Medicare s Bundling Initiatives: Tom Stitt, CPA, CHFP, Vice President, Finance & Reimbursement Brian Ellsworth, MA, Director, Payment Transformation Health Dimensions Group HDG 2015 Health Dimensions Group: What We Do Strategic Consulting Strategic planning and positioning Health care continuum alignments Market growth strategies PACE development Bundling implementation Senior service line development Post-acute medicine development Operational and Performance Improvement Clinical Financial and billing Regulatory compliance Reimbursement advisory Transaction advisory Business office support Operations reengineering Management Solutions Strategic planning and positioning Turnaround management Transitional leadership Full-service management Acquisitions & divestiture Interim management HDG 2015 1 2015 Health Dimensions Group 1
HDG s Experience With Bundling Health Dimensions Group has assisted health care systems representing over 75 post-acute episode-initiating providers in participating in Medicare s Bundled Payments for Care Improvement (BPCI) initiative Along with our data partner, Dobson DaVanzo, Health Dimensions Group provides consulting and analysis for providers to self-convene (directly take risk) or participate with other conveners by: Interpreting CMS policies Analyzing Medicare claims data Consulting on care redesign Advising on optimal strategy HDG 2015 2 Structure for Today s Conversation The Landscape for Value-Based Care Bundled Payments for Care Improvement Comprehensive Care for Joint Replacement Model Care Redesign HDG 2015 3 2015 Health Dimensions Group 2
The Shift to Value-Based Care HDG 2014 Payment Is Rapidly Shifting from Rewarding Volume to Value No Quality Measurement More Quality Measurement FFS Pay for Performance Care Coordination Episodes of Care Shared Savings Shared Risk Global Payments No Financial Risk More Financial Risk Source: New York State Department of Financial Services. July 2014. New York Health Care Cost and Quality Initiatives. Available at http://www.dfs.ny.gov/reportpub/payment-reform-report.pdf. HDG 2015 5 2015 Health Dimensions Group 3
Value-Based Purchasing (VBP): Rampant Goal Setting Underway! This is the first time in the history of our program that explicit goals for alternative payments and value-based payments have been set for Medicare. Sylvia Mathews Burwell Secretary of Health and Human Services January 26, 2015 State Medicaid programs and commercial payers are jumping into the value-based arena as well HDG 2015 6 Health & Human Services Goals for VBP Medicare fee-for-service (FFS) payments linked to quality and alternative payment models in 2016 and 2018 targets All Medicare FFS (Categories 1 4) FFS linked to quality (Categories 2 4) Alternative payment models (Categories 3 4) 2016 2018 30% 50% 85% 90% Source: http://www.cms.gov/newsroom/mediareleasedatabase/fact-sheets/2015-fact-sheets-items/2015-01-26-3.htm HDG 2015 7 2015 Health Dimensions Group 4
Private Health Care Transformation Task Force Sets Goal of 75% VBP by 2020 Providers Patients Payers Employers HDG 2015 Source: Health Care Transformation Task Force website, accessed October 21, 2015. http://www.hcttf.org/ 8 Lofty Ambitions Financial and regulatory incentives drive a delivery system which realizes cost efficiency and quality outcomes: value and numerous details HDG 2015 9 2015 Health Dimensions Group 5
Number of Bundling Models Continues to Grow Medicare BPCI Commercial Medicaid Medicare Managed Care Medicare Comprehensive Care for Joint Replacement HDG 2015 10 Billions 2022 Goal: Minimum 50% of Total Medicare PAC Provider Payments Bundled $40 $35 $30 $25 $20 $15 $10 $5 Reduce Spend by -2.85% $0 2013 2015 2017 2018 2020 2022 Pilot began Oct. 1 Add new participants Jan. 1 All PAC providers HDG 2015 Source: Budget of the United States Government, FY 2016; http://www.whitehouse.gov/omb/budget 11 2015 Health Dimensions Group 6
