CPAs & ADVISORS experience support // ADVANCED PAYMENT MODELS: CJR Andy M. Williams Partner BKD Eric M. Rogers Managing Consultant BKD Will McLeod VP of Patient Services McLeod Health Emily Adams Associate VP of Patient Services McLeod Health
CMS ahead of schedule THE CHANGING HEALTH CARE MARKET For the hospital CEO or CFO out there who says, I m doing really well in fee-for-service so I m just going to stick with it and it s going to be OK, eventually it will not be OK, and I actually predict it will not be OK in a much shorter time frame than they might imagine. Patrick Conway, MD, Deputy Admin. and Leader of CMMI- CMS 100 90 80 70 FFS 60 50 40 30 20 APMs 10 0 2011 2015 2016 2018 2 // experience support
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 Financial Alignment 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 Next Generation 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 1000 900 800 700 600 500 400 300 200 100 0 Participants in CMMI Payment Models Source: CMMI Website 4 // experience support
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
PREPARING FOR BUNDLED PAYMENTS From 67 MSAs to ALL MSAs From hips and knees to: COPD CHF AMI Pneumonia 7
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 8
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 9
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 10
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 11
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 12
SOUTH ATLANTIC REGION: MEAN EPISODE PAYMENTS $60,000 $56,717 $50,000 $40,000 $40,495 $41,951 $30,000 $23,547 $20,000 $10,000 $0 DRG 469 non-fracture DRG 469 fracture DRG 470 non-fracture DRG 470 fracture 13
TARGET PRICE CALCULATION: DRG 470 WITHOUT FRACTURE $25,000 $20,000 $23,547 $18,500 +/-? W.I. DSH IME $ Target $15,000 $10,000 1/3 2/3 $5,000 Regional Average Sample Hospital Target Year 1 & 2 14 // experience support
UPSIDE AND DOWNSIDE FINANCIAL MODELING 0-20% Stop Loss $4,750,000 $5,250,000 Example Reconciliation Target 5-20% Stop Gain 200 Total Episodes Episode # 324 of 359 $63,460 $53,516 (2X SD) $25,989 15 // experience support
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 Total Hip & Total Knee Arthroplasty (THA/TKA) data submission of patient reported outcomes 16
QUALITY POINTS THA/TKA Complications 90 th 10.00 8.00 80 th and < 90 th 9.25 7.40 70 th and < 80 th 8.50 6.80 60 th and < 70 th 7.75 6.20 50 th and < 60 th 7.00 5.60 40 th and < 50 th 6.25 5.00 30 th and < 40 th 5.50 4.40 <30 th 0.00 0.00 3 Decile Improvement 1.00 0.80 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: 6.0 13.2 2% discount Excellent: >13.2 1.5% discount 17
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 18
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 19
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 20
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 21
DATA ANALYTICS 22 // experience support
Medicare s Episode Payments Patient Volume by Age SPENDING BY AGE $40,000 160 $35,000 140 $30,000 120 $25,000 100 $20,000 80 $15,000 60 $10,000 40 $5,000 20 $0 0-60 61-65 66-70 71-75 76-80 81-85 85-90 91-95 0 23 // experience support
EPISODE PAYMENT DISTRIBUTION $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $- Inpatient Outpatient IP Rehab/Read Home Health SNF Physician DME 24 // experience support
FIRST DISCHARGE SETTING: DRG 470 Inpatient Rehab, Hospice, 0.5% 0.9% Home, 9.5% Hospital, 0.5% HHA, 30.8% HH SNF IRF $2,632 $8,916 $17,658 $17,481 $26,186 $34,690 Other, 0.5% SNF, 57.3% 25 // experience support
MANAGING OUTLIERS Discharged Home/Home Health Discharged SNF/ IRF 26 // experience support
POST-ACUTE CARE PROVIDERS $8,231 Average SNF payment for Hospital X patients $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $- Avg Payments by SNF 70 12 10 9 SNF A SNF B SNF C SNF D 27 // experience support
CASE STUDY 28 // experience support
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GOVERNANCE AND OVERSIGHT Commitment to bundled payments C-Suite Physicians Finance Dept Steering Committee OE and CE Developing internal capabilities for future bundles 30 // experience support
DATA ANALYTICS Importance of beneficiary-level claims analytics Identification and management of outlier episodes Physician alignment Post-acute care collaborator identification and accountability Review of current discharge trends Establishing benchmarks and best practices Coding and documentation Predicting payments from historical data 31 // experience support
GAINSHARING AND COLLABORATORS Gainsharing discussions Physicians Post-acute care providers Post-acute utilization, collaborators and reimbursement methodologies: The cliff McLeod home health Skilled nursing facilities Inpatient rehabilitation Home with outpatient 32 // experience support
CARE REDESIGN CJR and the Lean process Change Events and A3 Thinking RIE and VSM Prehab Existing PAT Risk assessment tools and validation CJR patient identification Acuity regression leakage Joint Coordinator Discharge process Discharge matrix tool Preferred providers 33 // experience support
COLLABORATORS Skilled Nursing Facilities Scorecards SNF Seminar Surveys Onsite visits Communication Tracking performance 34 // experience support
MONITORING PROGRESS Total hip and knee dashboards for internal performance Discharge trends Physician performance CJR quarterly data and key performance indicators for success Volumes by DRG and fracture status Average episode payments Longitudinal view of provider payments Outlier management Post-acute provider monitoring (LOS, payments) 35 // experience support
MANAGING RISK 36 // experience support
THANK YOU FOR MORE INFORMATION // For a complete list of our offices and subsidiaries, visit bkd.com or contact: Andy M. Williams CPA // Partner awilliams@bkd.com // 417.865.8701 Eric M. Rogers M.Ed. RT(R) // Managing Consultant erogers@bkd.com // 417.865.8701 37 // experience support