Community Based Care and More Legal Challenges in Evaluating and Implementing Alternative Value Based Models

Transcription

1 Presenting a live 90 minute webinar with interactive Q&A ACO Alternatives: Payment Bundling, Community Based Care and More Legal Challenges in Evaluating and Implementing Alternative Value Based Models TUESDAY, SEPTEMBER 20, pm Eastern 12pm Central 11am Mountain 10am Pacific Td Today s faculty features: Robert L. Roth, Partner, Hooper Lundy & Bookman, Washington, D.C. Lloyd A. Bookman, Founding Partner, Hooper Lundy & Bookman, Los Angeles Robert A. Minkin, Senior Vice President, The Camden Group, Los Angeles The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

2 Conference Materials If you have not printed the conference materials for this program, please complete the following steps: Click on the + sign next to Conference Materials in the middle of the left- hand column on your screen. Click on the tab labeled Handouts that appears, and there you will see a PDF of the slides for today's program. Double click on the PDF and a separate page will open. Print the slides by clicking on the printer icon.

3 Continuing Education Credits FOR LIVE EVENT ONLY For CLE purposes, please let us know how many people are listening at your location by completing each of the following steps: Close the notification box In the chat box, type (1) your company name and (2) the number of attendees at your location Click the SEND button beside the box

4 Tips for Optimal Quality Sound Quality If you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection. If the sound quality is not satisfactory and you are listening via your computer speakers, you may listen via the phone: dial and enter your PIN when prompted. Otherwise, please send us a chat or sound@straffordpub.com immediately so we can address the problem. If you dialed in and have any difficulties during the call, press *0 for assistance. Viewing Quality To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again.

5 ACO Alternatives CLE September 20, 2011 Webinar Slide Presentation Copyright This presentation as a whole and all of its individual parts are the exclusive property of The Camden Group.

6 GOALS FOR THIS PROGRAM Help providers understand why they should be focusing on Medicare reform initiatives beyond ACOs Explain the operational and legal aspects of several of the new initiatives coming out of the CMS Center for Medicare & Medicaid Innovation, including financial risk that program participants will have to bear Explain how these new initiatives are harbingers of a future that may mean the end of fee-for-service Medicare 9/11/2011 ι 6

7 WHY THIS PROGRAM? The Failure of the Proposed ACO Regulations The March Towards Health Care Reform in the Commercial Sector Delivery System Redesign is Inevitable Regardless of Government Missteps Integration is Occurring The Centers for Innovation s Bundling Models 9/11/2011 ι 7

8 PPACA Searching for Delivery System Reform PPACA contains much insurance reform Movements towards expanded coverage Revenue generation Expenditure reductions in Medicare and Medicaid Integrity expansion But, precious little heath care delivery system reform 9/11/2011 ι 8

9 Agenda Bundled Payment and Readmission Risk Medical Home Medicare Shared Savings Program Critical Success Factors

10 Healthcare Spending Growth (Amount in Billions) $5,000 CMS Projections for National Healthcare Spending CY % $4,500 $4,353 $4,000 $3,500 $3,000 $2,500 $2,000 National Health Expenditures (billions) National Health Expenditures as a Percent of Gross Domestic Product $2,379 $2,241 $2,113 $1,981 $1,855 $1,735 $2,510 $2, % 17.7% $2,770 $2, % 18.0% $3,313 $3, % 18.2% $3, % $4,062 $3, % 19.8% 20.3% 20.0% 19.0% 18.0% $1, % 17.0% $1, % 15.9% 15.9% 16.0% 16.2% 16.0% $500 $ % Source: Centers for Medicaid & Medicare Services - NHE Projections , Forecast Summary and Selected Tables 9/11/2011 ι 10

11 Looking Ahead if we could actually get our health-care system across the board to hit the efficiency levels of a Kaiser Permanente we actually would have solved our problems. -President Obama, /11/2011 ι 11

12 GOALS OF REFORM MODELS Bend the cost curve Improve Quality; narrow the network? Shift total government program risk to providers But, do not restrict t beneficiary i freedom of choice 9/11/2011 ι 12

13 Assumptions Can decrease cost and improve quality through greater integration and coordination among hospitals, physicians, and post-acute providers Evidence-based medicine works and is a key component Need quality reporting can design successful quality metrics which will lead to care improvements Alignment of economic incentives among providers will lead to more efficient and cost-effective care 9/11/2011 ι 13