Medicaid Programs Have Begun to Adopt Bundling Strategies Arkansas has functioning example of Medicaid value-based payment system designed to work with multiple payers Principal accountable providers ranked by episodic cost after meeting quality threshold Applies to about a dozen chronic care conditions typical of under-65 population, with more expected to be added Source: Golden, W. and N. Sanchez, Episode Bundling: Innovative Approach for Payment Reform. HIMSS Annual Conference. April 15, 2015. New York State requiring that 80% of Medicaid payments be made under value-based framework within five years HDG 2015 12 Commercial Plans Are Bundling In the next 3 years, bundled payments will represent 35% of U.S. health systems revenue 24% of health plans currently implementing bundled payment contracts Health Systems Average Percentage of Hospital Revenues by 2018 1 38% 35% 27% Bundled Payment Implementation Plans 2 No Plans 42% Currently Implemented 24% Health Plans Bundled Payment Implementation Progress 2 What phase of bundled payment plan implementation is your health plan currently in? Fee-for-Service Bundled Payments Capitated or other payments w/insurance risk Planning to Implement 34% Early Mid Late Unsure 1 Source: Health Enterprise Partners, Seizing Opportunity in the Wake of Reform-Executive Perspective Survey, 2012 2 Source: Avality, The Health Plan Readiness to Operationalize New Payment Models, April 2013. The study was administered by independent research firm Porter Research in the fourth quarter of 2012. Porter Research completed interviews with qualified participants of 39 health plans that represented more than 50% of total covered lives in the United States. Target participants included: quality management leadership, medical directors, and chief medical officers. HDG 2015 13 2015 Health Dimensions Group 7
New Companies Emerge to Convene Risk Taking Under Bundling Navigator and bundler of postacute services Accepts financial risk through capitated contracts from health plans; bundled payment arrangements with hospitals/health systems and CMS Manages patients and risk via robust predictive analytics tools, proprietary patient assessment tools that match patient characteristics to resource needs, and field-based case managers who serve as resources to facility staff http://navihealth.us/ Develops/manages bundled payments programs in partnership with hospitals, physician groups, health systems, skilled nursing facilities, and home health agencies Operates the nation s largest bundled payment program, with 22 live programs and more than 500 in development http://remedypartners.com/ HDG 2015 14 Bundling Creates Opportunities and Challenges HDG 2015 15 2015 Health Dimensions Group 8
Post-acute Care Plays a Key Role in Medicare Expenditures Medicare Acute Hospital Discharges 43% Sent to Post-acute Skilled Nursing 41% Home Health 37% Acute Rehab 10% Outpatient 9% With the bulk of post-hospital patients, SNF & HHA represent key settings for controlling total costs and managing outcomes Health systems often have limited control of costs and outcomes sent to non-affiliated post-acute settings LTACH 2% HDG 2015 Source: MedPAC Testimony, 2013 16 Source: http://www.nejm.org/doi/full/10.1056/nejmp1315607 HDG 2015 17 2015 Health Dimensions Group 9
Nearly Half of Hospitalizations of Elderly May Be Preventable Concerns about legal liability & regulatory sanctions for attempting to manage acute illnesses in nonhospital setting Medicare reimbursement policies for hospitals, NH, HHA & physicians Patient & family preferences ED time pressures & availability of communitybased care options after ED discharge Source: Measurement of Potentially Preventable Hospitalizations White Paper Prepared for Long- Term Quality Alliance, K. Maslow and J. G. Ouslander, MD, February 2012 Availability of diagnostic & pharmacy services in home & LTC institutional settings Availability of trained MDs, NPs, PAs, RNs & PCAs in home & LTC institutional settings Availability of individual patient advance care plans & physician orders for palliative or hospice care HDG 2015 18 Challenge: Costs Vary by Initial Setting Average Medicare Episode Payment for MS-DRG 291 (CHF) by First-PAC-Setting for 30-day Fixed-length Episodes (2007-2009) $45,293 $33,295 Overall Average = $14,928 $20,318 $23,679 $13,470 $12,388 HHA SNF IRF LTCH STACH Community Notes: Dobson DaVanzo analysis of research-identifiable 5% SAF for all sites of service, 2007-2009, wage index adjusted by setting and geographic region, and standardized to 2009 dollars Source: Dobson, A., et al. (2012, October). Medicare payment bundling: Insights from claims data and policy implications. Retrieved from HDG 2015 American Hospital Association website: http://www.aha.org/research/reports/12bundling.shtml 19 2015 Health Dimensions Group 10
