardiac and nine orthopedic services. saved more than $2,000 per case saved a total of $4.3 million Medicare Heart Bypass Center Project Medicare offered participating hospitals a single price for all inpatient services related to heart bypass surgery. Over the first 27 months of the demonstration program, project saved more than $17 million at four participating hospitals. From , the total cost per case fell in three out of the four hospitals

13 Case Study: Arkansas Medicaid Phased implementation : providers began to submit data through web portal for quality metrics to : performance period began for 5 episodes next phases will introduce more episodes Spring 2013: will begin payments Pursued in coordination with BCBS of Arkansas and QualChoice Common bundle definitions and quality measures, but different payment terms 25 Case Study: Arkansas Medicaid Initial bundles: ADHD CHF (hospitalization only) Joint replacement (total hip and knee) Perinatal care URI Additional planned bundle: Developmental disabilities (all services for waiver and facility-based beneficiaries, including health home supplemental payments) 26 13

14 Case Study: Arkansas Medicaid Fee-for-service with retrospective reconciliation. Discussing whether there will be a withhold (payerspecific issue). Shared risk arrangement provider shares gain or loss with the state. From the beginning we said this was as much about quality as efficiency. If providers don t meet measures, can t get all earned savings. Quarterly reports to providers show performance against budget for closed episodes with breakdown by cost category. 27 Total Cost of Care (TCOC) Payment Sometimes called global payment, populationbased payment or capitation. Under TCOC payment a provider entity agrees to accept responsibility for the health care for a group of patients in exchange for a set amount of money. Goal: align the financial incentives of the providers with the interests of the patients and the payers so that everyone wins if patients are healthy and costs are held down

15 Two Types of TCOC Payment Arrangements Shared savings ( upside-only ): If the provider effectively manages cost and performs well on quality of care targets, then the provider may keep a portion of the savings generated. Shared risk ( two-sided ): Exactly the same as above on the upside. However, if the provider delivers inefficient, highcost care, it will be held responsible for a portion of the additional costs incurred. 29 Case Study: CalPERS In 2010, the California Public Employees Retirement System (CalPERS) launched a TCOC pilot program in collaboration with Blue Shield of California and Catholic Healthcare West & Hill Physicians Group (CHW/Hill). Blue Shield agreed to pay CHW/Hill a set amount to provide care to 41,500 CalPERS employees and dependents. Impressive results: by the end of the first year, the pilot had exceeded all expectations saving more than $20 million in costs (preventing a rate hike). over the first three years of the project, CalPERS has seen $32 million in aggregate savings. meaningful reduction in utilization 15% reduction in inpatient readmissions, 15% reduction in inpatient days, and 13% reduction in surgeries

16 Case Study: Minnesota Medicaid The Health Care Delivery Systems (HCDS) demonstration Statutory direction: The Minnesota Department of Human Services shall develop and authorize a demonstration project to test alternative and innovative health care delivery systems, including accountable care organizations that provide services to a specified patient population for an agreed-upon total cost of care or risk/gain sharing payment arrangement. 31 Case Study: Minnesota Medicaid First Demonstration Period: CY Six providers, serving nearly 100,000 Medicaid beneficiaries Five health systems (one pediatric) One network of 10 FQHCs State requirement: Accountable Care Organizations (ACOs) had to demonstrate how ACOs will partner with community organizations and social service agencies and integrate their services into care delivery

17 Case Study: Minnesota Medicaid Providers contract with DHS for both managed care and FFS enrollees under one of two models: Virtual HCDS: shared savings only Integrated HCDS: shared risk by Year 3 amount proposed by ACO Covered services Generally includes inpatient, outpatient, physician/ professional, certain mental health and chemical health services. Generally excludes dental, supplies, transportation, longterm services (but provider can propose to include). 33 Case Study: Minnesota Medicaid Second HCDS RFP was released January 2013 Expansion to additional populations (duals, complex) Strong emphasis on integration of acute care and other care settings and long-term services and supports (i.e., more global community responsibility) 34 17

18 Making Payment Reform Happen: My Advice 1. Take stock of your environment, what is currently happening, and what is most likely to succeed. Talk with key providers and (if applicable) health plans. Consider using the Catalyst for Payment Reform market assessment tool. 2. Balance a change imperative with an understanding of what is required for change to succeed. Providers may resist change due to fear of loss. Many Medicaid providers lack the clinical, managerial and financial to quickly transform. Take steps to help your providers transform and succeed. 35 Making Payment Reform Happen: My Advice 3. Use available data and benchmarks to inform model design and implementation. 5. Promote multi-payer strategies, as they rationalize market incentives for providers

19 STATE SPOTLIGHT: OREGON Jeanene Smith, MD, MPH Chief Medical Officer Oregon Health Authority Transforming Healthcare in Oregon : Coordinated Care Organizations March 2013 Jeanene Smith MD, MPH Chief Medical Officer Administrator, Office for Oregon Health Policy and Research 19