14 Goals of CMS Bundling for Care Improvement Initiative Improve overall quality and Value Drive physician collaboration through Financial Incentives as a mechanism to improve efficiency and achieve sustainable results Reduce or stabilize growing costs to Medicare for acute care services by maximizing the use of available capacity in high quality providers 9/11/2011 ι 14

15 Bundling Concepts Basic idea is predetermined payment for a defined bundle of services What services are in the bundle? What is the episode of care? What conditions are subject to the bundled payments? Retrospective vs. Prospective Bundled Payment Retrospective providers are paid under the Medicare feefor-service systems with a reconciliation to the bundled amount Prospective the the awardee is paid a bundled payment amount, standard Medicare FFS payments are not made, and the awardee is responsible for paying the other providers 9/11/2011 ι 15

16 The Basics CMMI Has Recently (August 23, 2011) Proposed Four Separate Bundled Payment Models For Study Go To: of focus/patient care-models/bundled-payments-for-care-improvement.html All Four Models Will Include An Assumption of Financial Liability By The Awardee for Medicare Payments That Exceed Historical Trends No Caps, No risk corridors (unlike proposed ACO regulations) All Four Models Permit Approved Gainsharing Apply only to Medicare Part A and Part B services Beneficiaries Must Be Notified of Participation and Will Continue to Have Freedom To Choose Their Providers 9/11/2011 ι 16

17 The Basics Awardees may be acute care hospitals, physician group practices, health systems, physician-hospital organizations, post-acute providers, and conveners of participating health care providers Applicants are encouraged to participate in other Medicare payment initiatives as well, including the Medicare Shared Savings Program, Pioneer ACOs, and other medical home and shared savings initiatives 9/11/2011 ι 17

18 The Basics Bundled Payment Agreements Will Last For 3 Years (with Potential 2 Year Extensions) First Program Could Start As Early as 1Q 2012 (Model 1 Awardees) LOI and Application Due Dates: Model 1 LOI Due October 6, 2011; Application Due November 18, 2011 Models 2-4 LOI Due November 4, 2011; Application Due March 15, 2012 LOIs are non-binding Models 2-4 Must Also Submit a Research Request Packet Along With Their LOI To Receive Data From CMS Applicants Late Submitting Their LOI Will Not Be Considered 9/11/2011 ι 18

19 The Basics Applications will be scored, process will be selective Applicants must demonstrate ability to bear risk of loss These programs generally include patients who are eligible for fee-for-service ( FFS ) Medicare on the basis of age or disability (ESRD beneficiaries and Medicare Advantage enrollees are excluded) Medicare must be the primary payer Unclear about how coordination with secondary payers and bad debts will work Applicants can request some of a portion of a Deductible waiver 9/11/2011 ι 19

20 Model 1- Retrospective Acute Care Hospital Stay Only Applies to Noted Medicare FFS Beneficiaries Admitted to Awardee Regardless of Assigned MS-DRG Episode Includes All Part A Services Furnished To Beneficiaries Includes Hospital Diagnostic Testing and Related Therapeutic Services Furnished by an Entity Wholly-Owned or Operated by the Hospital Three (3) Days Before Admission Episode Ends On Hospital Discharge 9/11/2011 ι 20

21 Model 1- Retrospective Acute Care Hospital Stay Only Awardees To Offer CMS A Discount On Usual Part A Inpatient Payments Discount to be Calculated to Include All Payment Adjustors and Applicable Outlier Payments (Except DSH, Capital, IME) Medicare makes normal FFS payments less discount on hospital Part A payments Minimum Discounts: 0% or Higher For First 6 Months of Year 1.5% or Higher For Second 6 Months of Year 1 1% or Higher for Year 2 2% or Higher for Year 3 9/11/2011 ι 21

22 Model 1- Retrospective Acute Care Hospital Stay Only There Is No Episode Reconciliation on Part A Payments Episode Monitoring: Awardee Required To Pay Medicare For Amount Of Part A and Part B Payments For Inpatient Stay In Excess of Trended Historical Aggregate Beyond Risk Threshold Post-Episode Monitoring: i Monitoring Period = 30 days post hospital discharge Awardee Required To Pay Medicare Amount of Part A and Part B Payments During Monitoring Period In Excess Of Trended Historical Aggregate Risk Threshold 9/11/2011 ι 22

