4/9/2016. The changing health care market THE CHANGING HEALTH CARE MARKET. CPAs & ADVISORS
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1 CPAs & ADVISORS experience support // ADVANCED PAYMENT MODELS: CJR Eric. M. Rogers MEd. RT(R) Managing Consultant The changing health care market THE CHANGING HEALTH CARE MARKET HHS goal of 30% of traditional FFS Medicare payments through Advanced Payment Models (APMs) by the end of 2016 and 50% by the end of FFS APMs 2// experience support 1
2 The changing health care market CMMI INNOVATION MODELS Accountable Care BPCI Primary Care Transition Medicaid and CHIP Acceleration Models Speed Adoption of Best Practices ACOs Model 1 Advanced Primary Care Initiative Reduce Avoidable Hospitalizations State Innovation Models Beneficiary Engagement Model Advanced Payment ACOs Model 2 Comprehensive Primary Care Initiative FinancialAlignment Incentive for Medicare and Medicaid Frontier Community Health Integration Community Based Care Transitions ACO Investment Model Model 3 FQHC Advanced Primary Care Practice Strong Start for Mothers and Newborns Health Care Innovation Rounds Health Care Action and Learning Network NextGeneration ACO Model 4 Graduate Nurse Education Medicaid Prevention of Chronic Diseases Health Plan Innovation Initiative Innovative Advisors Program Pioneer ACO CJR Transforming Clinical Practice Medicaid Emergency Psychiatric Demonstration Million Hearts 3// experience support Bundled Payment Popularity Participants in CMMI Payment Models Source: CMMI Website 4// experience support 2
3 Bundled Payment 2013 BPCI Bundled Payments for Care Improvement Model 1 Retrospective acute care hospital stay Model 2 Retrospective acute care hospital stay + post-acute care 48 episodes 2 phases Model 3 Retrospective Post-acute care Model 4 Acute-care hospital stay 5// experience support MSA SELECTION 67 MSAs 6 3
4 Arkansas Hospitals located in selected CJR MSAs CHI St. Vincent Hospital National Park Medical Center 7 PREPARING FOR BUNDLED PAYMENTS From 67 MSAs to ALL MSAs From hips and knees to: COPD CHF AMI Pneumonia 8 4
5 CJR makes cents to CMS $150 $100 $120 $127 $50 $35 $71 In Millions $0 -$50 -$11 Hospital Repayments Medicare Gainsharing Net Medicare Impact -$100 -$150 -$ PREPARING FOR BUNDLED PAYMENTS 10 5
6 42 CFR PART 510 [CMS-5516-P] 60-day public commenting period on proposal ended Sept 8 th Numerous comments Effective April 1, 2016 Key Changes 2% to 3% discount New targets for fractures 67 MSAs 3 month delay Stop loss reduced Quality measures 11 Episode definition: General Episodes are triggered by hospitalizations of eligible Medicare FFS beneficiaries discharged with diagnoses: MS-DRG 469: Major joint replacement or reattachment of lower extremity with major complications or comorbidities MS-DRG 470: Major joint replacement or reattachment of lower extremity without major complications or comorbidities Episodes include: Hospitalization and 90 days post-discharge All Part A and Part B services, with the exception of certain excluded services that are clinically unrelated to the episode 12 6
7 EPISODE DEFINITION: SERVICES Included Physician services IP hospitalization (including readmissions) IP Psych Facility LTCH IRF SNF Home Health Hospital OP services Independent OP therapy Clinical lab DME Part B drugs Hospice Excluded Acute clinical conditions not arising from existing episode-related chronic clinical conditions or complications of the LEJR surgery Chronic conditions that are generally not affected by the LEJR procedure or post-surgical care 13 PAYMENT AND PRICING: RISK STRUCTURE Retrospective, two-sided risk model with hospitals bearing financial responsibility Providers and suppliers continue to be paid via Medicare FFS In Year 2, actual episode spending will be compared to episode target prices If in aggregate target prices are greater than spending, hospital may receive reconciliation payment If in aggregate target prices are less than spending, hospitals would be responsible for making a payment to Medicare 14 7
8 PAYMENT AND PRICING: TARGET PRICE CMS intends to establish target prices for each participant hospital prior to start of each performance period Includes 3% discount to serve as Medicare s savings Based on blend of hospital-specific and regional episode data, transitioning to regional pricing. Essentially competing against yourself in the beginning Year Year Year 1 & 2 2/3 hospital 3 1/3 hospital 4 & 5 100% 1/3 regional 2/3 regional regional 15 REGIONAL HISTORICAL CJR PAYMENTS DRG 469 DRG 470 $47,928 $52,028 $50,954 $46,189 $51,239 $50,328 $55,448 $47,925 $48,874 $24,858 $27,406 $25,480 $23,800 $25,989 $26,345 $27,464 $23,734 $23,425 New England Middle Atlantic East North Central West North Central South Atlantic East South Central West South Central Mountain Pacific 16 8
