Succeeding in Value-Based Care CareConnect Journey
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1 Succeeding in Value-Based Care CareConnect Journey Donna Mueller VP Network Development Jake Arrastia VP Strategy Development & Innovation
2 Bundled Payments: Risk = Opportunity
3 Value Based Reimbursement: Framing the Situation Bundled Payments: Risk = Opportunity
4 Mega-drivers shaping the PAC industry The Affordable Care Act created policies that is exerting significant impact on models of patient care, organizational structure of health providers/payors and methods of reimbursement Market players are becoming more incentivized to manage adverse outcomes by re-designing how they do care transitions and care management within an episodic environment Increasing need to manage episodic care is encouraging institutions to form provider networks and accountable care organizations Lastly, CMS is laying the foundation to reward healthcare transformation initiatives by piloting pay-perperformance and/or risk bearing reimbursement models Specific to PAC, market drivers aim to reduce cost and variability in practice while improving patient experience and outcomes Avamere Strategy Planning: October 2012 Market Trends & Drivers Institute of Medicine: October 2013 Variation in Health Care Spending
5 The CMS Goal
6 Hospital Readmission Penalty
7 Hospital Readmission Penalty
8 Hospital Value Based Purchasing
9 Value Based Purchasing
10 MSPB: Medicare Spending Per Beneficiary
11 SNF Value Based Purchasing
12 SNF Update to 5-Star Rating
13 SNF Claims Based Measures
14 Bundled Payments: moving to value-based care Fee-for-Service Bundled Payment Payor patient has PAC healthcare needs Patient accesses PAC providers Providers bill payor for service Payor pays providers for services billed Payor patient has PAC healthcare needs Payor defines bundle price for a defined DRG & period Convener manages actual costs Payor pays providers for services billed Convener gets reward or penalty based on bundle price & actual costs
15 Mandatory BPCI: CCJR is a reality CMS Bundled Payments BPCI CCJR DRG's 48 DRG Families (180+ DRG's) 1 DRG Family (469 & 470) Geography Nationwide 67 MSA's Providers at Risk Episode Lengths Voluntary IPPS Hospitals, PPG, SNF, HHA Acute Stay Acute Stay + Post-Acute Post-Acute Only Mandatory IPPS Hospitals Acute Stay + Post-Acute 30, 60 or 90 day 90 day only Duration of Pilot 3 years 5 years Target Price provider specific progressive (sliding scale provider > regional) Mandatory Episodic Cost Reduction 3% 1.7% - 3% Risk upside and downside risk upside for yr. 1 upside & downside yr. 2-5 Reconciliation quarterly yearly BPCI = Bundled Payment for Care Improvement; CCJR = Comprehensive Care for Joint Replacement
16 Bundled payment continues to expand
17 BPCI 3.0 may be coming
18 Bundled Payments: Introduction Bundled Payments: Risk = Opportunity
19 BPCI- moving to pay-per-performance The CMS BPCI (Bundled Payment for Care Improvement) is a three year pilot on a pay-per-performance reimbursement model designed to reduce healthcare spending within a network of providers Risk bearing organizations (Conveners) who excel in managing episodic costs will rewarded a share of the Medicare savings and vice versa Conveners may choose to bear risk for a 30/60/90 day period in 3 risk tracks for each of the 48 DRG families representing 181 DRG s Risk and gain sharing is done through quarterly retrospective reconciliation of 30,60 or 90 day claims CMS has a goal of expanding risk bearing programs to 30% of all beneficiaries by 2016 and 50% by 2018 Fee-for-Service Bundled Payment Payor patient has PAC healthcare needs Patient accesses PAC providers Providers bill payor for service Payor pays providers for services billed Payor patient has PAC healthcare needs Payor defines bundle price for a defined DRG & period Convener manages actual costs Payor pays providers for services billed Convener gets reward or penalty based on bundle price & actual costs
20 BPCI- mechanics of risk sharing with CMS CMS has defined 48 DRG families for which 30, 60 or 90 day bundled contracts can be made For each Episode Initiator (EI), CMS determines the DRG base payment by considering 30/60/90 day claims from the baseline period ( ) data at the EI, CBSA and state level are used to calculate the mean base payment For each DRG, a target price is set by discounting the mean base payment by 3%... In addition, the target price will be adjusted quarterly by a maximum of +/-3% using national trend factors Every quarter, CMS will reconcile claims covered in the bundle period by subtracting actual costs from the target cost for all episodes included in the bundle and consolidating this projected gain at the convener level CMS remits the actual gain which is the lesser amount between the projected gain and the 20% cap BPCI Reconciliation Target Price # Episodes Target Cost Actual Cost Projected Gain 20% Cap Actual Gain Scenario 1 $ $ 1,000 $ 850 $ 150 +/- $200 $ Scenario 2 $ $ 1,000 $ 750 $ 250 +/- $200 $ Scenario 3 $ $ 1,000 $ 1,100 $ (100) +/- $200 $ (100.0) Scenario 4 $ $ 1,000 $ 1,250 $ (250) +/- $200 $ (200.0) Net Positive Reconciliation Net Negative Reconciliation Reference Formulas: Base Payment = average of historic claims included in the bundle period Target Price = base payment x 3% x trend factors Target Cost = target price x # episodes Projected Gain = target cost actual cost 20% Cap = target price x 20%