Challenge: Too Many Downstream Providers Example of downstream network for one Texas hospital for congestive heart failure and joint replacement: 59 downstream post-acute providers for CHF 218 downstream post-acute providers for joint replacement DRG HHA SNF IRF LTCH 291: Heart failure & shock w MCC 39 14 3 3 470: Major joint replacement or reattachment of lower extremity w/o MCC 118 66 28 3 Total (All MS-DRGs) 577 218 55 27 Source: Dobson DaVanzo analysis of 100% Medicare Claims data July 2009 to June 2012 In 2008, North Shore-LIJ started from a list of 266 SNFs and created a continuing care network (CCN) of 19 SNFs (Source: HFMA) HDG 2015 20 Challenge: Infrastructure for VBP Not There Yet Needs include: Robust exchange of diagnostic and other clinical information across settings in real time through interoperable EMRs Is this admission an ACO or bundled patient? Health information exchanges (HIEs) struggling to achieve scale Readily accessible and uniform administrative data (claims & patient assessment data) as well as quality metrics Federal IMPACT Act will help address this problem, but help needed at state level HDG 2015 21 2015 Health Dimensions Group 11
VBP Landscape Summary VBP is both a challenge and an opportunity High-performing providers will get in preferred networks based on quality and cost; others may get left out Avoiding hospitalizations is a major area of opportunity Medicare has developed know-how and data infrastructure and will accelerate VBP implementation; other payers are already following suit Policies that are impediments to VBP will be changed Scale matters certain markets will reach a tipping point quicker than others due to interactive effect of payment initiatives and providers ability to scale their care redesign HDG 2015 22 Not Taking Risk May No Longer Be an Option HDG 2015 23 2015 Health Dimensions Group 12
Medicare Bundling Fundamentals Bundled Payments for Care Improvement (BPCI) HDG 2015 Medicare Bundled Payments for Care Improvement (BPCI) Initiative Established as three-year, voluntary demonstration program by Center for Medicare & Medicaid Innovation (CMMI) Four models to choose from: Specifications vary by model, with upfront discounts of 2% 3% depending on model type and episode length Most attention has been focused on Model 2 (hospital initiated) and Model 3 (post-acute initiated) Opportunity for providers, including physician group practices (PGPs), to directly take risk as well HDG 2015 25 2015 Health Dimensions Group 13
Medicare s BPCI Initiative Types of Services Included in Bundle Model 1 Acute Hospital Stay Only Model 2 Acute Hospital + Post-Acute Model 3 Post-Acute Care Only Model 4 Acute Hospital Stay + Readmissions Inpatient hospital and physician services Related post-acute care services Related readmissions Other services defined in bundle (Medicare Parts A & B) Target to performance payment Retrospective Retrospective Retrospective Prospective HDG 2015 26 Bundles Occur for Diagnostic Categories Over an Episode Diagnostic categories selected from one of 48 possible diagnostic categories Major Joint replacement of the Lower Extremity has been the most popular so far Episodes are 30, 60, or 90 days in length Commence with episode initiating anchor admission Base period target price is compared to performance period expenditures on an apples-to-apples basis Reconciliation occurs after the fact HDG 2015 27 2015 Health Dimensions Group 14