23 Model 2- Retrospective Acute Care Hospital Stay Plus Post-Acute Care Extends Episode of Care To Include Post-Acute t Care Uses Typical FFS Payment With Retrospective Reconciliation Applies to Proposed/Accepted p MS-DRG s Episode Begins with Admission and Continues Through a Minimum of 30 days Following Discharge Quality Measures To Be Proposed (But Standard Set Will Ultimately Be Required) 9/11/2011 ι 23

24 Model 2- Retrospective Acute Care Hospital Stay Plus Post-Acute Care Episode Includes: All Part A and Part B Services Furnished During Stay All Part A and Part B Services In Post-Discharge Period Related To Episode Anchor All Hospital Diagnostic Testing and Related Therapeutic Services Furnished By an Entity Wholly-Owned or Operated By the Hospital Three (3) Days Before Admission All Part A Services For Related Readmissions All Part B Services Furnished During the Post-Discharge Period during Related and Unrelated Readmissions 9/11/2011 ι 24

25 Model 2- Retrospective Acute Care Hospital Stay Plus Post-Acute Care Applicant proposes a Target Price May be risk adjusted Post-episode reconciliation between Target Price and Part A and Part B expenditures Awardee pays Medicare if expenditures exceed Target Price Awardee receives additional payments if expenditures are less than Target Price 9/11/2011 ι 25

26 Model 2- Retrospective Acute Care Hospital Stay Plus Post-Acute Care Two Options: Option 1: Minimum Day Post-Discharge Period Minimum 3% Discount (for Part A and Part B) Option 2: Minimum 90+ day Post-Discharge Period Minimum 2% discount (for Part A and Part B) 9/11/2011 ι 26

27 Model 2- Retrospective Acute Care Hospital Stay Plus Post-Acute Care Post-Episode Monitoring Monitoring Period = 30 Days Post Episode If Part A and Part B Payments For Services During Monitoring Period For Included Beneficiaries Exceed The Trended Historical Aggregate Risk Threshold, Awardee Pays Medicare The Difference 9/11/2011 ι 27

28 Model 3- Post-Acute Care Only Episode Begins with Initiation of Post Acute Care at Awardee (or Participating) SNF, IRF, HHA, or LTCH Within 30 Days of Discharge from Acute-Care Hospital For Agreed Upon MS-DRG Episode Lasts a Minimum of 30 Days Episode Includes: All Related Part A and Part B Services Furnished During Episode Period (Including Related Readmissions) All Part A Services for Related Readmissions Furnished During Episode Period All Related Or Unrelated Part B services Furnished During Episode Period 9/11/2011 ι 28

29 Model 3- Post-Acute Care Only Applicant proposes Target Price Traditional FFS Payment Reconciled Against Agreed-Upon Target Price Episode Reconciliation: If Aggregate FFS Payments Less Than Target Price, Awardee Paid Difference If Aggregate FFS Payments More Than Target Price, Awardee Pays Medicare Difference 9/11/2011 ι 29

30 Model 3- Post-Acute Care Only Post-Episode Monitoring Monitoring Period = 30 Days After End of Episode If Part A and Part B Paid For Included Beneficiaries Exceeds The Trended Historical Aggregate Payment Beyond Risk Threshold, Awardee Pays Medicare Difference Quality Measures To Be Proposed (But Standard Set Will Ultimately Be Required) 9/11/2011 ι 30

31 Model 4- Prospective Acute Care Hospital Stay Only Episode Begins with Acute Inpatient Admission and Continues Through Discharge For Agreed/Accepted MS-DRGs Episode Includes: All Related Part A and Part B Services Including Hospital Diagnostic Testing and Related Therapeutic Services Furnished by an Entity Wholly-Owned or Operated by the Hospital Three (3) Days Before Admission i All Part A Furnished During Related Readmissions All Part B Furnished During Any Readmission (Related or Unrelated) During Episode Period Episode Ends at Discharge 9/11/2011 ι 31