21 BPCI- anatomy of the bundled cost BPCI requires discipline in managing all post-acute care costs up to 90 days after an acute stay hospital discharge which includes SNF stay, skilled home health services, physician consults, DME, out-patient rehab and hospital services cost for any emergent care use or hospital readmission Based on Avamere historic data, reducing 90 day readmission rate to by 34% to 14% will result in the 3% savings mandated by CMS Additional savings can be realized by managing SNF and HHA cost, or 77% of the cost, while keeping or further reducing 90 day readmission rates 21.2% readmission rate Episodic Stats: Avamere SNF ; (All) 50.7% received HH All DRG's $224 $2,175 $17,828 $1,602 $2,055 $693 0% 20% 40% 60% 80% 100% $ Readmit $ SNF $ HHA $ DME $ MD $ Uncontrol
22 CareConnect: Strategy for Value-Based Reimbursement Bundled Payments: Risk = Opportunity
23 Support Servic Comprehensive Continuum of Care From home through hospice, with patient care supported by ancillary service capabilities Continuum of Care HOME CARE / HOME HEALTH INDEPENDENT LIVING ASSISTED LIVING RESIDENTIAL DEMENTIA / MEMORY CARE SKILLED NURSING HOSPICE s e
24 Journey to Risk-Bearing Branded CareConnect for Avamere Continuuminternal sales Implementation of systems within the Avamere Family of Companies Using the CareConnect strategy, Avamere moved 25 skilled nursing facilities and 6 home health agencies to risk bearing entities for 90 day episodic period for 46 of the 48 DRG families Research and development of CareConnect systems initiated CMS re-opened Bundled Payment for Care Improvement Program. This presented the opportunity to test CareConnect systems and processes within a live risk bearing environment.
25 Network strategy for managing risk The CareConnect strategy for managing risk in bundled payments, and other pay-for-performance programs, have three key components: 1. Planning: using the CMS claims data extensively, opportunities for gain are identified and provider readiness is established 2. Operations: standardizing essential network competencies by implementing care re-design initiatives and formulating appropriate EMR tracking activities 3. Performance: ensuring network performance through deliberate use of dashboards and financial governance tools
26 Bundled Payment: potential gaps 5: Patient goes to ED or gets readmitted 1: Not a preferred provider to hospitals Hospital Unable to identify 2: bundled patients HH ALF 6: Medicare penalty due to poor episode management SNF Unable to track bundled 3: patients in continuum ILF 90 Day Episode 4: Patient referred to non-careconnect provider
27 Redesigning post-acute care for accountable care Recognizing risks from patient transfers among venues of care, Avamere developed and implemented CareConnect to reduce hospital readmissions, lower costs and improve patient satisfaction the triple aim of health care reform CareConnect combines technology, business and clinical processes, data and dedicated personnel to create an integrated and comprehensive approach to patient care across all venues of post-acute care Coordinated Care Transition PLACES - Risk Stratification Ongoing Monitoring / Coaching Patient Engagement In-House Clinical Care Post- Discharge Monitoring Attributes of CareConnect include: Single patient entry point for reliable care coordination Proprietary patient screening methodologies and clinical guidelines to understand and communicate patient state and ideal placement Clinical and non-clinical activities tightly integrated to ensure patient experience and safety Clinical and non-clinical resources used to monitor patient health, manage program costs and document effectiveness CareConnect has demonstrable results in addressing health care reform s triple aim Reduce Hospital Readmissions Lower Cost of Care Improve Patient Satisfaction
28 BPCI: Opportunity Assessment Since 2012, Avamere has taken steps to implement best practices in risk and care management Outcomes resulting from best practices positions Signature to bear risk for 47 of 48 DRG families in the CMS BPCI Program For 67% of BPCI patients, variability in care and patient outcomes have resulted in 31% reduction in 90 day episodic cost vs episodic data 2013 vs All 2014 All 2014 Bundle Patients 30 Day % Readmit 19% -6% -7% 90 Day % Readmit 26% -8% -9% 90 Day Cost $ 24,493 $ (6,773) $ (7,690) Readmit Cost $ 3,506 $ (1,267) $ (1,791)
29 Learning and Decision Points along the way Model 3: Mitigating low volume risk Procedural re-design vs Complex Chronic Disease Management Blending scenarios Addressing rising acuity The past does not equal the future