Model 2 Versus Model 3 Model 2 Bundle Holder/At-risk Entity = Hospital Initiated by hospital with hospital admission Episode- Initiating Hospital Admission PAC Services Physician Services Model 3 Readmissions Other Services* Initiated by SNF/HHA admission after hospital discharge Episode- Initiating PAC Service Bundle Holder/At-risk Entity = PAC Provider Other PAC Services Physician Services Readmissions Other Services* Note: Bundle holders may put in place contracts with downstream providers in which they share both financial risk and reward for episodes * Includes Part B drugs, hospital outpatient services, DME, and laboratory services, hospice and unrelated conditions excluded HDG 2015 28 Model 2 and Model 3 Bundling Are Virtual Programs In Models 2 and 3 bundling, no money changes hands upfront All providers are paid through regular fee-for-service rules and coverage criteria Bundling is a retrospective calculation where actual fee-for-service expenditures for each quarterly performance period are compared to target prices with an upfront discount HDG 2015 29 2015 Health Dimensions Group 15
Bundlers Can No Longer Add Diagnostic Groups After October 1, 2015 Applications were required April 2014 Awardees needed to enter risk January, April, or July 2015 Last opportunity to add clinical episodes was October 1, 2015 CMS has indicated that another round of bundling is possible after evaluation of current participants HDG 2015 30 CMS Recently Released Critical Bundling Growth Information CMS announced that 2,115 organizations are participating in BPCI by accepting risk as of July 1, 2015 Up from 214 organizations in first round of bundling, represents a ten-fold increase 4,500 providers who had applied did not opt to move forward The 2,115 participating organizations consist of 360 awardees (entity that has signed a risk contract with CMS) with 2,046 episode-initiating providers: Episode initiator breakdown: 423 hospitals; 1,071 SNFs; 441 PGPs; 101 HHAs; 9 IRFs; 1 LTCH 69 of the 360 awardees are not providers (e.g., Remedy Partners) HDG 2015 Source: CMS 31 2015 Health Dimensions Group 16
Arkansas BPCI Applicants: Slow Movement to Risk So Far Model Organization Name Convener City 2 2 2 Washington Regional Medical Center St. Vincent Infirmary Medical Center Sparks Regional Medical Center 2 OrthoArkansas, P.A. # of DRGs Considered Unknown Fayetteville 48 Catholic Health Initiatives Little Rock 14 NaviHealth, Inc. Fort Smith 48 Signature Medical Group, Inc. Little Rock 15 2 St. Bernards Hospital, Inc. Geisinger Clinic Jonesboro 48 2 White River Health System Premier, Inc. Batesville 48 3 Chenal Healthcare, LLC 3 3 Premier Health and Rehabilitation, LLC The Woods of Monticello Health and Rehabilitation, LLC Remedy BPCI Partners, LLC Little Rock 48 Mid-Atlantic Health North Little Care, Mid-Atlantic Rock Health Care 48 Premier Health & Rehabilitation, LLC, Mid- Monticello 48 Atlantic Health Care Actually Moved into Risk as of July 1, 2015 Major joint replacement of lower extremity HDG 2015 Source: CMS BPCI Analytic File, October 2015 caution: data is error-prone 32 Bundled Payment Components Defined population Defined period of time Quality of care Target price HDG 2015 33 2015 Health Dimensions Group 17
Defined Population Beneficiary must be eligible for Part A and be enrolled in Part B Beneficiary must not: Qualify for Medicare solely through ESRD Be enrolled in any managed care plan Beneficiary must have had an applicable anchor inpatient hospital admission Beneficiaries must be informed about bundling and may opt out of care redesign activities, but will still be included in bundling reconciliations if otherwise eligible HDG 2015 34 Bundlers Must Select Diagnostic Families in Advance (48 Possible) Diagnostic Families (aka Clinical Episodes) Percentage of At-Risk Model 2 Bundlers Major joint replacement of the lower extremity 86% Congestive heart failure 34% Chronic obstructive pulmonary disease, bronchitis, asthma 25% Simple pneumonia and respiratory infections 21% Hip and femur procedures except major joint 18% Revision of the hip or knee 16% Coronary artery bypass graft 15% Acute myocardial infarction 15% Lower extremity and humerus procedure except hip, foot, femur 13% Double joint replacement of the lower extremity 12% Removal of orthopedic devices 12% Stroke 12% Sepsis 12% These percentages will likely change as more bundlers move to risk in 2015 HDG 2015 35 2015 Health Dimensions Group 18