32 Model 4- Prospective Acute Care Hospital Stay Only Applicants Expected to Propose a Target Price With a Single Rate of Discount (Minimum 3% or Larger For ACE MS-DRGs) Payment Of Agreed-Upon Bundled Payment Is Made To Awardee Physicians To Be Paid By Awardee With No Separate Payment By CMS Payment To Physician Could Be Same Rate or Different Negotiated Rate Covered Part B Claims Will Be Processed As No Pay 9/11/2011 ι 32

33 Model 4- Prospective Acute Care Hospital Stay Only Episode Reconciliation Single Payment Made Awardee Must Repay Medicare for Any Separate Payment for: Part A or Part Claims During the Episode (including a related readmission) Part B Claims During Episode Part B Claims During Any Readmission i (Related or Unrelated) 9/11/2011 ι 33

34 Model 4- Prospective Acute Care Hospital Stay Only Post-Episode Monitoring Monitoring Period = 30 Days After Discharge Awardee Must Repay Medicare Part A and Part B Payments for Services During Monitoring Period In Excess of Trended Historical Aggregate Payment Beyond Risk Threshold 9/11/2011 ι 34

35 BUSINESS CONCERNS AND PERSPECTIVE 9/11/2011 ι 35

36 Commercial Plans are Moving Ahead 9/11/2011 ι 36

37 Value Based Purchasing Design (VBPD) Less Out-of-Pocket for Patients Date: January 1, 2011 Who: ALVARADO HOSPITAL LLC ARROYO GRANDE COMMUNITY HOSPITAL BAKERSFIELD MEMORIAL HOSPITAL CEDARS-SINAI MEDICAL CENTER DAMERON HOSPITAL DESERT REGIONAL MEDICAL CENTER EISENHOWER MEDICAL CENTER EL CAMINO HOSPITAL ENLOE MEDICAL CENTER INC FRENCH HOSPITAL MEDICAL CENTER FRESNO SURGICAL HOSPITAL Good SAMARITAN HOSPITAL HANFORD COMMUNITY MEDICAL CENTER HEALDSBURG DISTRICT HOSPITAL HOAG MEMORIAL HOSPITAL PRESBYTERIAN HUNTINGTON MEMORIAL HOSPITAL JOHN F KENNEDY MEMORIAL HOSPITAL KAWEAH DELTA MEDICAL CENTER LOMA LINDA UNIVERSITY MEDICAL CENTER LONG BEACH MEMORIAL MEDICAL CENTER MERCY MEDICAL CENTER REDDING METHODIST HOSPITAL OF SACRAMENTO PLACENTIA LINDA HOSPITAL QUEEN OF THE VALLEY MEDICAL CENTER SAN ANTONIO COMMUNITY HOSPITAL SAN JOAQUIN COMMUNITY HOSPITAL SANTA MONICA UCLA MEDICAL CENTER SANTA ROSA MEMORIAL HOSPITAL SIERRA VISTA REGIONAL MEDICAL CENTER SONORA REGIONAL MEDICAL CENTER ST AGNES MEDICAL CENTER ST JOHN S HOSPITAL AND HEALTH CENTER ST JOSEPH HOSPITAL ORANGE ST JUDE MEDICAL CENTER ST MARYS MEDICAL CENTER ST VINCENT MEDICAL CENTER STANFORD UNIVERSITY HOSPITAL STANISLAUS SURGICAL HOSPITAL THOUSAND OAKS SURGICAL HOSPITAL TORRANCE MEMORIAL MEDICAL CENTER TWIN CITIES COMMUNITY HOSPITAL INC UC DAVIS MEDICAL CENTER UCSF MEDICAL CENTER VALLEY PRESBYTERIAN HOSPITAL VALLEYCARE MEDICAL CENTER Participating Health Plans: Procedures: Select Orthopedic and Cardiac procedures (single hip and knee replacement and cath with stent placement) 9/11/2011 ι 37

38 Commercial Payer and Research Funding Priority Target Date: April 1, 2011 Funder: Agency for Healthcare Research and Quality Who: Participating Health Plans: Procedures: Selected Orthopedic procedures (hip and knee replacement, knee arthroscopy, and catheterization with stents) 9/11/2011 ι 38