9 TARGET PRICE CALCULATION: DRG 470 $26,000 $25,000 Wage Index DSH IME $24,000 $23,000 $23,800 $22,456 +/-? $ Target $22,000 $21,000 1/3 2/3 $20,000 Regional Average Sample Hospital Target Year 1 & 2 17// experience support UPSIDE AND DOWNSIDE FINANCIAL MODELING 0-20% Stop Loss $7,344,781 $9,330,051 Example Reconciliation Target 5-20% Stop Gain 359Total Episodes Episode # 324 of 359 $63,460 $53,516 (2X SD) $21,338 18// experience support 9
10 PAYMENT AND PRICING: LINK TO QUALITY Minimum threshold for 2 quality metrics Hospital Level Risk Standardized Complication Rate following elective hip and knee arthroplasty HCAHP 3 decile improvement Voluntary THA/TKA data submission of patient reported outcomes 19 QUALITY POINTS THA/TKA Complications 90 th th and < 90 th th and < 80 th th and < 70 th th and < 60 th th and < 50 th th and < 40 th <30 th Decile Improvement Yes 2.00 No 0.00 HCAHPS Survey THA/TKA Voluntary PRO and Limited Risk Variable Data Total Points 14.1 Poor: < 6.0 3% discount Good: % discount Excellent: > % discount 20 10
11 FINANCIAL ARRANGEMENTS: GAINSHARING Consistent with applicable law, participating hospitals might have certain financial arrangements with Collaborators to support their efforts to improve quality and reduce costs. Collaborators may include: Physician and non-physician practitioners Home health agencies SNF LTCH Physician group practices IRF Inpatient and Outpatient PTs and OTs 21 FINANCIAL ARRANGEMENTS: GAINSHARING CJR Collaborators may share in both upsideand downsiderisk associated with participating in the program CJR requires signed written agreements with the Collaborators and (if applicable) also agents of the CJR Collaborators Collaborator Agreement Distribution Agreement CJR regulations set forth a number of regulatory requirements be mindful of these requirements when establishing the program and drafting the documents/agreements Compliance with the program requirements is necessary to be afforded protection under the fraud and abuse waivers 22 11
12 ALIGNMENT PAYMENTS Participant Hospitals may include the following in a sharing arrangement (and nothing else): Reconciliation Payments: payment from CMS to a CJR hospital when the hospital realizes a positive Net Payment Reconciliation Amount (NPRA) Internal Cost Savings: measurable verifiable cost savings realized through care redesign activities associated with services furnished to beneficiaries during a CJR episode Alignment Payments: payment from a CJR Collaborator to the a participant hospital whereby the Participant Hospital shares downside risk with CJR Collaborators 23 CJR SELECTION CRITERIA Develop written selection criteria for CJR Collaborators Selection criteria for CJR Collaborators must relate to the quality of care to be delivered (it can be prospective or retrospective) Examples from CMS include: Prior complication rates Attending weekly care coordination meeting Following specified clinical pathways Contacting CJR beneficiaries frequently Selection criteria cannotbebased, directly or indirectly, on the volume or value of referrals 24 12
13 FINANCIAL ARRANGEMENTS: RISK SHARING Participant hospitals may assign various percentages of twosided risk to collaborators. CMS would continue to make reconciliation payments and recoupments solely with the hospital. The hospital would be responsible for paying/recouping from its collaborators. CMS will limit the hospital s sharing of risk to 50% of the total repayment amount to CMS. Hospitals can t share more than 25% of the risk with any one CJR Collaborator 25 REQUIREMENTS Establish Board or other Governing Body oversight of CJR Update Compliance Plan to include oversight of CJR Maintain current and historical list of CJR Collaborators published on participant hospital s website Issue required Beneficiary Notifications (CMS to issue forms) Satisfy documentation requirements, E.g. Contemporaneous documentation of gainsharing payments Compliance requirements 10 year record retention Set-up process for EFT payments 26 13