30 CareConnect and Bundled Payment 1: Patient has acute care stay Based on actual cost VS. target price, Medicare either gain OR risk shares 5: Acute Care Clinical Liaison funnels referral to SNF or HH 2: SNF or HH becomes 3: episode initiator SNF HH ALF ILF 90 Day Episode 4: CareConnect manages PAC cost for 90 days SNF stay HH services All supplies MD visits OP service ED visits Hospital readmissions
31 Bundled Payments: Risk = Opportunity Bundled Payments: Learnings & Next Steps
32 BPCI Success: organization culture matters L HHA 1 SNF 1: 209 episodes SNF 2: 204 episodes HHA 1: 96 episodes SNF 1 SNF 2 $22,450 target cost $29,778 target cost $11,860 target cost Succeeding in BPCI is extremely difficult SNF 1: Unstable leadership can quickly turnaround good performance SNF 2: Stability in core team = stability in performance HHA 1: Having a mindset for continuous improvement leads to performance improvement
33 Develop workforce adaptable to future trends NS Bersin Talent Management Maturity Model HR Strategy that stabilizes workforce in the face of rapid change is critical Make leadership development programs that is accessible to go-getters and visible to the whole company Adopt proven models for developing workforce competencies in the organization
34 Use Lean for continuous improvement NS You cannot improve if you do not know what you did Adopt Lean principles to standardize process for making incremental changes in practice End all change initiatives with daily management systems reinforced by dashboards and employee scorecards
35 Per Episode Narrow Networks: obvious vs. not so obvious L BPCI Episodes (by ALOS) Episodes # Providers All SNF's 241 Top Performers Day Cost $19,835 $17,941 Anchor Provider Cost $12,045 $10,297 Narrowing network of downstream providers is a low hanging fruit in P4P Intimate knowledge of claims data provides roadmap for network strategy Readmit Cost $2,005 $1,612 Savings $613 $2,706 Total Savings $147,843 $652,102 However, most narrow network RFP s are based on self-reported or publicly reported information Public data can only offer alternate facts not actual facts
36 Providers are narrowing PAC networks
37 Narrow Networks: use market data to make decisions NS Hospital 90 Day Episodic Metrics Prospective SNF Network P4P Metrics Assemble claims data to create meaningful dashboards that demonstrate market performance Use data to assess fit & finish for designing provider network strategies and network-level business process re-design
38 Triple Aim: cost vs. outcomes L BPCI Episodes (by ALOS) % 90 Day Readmission $ Readmit Cost $ 90 Day Cost 14 days or less 18.6% $3,807 $15, days 6.7% $2,415 $21, days or more 6.0% $1,389 $35,365 All Patients 20.8% $2,834 $21,163 Cost and clinical outcomes can be conflicting priorities QA initiatives may lead to improved outcomes thus lower costs Utilization management always leads to lower costs Depending on P4P program, it can be more tempting to just pursue utilization management
39 Use data-driven and empirical-based approach to rehab NS For every gain of 0.32 ft/s 30% risk reduction in disability 18-24% risk reduction in mortality Create care delivery model that delivers maximum outcome for a given utilization target Adopt standardized functional measures that have benchmarks for acceptable gains and that correlate highly with prognosis Leap Frog. Provide therapy that produces higher level functional gains Drive accountability by tying performance appraisal with adherence and performance metrics reported via monthly dashboards
40 Good Outcomes: skilled care is not for everyone L BPCI Episodes (by ALOS) Completed 90 Days Ended in Death Multiple Readmits % Share of Episodes 79% 21% 5% SNF ALOS % Received Hospice 2% 40% na % 90 Day Readmission 19% 42% 41% $ Readmit Cost $2,162 $5,423 $21,572 $ 90 Day Cost $20,925 $22,080 $46,401 Fee-for-Service encourages increased access to skilled care In population health, the costliest patients are the most acute / complex / chronic For this group, skilled care does not always deliver good outcomes despite increase in cost
41 Align rehab to value-based care NS Create predictive clinical decision support tools that stratify patients based on capacity for skilled rehab. and potential for improvement Create foundation for predictable practice = standardized tests + standardized practice + quantitative analysis Define pathway for compensatory rehab. & chronic disease management ie. hospice care, palliative care, community-based primary care
42 Was it worth the pain? Practicing risk-bearing positions us for CJR, Value-based purchasing, utilization compression, and the new 5 star requirements We ve established preferred provider relationships by being a firstmover in the marketplace The BPCI program is a double edged sword that provided the incentive and risk motivation to move our organization more quickly toward value-based care We are not where we planned to be-- We did not factor in turnover and resulting impact on BPCI systems
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