39 Blue Cross Bundling in New Jersey Dr. Richard Popiel, who served as Vice President and Chief Medical Officer of Horizon BCBSNJ and will lead the new company as President and Chief Operating Officer. We re committed to leading a major collaborative effort among physicians, hospitals, policy makers, employers, patients, and insurers to rethink how we deliver quality care and control costs. 9/11/2011 ι 39

40 Why Should a Provider Take Bundling Risk? 9/11/2011 ι 40

41 Bundled Payment: Nothing New Conceptually Medicare participating Heart Bypass Demonstration Medicare participating Centers of Excellence Demonstration Medicare participating Cardiovascular and Orthopedic Centers of Excellence Demonstration CMS Medicare Heath Care Quality Demonstration Project ACE Demonstration Value-based Care Centers CMS National Voluntary Pilot Medicare Cataract Alternative Payment Demonstration ti Geisinger Health System Prometheus Payment Method United Healthcare Oncology Bundled Payment IHA CA Commercial Bundled Payment Project Blue Cross New Jersey Orthopedics Bundled Payment 9/11/2011 ι 41

42 Possible Reform Savings Estimated Cumulative Percentage Changes in National Health Care Expenditures, 2010 through 2019 Hussey P., et al. New England Journal of Medicine 2009;361: HIT denotes health information technology, NP denotes nurse practitioner, and PA denotes physician assistant. 9/11/2011 ι 42

43 CMS Latest Bundled Program Major changes from ACE to BPCII Chronic-disease management bundled payments will be next with Models 5,6,7 CMS implementing effective 2013 CONSOLIDATED Part A and Part B Fiscal Intermediary contractors, staging for nation-wide Bundled Payment deployment Physician Incentive grows from 25% to 50% Patient Shared Savings eliminated Immense creativity being allowed to implement bundled payments in ALL clinical spaces: one version is one version. Un-Bundled FFS Medicare likely to end in /11/2011 ι 43

44 Growing Evidence for Bundled Payment Harvard Study Shows Global Payments Improve Healthcare While Controlling Costs Key findings: Medical spending was two percent lower for Hospitals and physicians involved in global payments compared with those under traditional Fee-for-Service models. For physicians and Hospitals with no prior experience in global payments, spending was decreased d by six percent. Year-one savings were the result of altering referral patterns and shifting care to lower-cost facilities. The quality of care among sites that participate in bundled payments is significantly higher than that of the providers under traditional contracts. Source: Oh, J. (July 14, 2011). Harvard study shows global l payments improve healthcare while controlling costs. Becker s Hospital Review. Retrieved from 9/11/2011 ι 44

45 Building the Foundation for Shared Risk Inpatient Episode Payment Models Fee-for-Service Payer $ $ $ $ $ $ Bundled Payment Payer $ Payer provides single payment intended to cover costs of entire patient hospitalization Post-acute Services Hospital Anesthesiologist Surgeon Hospital Inpatient Physicians Post-acute Services Consulting Physician Hospitalist 9/11/2011 ι 45

46 Mechanisms to Drive Quality and Efficiency A Market Approach: Bundling or global payments Competitive Quality scores and bid will determine winner Gainsharing with physicians expanded Shared savings with beneficiaries eliminated for 2012/2013 version.however, Applicant may request a waiver for all or some of the Medicare deductible. 9/11/2011 ι 46

47 CMS Application Overview Selection Criteria and Weights Financial Model (40 points) Overall Savings to Medicare Risk Adjustment (if applicable) Anticipated Actions that will result in lower spending Quality and Patient Centeredness (25 points) Proposed Mechanisms to Improve Quality and Patient Experience of Care Proposed Quality Metrics Quality Assurance and Continuous Quality Improvement Beneficiary Protections Demonstration Design (20 points) Definition of Episode Level of Provider Engagement and Participation Care Improvement Design for Gainsharing Organizational Capabilities, Prior Experience, and Readiness (15 points) Financial Arrangements Commitment and Credentials of Executives and Governance Bodies Success and Readiness to Participate Partnerships 9/11/2011 ι 47

48 Application Process Financial model and arrangements Organizational structure and governance Current quality and efficiency metrics at 90 th percentile Cost savings opportunities and quality improvement Provider engagement and partnerships Care Redesign Facility and History Marketing plan to beneficiaries 9/11/2011 ι 48