14 Development of CJR Collaborator Agreements Internal Cost Savings Strategy Engaging Collaborators Process Goal: Determine entities to approach as collaborators Understand Collaborator Agreements Satisfy written selection criteria requirements Identify specific collaboration goals Analyze available information & data to identify and select Collaborators Identify basic financial sharing methodologies Goal: Determine specific ICS parameters in Sharing Arrangements Identify incentive goals implant cost savings, OR Efficiency etc. Analyze available data for each goal Decision Support, EHR Develop internal cost savings methodologies in compliance with CJR Select Quality Performance Metrics & analyze potential outcomes Goal: Approach potential Collaborators and finalized arrangement parameters CJR Rule Education, Collaborator Agreements and Parameters of Agreements Provide scenario analyses based on levels of success Get collaborators comfortable with data & process Negotiate terms and parameters of Agreements (Financial & Quality) Identify related alignment opportunities Document sharing arrangements with negotiated parameters Ongoing Support Goal: Develop reporting mechanisms and monitor compliance of calculation Determine specific procedures to perform related to the calculation Monitor performance of procedures Identify data anomalies Share progress with Collaborators Develop and implement control procedures for calculations 27 PROGRAM WAIVERS Skilled Nursing Facility CJR would waive the SNF 3-day rule for coverage of a SNF stay following the anchor hospitalization beginning in Year 2 Patients must be transferred to SNFs rated 3-stars or higher Beneficiaries must not be discharged prematurely to SNFs Home Visits CJR would waive the incident to rule for physician services Allows the licensed clinical staff of a physician to furnish a home visit in the patient s home Permitted only for patients who do not qualify for Medicare coverage of home health services Maximum of 9 visits using a new HCPCS code Telehealth Waives the geographic site requirement and the originating site requirement to permit visits originating in the patient s home or place of residence Cannot be a substitute for in-person home health services Must be furnished in accordance with all other Medicare coverage and payment criteria 28 14
15 DATA SHARING Data will be shared to evaluate practice patterns, redesign care delivery pathways and improve care coordination. Hospitals can request to obtain beneficiary-level Part A and B claims for the duration of the episode in summary format, raw claims line feeds, or both. Data would be available for the hospital s baseline period and on a quarterly basis during the performance period. Aggregate regional claims data for MS-DRG 469 and 470 would also be shared Hospitals must request data in order to receive it 29 OTHER ITEMS Beneficiary protection Providers and suppliers would be required to notify patientsof the payment model. Patient s access to care would not be impacted by the CJR model. Copays would not change Patient provider relationships would be maintained Patients retain entitlement to Medicare covered services Monitoring CMS will monitor compliance with the model requirements CMS will monitor potential risks Increasing profitability by delaying care Decreasing costs by avoiding medically indicated care Avoiding high cost patients Compromised quality or outcomes 30 15
16 Case Study 31 GOVERNANCE AND OVERSIGHT Prehab Finance Acute Steering Committee IT Transitions PAC 1 32// experience support 16
17 DATA ANALYTICS // experience support DATA ANALYTICS Patients Physicians Post-Acute Providers Risk Stratification // experience support 17
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19 37 38// experience support 19
20 39// experience support 20
21 CARE PATHWAY VALUATION DRG 470 Post Acute Utilization $15,226 Home Health 71% Skilled Nursing 17% $9,213 Hospice 2% Other 10% $2,787 41// experience support 21
22 43 22
23 SPENDING BY AGE $40, $35, Medicare s Episode Payments $30,000 $25,000 $20,000 $15,000 $10,000 $5, Patient Volume by Age $ // experience support USING DATA TO REDESIGN CARE DRG 470: TOTAL HIP VS PARTIAL HIP 46// experience support 23
24 PATIENTS PROCEDURE DISTRIBUTION: DRG 470 Partial Hip Total Hip Total Knee $31,934 13% $17,266 $16,777 20% 67% 47// experience support 48// experience support 24
25 49// experience support MONITORING PROGRESS Monthly progress reports Key metrics dashboard Data Custodian Target price calculation Reconciliation // experience support 25
26 PROJECT MANAGEMENT Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Kick-off Work Groups Data Review Collaborator Update Progress Report Gainshare Review Outcomes Compass Data Analysis and Review Data Analytics Review: Outcomes Compass Collaborator Identification Gainshare Model Development Physician Workshop Post-Acute Workshop Value Stream Mapping Work Group Team Meeting Acute, Transitions, IT Work Group Team Meeting Post Acute Care Pathway Redesign Care Delivery Enhancement Care Coordination 1Q Reporting 2Q Reporting 3Q Reporting 4Q Reporting 51// experience support THANK YOU FOR MORE INFORMATION// For a complete list of our offices and subsidiaries, visit bkd.com or contact: Eric M. Rogers M.Ed. RT(R) // Managing Consultant erogers@bkd.com// // experience support 26
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