Services Included in Target Prices and Performance Period Claims Inpatient hospital services (Model 2 only) Post-acute care services SNF HHA IRF LTACH Inpatient hospital readmission services Physicians services DME Clinical laboratory services Outpatient services Part B drugs Exclusions for: Unrelated conditions for each diagnostic condition Part D drugs Hospice claims HDG 2015 36 Key Points About Included/Excluded Services Definition of related services to anchor hospital admission is broad Onset of cancer or car accident are typical examples of unrelated conditions Even though hospice services are not included in bundling, advance care planning, palliative care, and hospice services are important elements of care redesign Effect of extremely costly episodes is adjusted downward through an outlier mechanism HDG 2015 37 2015 Health Dimensions Group 19
Target Price Based on Bundler s Own Historical Experience Each bundler s episodic target prices for a diagnostic family derived from their own episodic experience from July 1, 2009, to June 30, 2012: Episodes with low volumes are based on statewide averages, in whole or in part Target prices are inflated to the performance period by trend factors based on national average growth rates that reflect changes in prices and care practices Differences in wages over time are factored in to the target prices Target prices are discounted by 2% to 3% depending on the model type and episode length Use of national average growth rates to inflate target prices means that even favorable prices may erode over time, rewarding early adopters HDG 2015 38 Target Price for Each Diagnosis Is Compared to Actual Expenditures Reconciliations are quarterly and start 6 months after end of episode; adjusted up to 3 additional quarters as additional claims filed Target Price Quarter 1, Patient 1 Quarter 1, Patient 2 Quarter 1 Total Reconciliation $19,000 (base period costs) less CMS 3% discount Actual fee-for-service spending during episode Amount to be paid back to CMS at reconciliation Actual fee-for-service spending during episode Amount of gain to bundler at reconciliation Net amount to be gained by/(paid back from) bundler $18,400 $20,000 ($1,600) $15,000 $3,400 $1,800 HDG 2015 39 2015 Health Dimensions Group 20
Important Bundling Details Risk (and opportunity) can be mitigated for bundlers by the selection of more conservative risk tracks and through the outlier mechanism When multiple bundlers are operating in the same market for the same diagnostic categories, CMS has precedence rules to determine pecking order CMS Precedence Rules HDG 2015 40 Waivers Under Bundling May Offer Opportunities for Post-acute Providers Modification of three-day qualifying stay for Medicare SNF Allows SNF coverage for one- or two-day prior acute stay for Model 2 bundlers Post-discharge home visits Allows billable visits monthly throughout episode which can be delegated by physicians to other clinicians Telehealth Waives geographic restrictions on telehealth providing that all other Medicare coverage requirements apply HDG 2015 41 2015 Health Dimensions Group 21
CMS Permits Medicare Beneficiary to Be in Bundling and ACO at Same Time CMS policy is to only pay once for savings, so it has decided to recoup duplicate savings from the bundler when those savings have been achieved for a beneficiary also enrolled in an ACO that has achieved its savings target Duplicate recovery from bundlers is modest and generally should not dissuade bundlers from developing win-win relationships with ACOs Bundlers can be instrumental in helping ACOs achieve their shared savings targets HDG 2015 42 Gainsharing in Bundling Context: Expansion Will Take Time Gainsharing in a bundling context is executed through waivers and may become more widespread as bundling grows Policy on gainsharing is rapidly evolving as alternate payment approaches flourish In general, gainsharing arrangements must: Have strong quality component, preferably using evidence-based guidelines Not be created to directly or indirectly induce referrals Not harm the beneficiary October 3, 2014 Federal Register HDG 2015 43 2015 Health Dimensions Group 22