49 Why Others Have Done It? Raise the profile of a high performing Clinical program More effectively partner with physicians Grow market share across payer categories Retain existing Medicare business and grow it Add payers to the existing portfolio Develop management intelligence to deliver high Value care in a bundled payment environment as FFS is dying quickly 9/11/2011 ι 49

50 What Is In It for Physicians? Potential volume increase Protect current Medicare market share Pay physicians more quickly if in Model 4 Co-management of clinical services affecting them Improved quality and patient experience Gain Sharing up to a 150 percent of Medicare Effective and integrated care coordination 9/11/2011 ι 50

51 What s In It for Hospitals? Strengthen service line: Reduction of costs Enhanced operational efficiency Enhance clinical quality Improved patient experience Protect t current market share Build Organizational Mastery to manage to EOC fixed budget Build market share Preferred provider status within region Stepping stone in physician integration supporting progress toward clinical integration or ACO Alignment in care management Co-management of clinical services 9/11/2011 ι 51

52 What s in it for CMS? CMS has reported $42.3 Million in savings in the current ACE Demonstrations with substantial increases in Clinical Quality. 9/11/2011 ι 52

53 Sample Model Four Cardiac Bundled Payment Bid Draft CMS Bundled Payment Bids by MS-DRG for Application - Conservative Discount CY 2011 MS-DRG CY 2010 Medicare FFS Cases Avg. Cont. Margin/Case Hospital Actual Discount Hosp w/ Discount Part A ACE Avg (1) Compare to ACE % Proposed Bid Hospital Actual ACE Avg (2) Part B Compare to ACE % Proposed Bid Total ACE Average Total Proposed Bid $37,969 $80, % $78,214 $65,408 $12,806 20% $78,214 $9,274 $10,846 ($1,573) -14% $10,846 $76,255 $89, ,309 53, % 51,692 45,396 6,296 14% 51,692 8,792 7,543 1,250 17% 8,792 52,939 60, ,320 43, % 41,960 44,001 (2,041) -5% 41,960 5,889 5,899 (10) 0% 5,899 49,900 47, ,125 63, % 62,222 51,155 11,067 22% 62,222 10,438 7,893 2,545 32% 10,438 59,048 72, ,024 42, % 41,778 35,761 6,017 17% 41,778 7,931 5,373 2,559 48% 7,931 41,134 49, ,432 35, % 34,877 31,986 2,891 9% 34,877 5,233 4, % 5,233 36,651 40, ,508 49, % 48,048 38,329 9,719 25% 48,048 2,911 3,290 (379) -12% 3,290 41,620 51, ,508 40, % 39,840 33,028 6,813 21% 39,840 2,178 1, % 2,178 34,853 42, ,130 63, % 61,968 47,495 14,473 30% 61,968 5,632 6,590 (957) -15% 6,590 54,085 68, , % 35,744 43,687 (7,943) -18% 35,744 5,855 6,032 (177) -3% 6,032 49,719 41, ,225 55, % 53,896 46,036 7,860 17% 53,896 6,657 7,277 (620) -9% 7,277 53,313 61, ,766 37, % 36,383 31,692 4,692 15% 36,383 5,503 5, % 5,503 37,052 41, ,059 45, % 44,262 38,709 5,553 14% 44,262 5,804 6,236 (432) -7% 6,236 44,945 50, ,655 30, % 29,316 24,212 5,104 21% 29,316 5,030 4, % 5,030 28,297 34, ,499 26, % 26,075 21,807 4,268 20% 26,075 1,607 2,693 (1,086) -40% 2,693 24,500 28, ,365 20, % 19,634 16,418 3,215 20% 19,634 1,193 1,480 (287) -19% 1,480 17,898 21, ,070 15, % 15,459 13,365 2,094 16% 15,459 1,481 1, % 1,481 14,402 16, ,977 27, % 26,510 18,790 7,720 41% 26, ,428 (2,428) -100% 2,428 21,218 28, ,928 15, % 14,905 13,291 1,614 12% 14,905 1,712 1, % 1,712 14,697 16, ,873 23, % 22,763 17,071 5,692 33% 22,763 2,540 2, % 2,540 19,244 25, ,694 13, % 13,570 11,922 1,648 14% 13,570 1,289 1,477 (188) -13% 1,477 13,400 15, ,756 18, % 18,013 16,111 1,902 12% 18,013 1,705 2,869 (1,164) -41% 2,869 18,980 20, ,035 13, % 13,647 11,977 1,670 14% 13,647 2,620 1, % 2,620 13,741 16, , % 17,742 17, % 17, ,924 (1,644) -85% 1,924 19,268 19, ,472 13, % 12,766 12, % 12,766 1,705 1, % 1,705 13,567 14, ,266 27, % 26,537 29,733 (3,196) -11% 26,537 5,456 6,330 (874) -14% 6,330 36,062 32, , % 12,010 9,735 2,275 23% 12,010 1,319 1, % 1,319 11,018 13, , % 6,909 7,572 (664) -9% 6, (875) -100% 875 8,448 7,784 Total/Avgs 499 $10,295 $24, % $24,320 $20,572 $3,748 18% $24,320 $2,586 $2,629 ($43) -2% $2,942 $23,201 $27,262 (1) Four ACE Demo sites adjusted for FY 2011, Wage Index, and Capital Geographic Adjustment Factor (GAF) (2) Four ACE Demo sites adjusted for FY 2011 and Geographic Practice Cost Index (GPCI) = indicates ACE average w as used for bid 9/11/2011 ι 53