20 Oregon s New Coordinated Care Organizations Started in 2012 Smith Oregon s Commitments to CMS Cost and Quality Accountability Plan: Reduce the annual increase in the cost of care (the cost curve) by 2 percentage points Ensure that quality of care improves Ensure that popula3on health improves Establish a 1% withhold for 3mely and accurate repor3ng of data Establish a quality pool for the CCOs 20

21 State Test for Quality and Access Annual assessment of Oregon s statewide performance on 33 metrics, in 7 quality improvement focus areas: Improving behavioral and physical health coordina3on Improving perinatal and maternity care Reducing preventable re- hospitaliza3ons Ensuring appropriate care is delivered in appropriate serngs Improving primary care for all popula3ons Reducing preventable and unnecessarily costly u3liza3on by super users Addressing discrete health issues (such as asthma, diabetes, hypertension) Significant penal3es if goals not achieved Smith What s in a CCO Global Budget? Capitated component: include PMPMs of physical and mental health managed care and for the FFS enrollees moving into CCOs CCO optional services: include residential alcohol and drug treatment services, OHP dental coverage, and selected targeted case management programs that are offered in only one or a few counties CCO transformation incentive payments : outside of the capitated portion to provide: 1) infrastructure for metric reporting and delivery system transformation efforts in year 1 2) incentive for meeting both cost & health outcomes metrics (later years) 21

22 CCO Accountability- New Quality Pool Incen3ve payments 3ed to 17 metrics in seven areas cri3cal to reducing costs and improving quality: Integra3ng physical and behavioral health care Addressing chronic condi3ons Reducing preventable and costly u3liza3on Improving access to effec3ve and 3mely care Improving perinatal and maternity care Reducing preventable rehospitaliza3ons Spread of pa3ent- centered primary care homes for all popula3ons Two phases: Quality Incentive Pool: How it will work Phase 1: Distribu3on by mee3ng improvement or performance target Phase 2: Challenge pool (remainder) distributed based on 4 metrics: PCPCH enrollment Screening for depression and follow- up plan Use of SBIRT tool for substance abuse Op3mal diabetes care 22

23 Transformation is Underway: Medicaid CCO Timeline and Status CCO RFA and certification process started in March, 2012 CMS Waiver approved in July, 2012 A total of 15 CCOs as of November Some Fee- for- service transitioned to CCOs as well NOW 90 % of all Medicaid population in CCOs, and access to a CCO in each county in Oregon Smith Smith Coordinated Care Model Spreading Beyond Medicaid State Purchasing Power: Key elements included in State employees RFP out for 2015 plan year Multi- payer partnerships underway in Primary Care Home enhanced payment via CMMI/Medicare and private payers Oregon Transformation Center - aim to include CCOs and other private payers in learning collaboratives on alternative payment methodologies, integration, share innovations Exchange s Qualified Health Plans: development underway to potentially include similar elements, metrics, accountability 23

24 Questions? For more information: Smith STATE SPOTLIGHT: ARKANSAS William Golden, MD MACP Medical Director Arkansas Medicaid Enterprise 24

25 Arkansas Payment Improvement Initiative (APII): William Golden MD MACP Medical Director, Arkansas Medicaid UAMS Professor of Medicine and Public Health

26 51 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Patient-centered medical homes are a core component of this shift to paying for results and part of a broader statewide effort Enable and reward providers for Improving the health of the population Enhancing the patient experience of care Reducing or control the cost of care How care is delivered Medical homes + Health homes Episode-based care delivery Five aspects of broader program Results-based payment and reporting Health care workforce development Health information technology adoption Consumer engagement and personal responsibility Expanded coverage for health care services 52 26

27 Payers recognize the value of working together to improve our system, with close involvement from other stakeholders Coordinated multi-payer leadership Creates consistent incentives and standardized reporting rules and tools Enables change in practice patterns as program applies to many patients Generates enough scale to justify investments in new infrastructure and operational models Helps motivate patients to play a larger role in their health and health care 1 Center for Medicare and Medicaid Services 53 STRATEGY The populations that we serve require care falling into three domains Preliminary working draft; subject to change Prevention, screening, chronic care Patient populations within scope (examples) Healthy, at-risk Chronic, e.g., CHF COPD Diabetes Care/payment models Population-based: medical homes responsible for care coordination, rewarded for quality, utilization, and savings against total cost of care Acute and post-acute care Acute medical, e.g., AMI CHF Pneumonia Acute procedural, e.g., CABG Hip replacement Episode-based: retrospective risk sharing with one or more providers, rewarded for quality and savings relative to benchmark cost per episode Supportive care Developmental disabilities Long-term care Severe and persistent mental illness Combination of populationand episode-based models: health homes responsible for care coordination; episodebased payment for supportive care services 54 27

28 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Medicaid and private insurers believe paying for patient results, rather than just individual patient services, is the best option to control costs and improve quality Transition to system that financially rewards value and patient ü outcomes and encourages coordinated care û Reduce payment levels for all providers regardless of their quality of care or efficiency in managing costs û Pass growing costs on to consumers through higher premiums, deductibles and co-pays (private payers), or higher taxes (Medicaid) û Intensify payer intervention in clinical decisions to manage use of expensive services (e.g. through prior authorizations) based on prescriptive clinical guidelines û Eliminate coverage of expensive services, or eligibility 55 How episodes work for patients and providers (1/2) Patients and providers deliver care as today (performance period) Patients seek care and select providers as they do today Providers submit claims as they do today Payers reimburse for all services as they do today 56 28