Early Results: Model 2 Bundling Is Changing PAC Relationships & Use Model 2 hospitals and PGPs forming new partnerships with PAC providers by: Discussing quality with PAC providers likely to receive their patients, even if providers not contractually involved in bundling Identifying higher quality providers for preferred list, although they must maintain patient choice Use of institutional PAC (SNF, LTACH, IRF) after the acute care stay fell from 66% to 47% of episodes; use of HHA after acute care stayed about the same Total spending for episodes with PAC fell in comparison to base period by more than comparison group (episodes without PAC stayed about the same) Source: CMS Bundled Payments for Care Improvement (BPCI) Initiative Models 2-4: Year 1 Evaluation & Monitoring HDG 2015 Annual Report, The Lewin Group, February 2015 44 Comprehensive Care for Joint Replacement Model (CCJR) HDG 2015 2015 Health Dimensions Group 23
New CMS Bundling Program: Comprehensive Care for Joint Replacement Model Announced in July for January 1, 2016, implementation Still only a proposal, but example of how fast things can change Would be mandatory program in 75 randomly selected metropolitan statistical areas (MSAs) Similar to Model 2 (hospitalinitiated) bundling, except: Limited to joint replacement (MS-DRGs 469 & 470) Mandatory participation Target price refinements Five-year program; no downside risk until second year (2017) HDG 2015 46 CCJR Is Proposed for 75 Regions Nationally CMS selected 75 CCJR regions according to a formula which factored in opportunity to reduce joint replacement spending and presence of BPCI Arkansas has two regions MSA Title Hot Springs, AR Memphis, TN-MS-AR Counties Garland County Crittenden County HDG 2015 47 2015 Health Dimensions Group 24
Comparison Between Model 2 BPCI & CCJR Domain Model 2 BPCI CCJR Participation Voluntary Mandatory Scope Up to 48 MS-DRG Families Length of bundle 30, 60, or 90 days 90 days Target price Own historical data (2009 2012 trended) Reconciliation Quarterly Annual Joint replacement only (MS-DRGs 469 & 470) Phase-in to trended regional prices Gainsharing Allowed under waivers Allowed under waivers Hospice Excluded Included Three-day SNF Waiver Majority of SNFs must be rated 3 stars or higher SNFs must be rated 3 stars or higher HDG 2015 48 Unlike BPCI, CCJR Payment Is Directly Tied to Quality Four metrics of interest to hospitals Metric Weight 30-day readmission rate 20% Hospital complication rate 40% HCAPS survey 30% Patient-reported outcomes (voluntary) 10% Hospital must score over 30 th percentile to be eligible for reconciliation payments HDG 2015 49 2015 Health Dimensions Group 25
First Setting After Joint Replacement Shows Opportunities & Challenges First Post-acute Setting After Joint Replacement Setting Joint Replacement with Comorbidity (DRG 469) Count 90-day Episode Spending Joint Replacement without Comorbidity (DRG 470) Count 90-day Episode Spending Both DRG 469 & 470 Count 90-day Episode Spending Community 556 $25,429 34,626 $16,172 35,182 $16,318 HHA 2,129 $28,297 104,208 $19,610 106,337 $19,784 Hospice 8 $41,490 28 $29,460 36 $32,133 IRF 2,656 $54,053 26,317 $36,351 28,973 $37,974 LTCH 158 $85,417 115 $49,891 273 $70,452 Other Inpatient 28 $48,485 200 $29,475 228 $31,809 SNF 8,321 $50,248 104,362 $31,131 112,683 $32,543 Readmission 344 $50,795 4,823 $29,493 5,167 $30,911 Total/Average 14,200 $47,093 274,679 $25,352 288,879 $26,421 Source: Dobson DaVanzo analysis of 90-day joint replacement episodes from Medicare Limited Data Set for 2013 HDG 2015 50 First Setting After Joint Replacement Surgery Drives Episode Costs Medicare Spending for 90-day Episodes by First Setting after Hospitalization $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 Joint Replacement with Comorbidity (DRG 469) Joint Replacement without Comorbidity (DRG 470) Source: Dobson DaVanzo analysis of Medicare Limited Data Set, 2011-2013 HDG 2015 51 2015 Health Dimensions Group 26
CCJR Will Likely Drive Post-Acute Care to Lower Cost Settings SNF & IRF Care Home Health Outpatient Therapy HDG 2015 52 Joint Replacement Episode Costs Can Vary by Many Factors Total Episode Spending by Type of Surgery, Age, Gender, and Comorbidities Source: American Hospital Association Comment Letter to CMS, CCJR Proposed Rule, September 8, 2015 HDG 2015 53 2015 Health Dimensions Group 27
The Importance of Care Redesign HDG 2015 Care Redesign Is Integral to Bundling Care Redesign Gain and Risk Sharing Reinforces Informs Quality and Performance Measurement Data Sharing Supports all Activities and Exchanges HDG 2015 Source: CMS, Contracting for Bundled Payment, 2011 55 2015 Health Dimensions Group 28