54 Required Beneficiary Education by Provider 9/11/2011 ι 54

55 Extensive Required Quality Measures AMI-1 AMI-5 AMI-9 HF-1 HF-3 PN-2 PN-5c PN-7 SCIP-Inf-2 SCIP-Inf-3 SCIP-VTE-1 VTE-2 VTE-6 STK-2 Aspirin at Arrival Beta-Blocker Prescribed at Discharge Inpatient Mortality Discharge Instructions ACEI or ARB for LVSD Pneumococcal Vaccination Timing of Receipt of Initial Antibiotic Following Hospital Arrival Influenza Vaccination (Note: Reported by Flu Season ONLY) Prophylactic Antibiotic Selection for Surgical Patients Prophylactic Antibiotics Discontinued Within 24 Hours After Surgery End Time Surgery Patients with Recommended Venous Thromboembolism Prophylaxis Ordered Intensive Care Unit Venous Thromboembolism Prophylaxis Incidence of Potentially-Preventable Venous Thromboembolism Discharged on Antithrombotic Therapy STK-5 Antithrombotic Therapy By End of Hospital Day 2 9/11/2011 ι 55

56 Extensive Required Quality Measures STK-6 TK-10 ED-2 HAI Structural-2 Data Accuracy MORT-30-HF READM-30-AMI READM-30-PN PSI-06 PSI-14 IQI-11 IQI-91 HAC-2 Discharged on Statin Medication Assessed for Rehabilitation Admit Decision Time to ED Departure Time for Admitted Patients Central Line Associated Bloodstream Infection (CLABSI) Participation in a Systematic Clinical Database Registry for Stroke Care Data Accuracy and Completeness Acknowledgement Heart Failure (HF) 30-Day Mortality Rate Acute Myocardial Infarction (AMI) 30-Day Readmission Rate Pneumonia (PN) 30-Day Readmission Rate Iatrogenic Pneumothorax, Adult Postoperative Wound Dehiscence Abdominal Aortic Aneurysm (AAA) Mortality Rate (with or without volume) Mortality for Selected Medical Conditions (composite) Air Embolism HAC-4 Pressure Ulcer Stages III & IV HAC-8 Manifestations of Poor Glycemic Control 9/11/2011 ι 56

57 Critical Success Factors Under Bundling Vision, perseverance, and courage Physician leadership and comanagement Targeted education to distribution channels Best practices in cost, efficiency and effectiveness 90 th percentile Quality Legal Structures able to handle Gainsharing 9/11/2011 ι 57

58 LEGAL ISSUES 9/11/2011 ι 58

59 THREE CATEGORIES OF REGULATORY ISSUES Federal laws for which CMS has waiver authority Federal laws for which CMS has no waiver authority State laws 9/11/2011 ι 59

60 CMS Waiver Authority CMS may waive any provision in Titles 11 and18 of the Social Security Act as may be necessary to test models described in statute authorizing Centers for Innovation (Social Security Act section 1115A(d)(1)) This includes the federal CMP statute, the federal anti-kickback statute, and the Stark law Applicant should propose specifically what aspects of the law it wants waived and obtain specific approval for its models and waiver of the potentially applicable laws as applied to those models 9/11/2011 ι 60