29 How episodes work for patients and providers (2/2) Calculate incentive payments based on outcomes after close of 12 month performance period 4 5 Payers calculate average cost per episode for each 6 PAP 1 Review claims from the performance period to identify a Principal Accountable Provider (PAP) for each episode Compare average costs to predetermined commendable and acceptable levels 2 Based on results, providers will: Share savings: if average costs below commendable levels and quality targets are met Pay part of excess cost: if average costs are above acceptable level See no change in pay: if average costs are between commendable and acceptable levels 1 Outliers removed and adjusted for risk and hospital per diems 2 Appropriate cost and quality metrics based on latest and best clinical evidence, nationally recognized clinical guidelines and local considerations 57 PAPs that meet quality standards and have average costs below the commendable threshold will share in savings up to a limit Shared savings High Pay portion of excess - costs No change in payment to providers Shared costs No change Acceptable + Receive additional payment as share as savings Commendable Gain sharing limit Low Individual providers, in order from highest to lowest average cost 58 29

30 EPISODE-BASED COMPONENT Potential principal accountable providers across episodes Preliminary working draft; subject to change WORKING DRAFT Principal accountable provider(s) Hip/knee replacements Orthopedic surgeon Hospital Perinatal (non NICU) Ambulatory URI Acute/postacute CHF ADHD Primary physician (e.g., OB/GYN, family practice physician) (Hospital?) Provider for the in-person URI consultation(s) Hospital (Outpatient provider will be incented by medical home model to prevent readmissions) Could be the PCP, mental health professional, and/or the RSPMI provider organization, depending on the pathway of care Approaches under consideration for instances where multiple providers involved, e.g., Prenatal care and delivery carried out by different providers Patient sees multiple providers for URI Developmental disabilities Primary DD provider 1 Multiple approaches under consideration for instances when prenatal care and delivery carried out by different providers 60 30

31 Why primary care and PCMH? Most medical costs occur outside of the office of a primary care physician (PCP), but PCPs can guide many decisions that impact those broader costs, improving cost efficiency and care quality Ancillaries (e.g., outpatient imaging, labs) Specialists Patients & families PCP Community supports Hospitals, ERs PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Several developments in primary care payment aim to more appropriately compensate PCPs for playing this essential role Medicaid rate bump increase in primary care rates paid by Medicaid starting in April Coverage expansion decrease in uncompensated care with increase in coverage on exchanges Outside of PCMH Part of PCMH Gain-sharing significant upside only opportunity to share in savings from effectively patient panels total cost of care Support payments for PCMH per member per month (PMPM) payments to support investment in care coordination and practice transformation activities 62 31

32 Arkansas PCMH strategy centers on three core elements: PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Incentives Gain-sharing Payments tied to meeting quality metrics No downside risk Support for providers Monthly payments to support care coordination and practice transformation Pre-qualified vendors that providers can contract with for Care coordination support Practice transformation support Performance reports and information Clinical leadership Physician champions role model change Practice leaders (clinical and office) support and enable improvement 63 SUPPORT FOR PCMH ACTIVITIES PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Practices will receive monthly payments to support these activities Care coordination and general practice investment Practice transformation Payment amount Average of $4 per member per month (PMPM) Actual amount paid to be adjusted based on risk and complexity of patient panel A PCP with 2000 attributed patients could receive up to $120,000 a year in support $1 per member per month (PMPM) Flat amount per patient not risk adjusted Purpose and uses Fund on-going care coordination activities Fund PCP and staff time invested in new care model PCPs choose how to use funds (e.g., pre-qualified vendor, other external support, internal practice investment) Fund costs to transition practice model to PCMH PCPs only receive $1 PMPM payment if they contract with a prequalified vendor 64 32

33 More information on the Payment Improvement Initiative can be found at Further detail on the initiative, PAP and portal Printable flyers for bulletin boards, staff offices, etc. Specific details on all episodes Contact information for each payer s support staff All previous workgroup materials 66 33

34 Questions and Answers Questions for the presenters? Please type them into the chat box now! 67 Additional Resources p NASHP has launched an Integrated Delivery Systems Toolkit: p The toolkit is hosted on the State Refor(u)m website and offers: n Opportunities to ask questions and carry on the discussion after each webinar n Materials and recordings from each webinar n Themes that emerge from each post-webinar consultation call n Additional resources and documents relevant to each webinar s subject matter 34

35 Thank You! Please fill out your evaluations! Fostering Integrated Delivery Systems with Effective State Health Policy NASHP Project Team Please feel free to contact us with any questions! Anne Gauthier Senior Program Director Mike Stanek Policy Analyst For additional resources, visit statereforum.org and nashp.org/projects/ integrated-delivery-systems 69 35