PAC Provider Bundling Care Redesign Strategies Palliative Care Telehealth Care Coordination Role Health Coach Certification Care Pathways INTERACT Home Health INTERACT PCP/NP On-site Access Risk- Stratification Evidence-Based Care Practices Patient Education Teach-Back HDG 2015 56 Care Coordination Throughout Episode Is a Consistent Strategy Manage transitions Between acute care and PAC Coordination with primary care and specialty care Reinforce teaching and self-care Assure medication reconciliation at every transition Assure appropriate follow-up HDG 2015 57 2015 Health Dimensions Group 29
Telehealth: An Emerging Strategy in Care Redesign OIG waivers allow bundlers to provide beneficiary with incentivizing services and equipment during the episode if related to care redesign HDG 2015 58 Bundlers Need to Identify Who Is Most at Risk for Adverse Outcomes Stable Rising Risk High Risk Goal: Support Goal: Early Intervention Goal: Stabilize HDG 2015 59 2015 Health Dimensions Group 30
Example of Simple Risk Stratification Form HDG 2015 60 Comorbidities & Function Drive Readmission Risk for Joint Cases 90-day Readmission Risk More than Doubles for Patients with Comorbidities and Functional Impairment When First Setting After Joint Replacement Is SNF 24% 18% 16% 10% Low Baseline Functional Impairment High Baseline Functional Impairment MS-DRG 469: Major joint replacement or reattachment of lower extremity with major complication or comorbidity MS-DRG 470: Major joint replacement or reattachment of lower extremity without major complication or comorbidity Source: Dobson DaVanzo analysis of Medicare Limited Data Set, 7/2009 6/2012 HDG 2015 61 2015 Health Dimensions Group 31
Identify Bundlers and Approach Them with Your Value Proposition Identify all hospitals and physician group practices in your local market & which diagnoses are being bundled (at risk) or subject to reimbursement penalties and put forward your value proposition in three key areas: Ability to Manage Readmissions Capabilities to manage the patient aggressively in situ, including telemonitoring and medical management strategies Patient Outcomes (Versus Inputs) Relative to Peers Performance better than your peer group on key outcomes such as functional status relative to therapy provided Episodic Management Capabilities Capacity to manage seamlessly across multiple settings and effectively communicate with the at-risk entity HDG 2015 62 Summing It Up: Transition to Bundling Requires Careful Navigation Requires real-time knowledge of who is in a bundle, ACO, Medicare Advantage, or FFS upon admission and Broad-based application of care redesign and targeted interventions to those who are at higher risk of poor outcome all the way through the episode Knowledge of pertinent quality metrics of downstream providers in comparison to peers is crucial HDG 2015 63 2015 Health Dimensions Group 32
Value-Based Transformation Checklist Become highly knowledgeable about value-based payment transformation occurring in your market Obtain data and develop analytic capacity to support articulation of your organization s value proposition Undergo clinical and operational transformation by implementing standardized care pathways and protocols for reduction of avoidable hospitalizations Engage referring health systems and at-risk payers Define path to implement VBP arrangements for the majority of your payers HDG 2015 64 Success Will Be Defined by Delivering Quality Outcomes and Value Presentation Title HDG 2015 65 2015 Health Dimensions Group 33
Thank You! Any Additional Questions? HDG 2015 For More Information Tom Stitt, CPA, CHFP VP, Finance and Reimbursement Health Dimensions Group 763.225.8639 773.502.5883 cell toms@hdgi1.com Brian Ellsworth, MA Director, Payment Transformation Health Dimensions Group 860.874.6169 cell bellsworth@hdgi1.com www.healthdimensionsgroup.com @HDGConsulting https://www.facebook.com/healthdimensionsgroup http://www.linkedin.com/company/health-dimensions-group HDG 2015 67 2015 Health Dimensions Group 34
Presentation Title HDG 2015 68 2015 Health Dimensions Group 35