61 CMP Statute The CMP statute prohibits payments from hospital to physician to reduce or limit services to Medicare or Medicaid beneficiaries [42 U.S.C. sec. 1320a-7a(b)(1) and(2)] Could be implicated by gainsharing arrangements or other innovative arrangements to economize on care CMS has indicated it will permit gainsharing under bundling models Compensation to be shared cannot exceed 50% of the total savings achieved under the bundled payment program 50% of physician s i normal payment for the cases included d in the gainsharing initiative Physicians may not reduce or limit medically necessary services Physician participation in gainsharing must be voluntary 9/11/2011 ι 61

62 The Stark Law The Stark law prohibits referrals by a physician to an entity with which the physician has a financial relationship for the provision of designated health services ( DHS ) DHS includes inpatient and outpatient hospital services There are numerous and complex exceptions There will likely be various financial arrangements between DHS entities and physicians: Gainsharing Hospital payments to physicians for services May be difficult to fit these arrangements within an existing exception 9/11/2011 ι 62

63 The Federal Anti-Kickback Statute Prohibits the payment or receipt or remuneration to induce referrals of government health care business Some of the arrangements could be perceived as inducing referrals Gainsharing or other payments to physicians Arrangements with post-acute providers could be seen as such providers furnishing remuneration for referrals 9/11/2011 ι 63

64 Non-Waiveable Statutes Federal Antitrust laws Could be implicated if there is collaborate pricing among competitors, or other anti-competitive behavior May occur if model is used beyond Medicare Consider seeking FTC/DOJ Letter Tax-exempt Status Issues Inurement More than incidental private benefit Use of tax-exempt bond financed property Payments consistent with fair market value Cannot share tax-exempt organization s profits 9/11/2011 ι 64

65 State Laws State Anti-Kickback Statutes State Self-Referral Statutes State Statutes Governing Insurance, Health Plans, and Risk- Bearing Organizations State Antitrust laws State Corporate Practice of Medicine Prohibitions 9/11/2011 ι 65

66 Patient Centered Medical Home 9/11/2011 ι 66

67 What is a Medical Home? Patient-centered Medical Home ( PCMH ) All of a patient s care is coordinated by a physician-led multidisciplinary team. Access and care coordination are facilitated by an extensive use of technology. 9/11/2011 ι 67

68 Primary Care Model-Key Features A personal PCP Physician-director medical practice Whole-person orientation Coordinated care Quality and safety Enhanced access 9/11/2011 ι 68

69 Principles of Patient-centered Medical Home Proactive in identifying patient needs Ensure patients have goals for their care and responsibility for health related behaviors Processes assure smooth transition of care and communication between providers (across continuum) Aligned providers Facilitate physician-physician communication When and how based on patient t preference and needs Patient Access and Communication Patient-Centered Quality and Efficient Care Facilities and Technology Metrics used to define performance: quality, access, efficiency Culture of continuous improvement Clear lines of authority/ responsibility and process for decision-making Team orientation Work to top of license Share resources to maximize efficiency Orientation and training Standardized roles and work flows Source: The Camden Group Facilities support teamwork, and efficient work flow Technology facilitates aims of care model 9/11/2011 ι 69

70 The Care Team of the Patient-centered Medical Home Primary Care Provider Care Management Health Education Patient-centered Medical Home Delegated Carve-out texpertise Specialists Behavioral Health Social Services Comprehensive Care Clinics 9/11/2011 ι 70

71 PCMH s Paid in any Number of Ways Can be paid for on a PMPM basis or DFFS Typical Sponsors are Capitated Medical Groups or Integrated Hospitals CMS is conducting a PCMH Demonstration attempting to lower Over all cost of care Gainsharing is utilized to reward goal achievement based upon actual savings seen against historical costs Most results have been marginal so far..utilization gains countered by demographic creep. 9/11/2011 ι 71

72 Questions and Discussion Robert Minkin, FACHE Senior Vice President, The Camden Group Lloyd A. Bookman Partner, Hooper Lundy & Bookman Robert L. Roth Partner, Hooper Lundy & Bookman /11/2011 ι 72