Financial Planning, Implementation, and Control to Support Payment and Care Delivery Reform Insights for Safety Net Providers William Riley, PhD Director, National Safety Net Advancement Center J. Mac McCullough, PhD, MPH Deputy Director Ajay Raikhelkar, MS Project Manger Kailey Love, MS Project Manager
About SNAC: The National Safety Net Advancement Center (SNAC) aims to transform the ability of U.S. safety net organizations to respond to payment and care delivery reform efforts in the fast evolving health care financial and delivery environment. Funded by the Robert Wood Johnson Foundation (RWJF), SNAC provides three resources: 1) an online, curated resource center (http://safetynet.asu.edu); 2) support for payment reform projects through grantmaking; and 3) scholarships to more than 50 provider organizations for technical assistance in virtual learning collaboratives (VLCs). The grant and technical assistance strategies are centered on six critical and timely issues in payment and care delivery reform: Clinical Care Team Transformation Strategies; Clinical Integration Across Settings; Financial Planning, Implementation and Control; Network Structure, Governance, & Operations; Patient Attribution and Activation; and Risk Management and Adjustment Strategies. Please direct any questions or inquiries to SafetyNet@asu.edu. About the Financial Planning, Implementation, and Control Virtual Learning Collaborative (VLC): The VLC curriculum provided participants an overview of the financial skill sets necessary to face the challenges posed by payment and payment delivery reform. The three-month Financial Planning, Implementation, and Control VLC focused on one of six critical and timely issues in payment and care delivery reform identified by SNAC. This three-month VLC included representatives from 8 safety net organizations including 6 community health centers, 1 community mental health center, and 1 critical access hospital. Please see the list of VLC participants in Appendix A. VLC participants specifically focused on gaining competency in establishing and sustaining successful financial management under value-based payment systems. Major topics included budgeting under alternative payment methodologies, evaluating risk corridors, anticipating possible financial outcomes associated with at-risk financial compensation terms, and staffing and budgeting for successful care team delivery models. Please see session-bysession learning objectives in Appendix B. A main focus of the VLC was helping safety net providers to establish a sound value proposition to advance payment and care delivery reform efforts. As the participants learned during the VLC, safety net providers value proposition can be generally expressed as: The VLC was led by payment and delivery system reform experts at Starling Advisors (starlingadvisors.com) Lessons Learned by VLC Participants: VLC participants focused on selecting which value based contract methodologies are most appropriate for their organizations. This is a fundamental determination that safety net providers must make after taking careful stock of their value proposition. The right decision can springboard an organization towards success in payment and care delivery reform. Each organization described the associated investments and challenges in developing value based contracts in order to meet future care delivery needs. The experiences and learnings from five selected VLC participants are summarized here: Long Island FQHC, Inc., a federally qualified health center in New York, worked with VLC technical assistance experts to identify the best value-based payment model for their needs: shared savings model with upside-only risk. The VLC identified a number of competencies important for any FQHC working towards advanced value based payment, including reliable access to data and a thorough understanding of cost and utilization data. During the VLC, Long Island FQHC used data to risk stratify patients and identify high-utilizers. The VLC helped Long island FQHC to learn the importance of setting priorities and taking stock of resources and assessing organizational priorities, in order to
determine their optimal payment model for future value-based contracting initiatives. The North Carolina Office of Rural Health (ORH), a group representing community health centers in North Carolina, utilized VLC content to educate and mobilize rural practice sites on cutting-edge payment reform topics ranging from MACRA legislation, to ACOs, risk models, and the need for professional services. ORH leveraged the content delivered by the VLC technical assistance experts to embark on developing shared services across rural safety net provider sites. As covered during the VLC sessions, this entails obtaining stakeholder buy-in, identifying capacity for shared access to actuarial and legal services to establish risk levels, developing contracts, and more. ORH now plans to hold monthly conference calls to discuss delivery system changes in preparedness for payment reform. Maine Primary Care Association (Maine PCA), an association of federally qualified health centers, is looking to improve population health management capacities. The VLC helped the association explore priorities for improved population health management including a shift to team-centric practice, intra- and inter-organizational information sharing, and effective risk stratification. Throughout the VLC, Maine PCA focused on the foundational importance of building an organizational culture attuned to payment reform. While there may not be money specifically available for culture change, the VLC helped Maine PCA to identify areas that can be funded and addressed, such as modernizing facilities and data infrastructure and investing in key staff. The Foundation for Healthy Communities New Hampshire Rural Health Coalition, a critical access hospital network, is focused on choosing the ideal savings model for its network members. One of the network hospitals is working towards incorporating essential data capture and reporting elements into its IT infrastructure, but because of the range of data resources required to do so faces financial challenges. The VLC helped to identify the financial implications of utilizing proper IT as one of the issues that need to be addressed when the entire Foundation for Health Communities New Hampshire Rural Health Coalition chooses the ideal savings model. The VLC also outlined core strategies that the critical access hospital network needs to address to select the proper savings model and be successful at payment and care delivery reform. These strategies include effectively risk stratifying their patient population, improving revenue cycles, developing all necessary clinical programming, and building managerial competencies. Other critical access hospital networks may face similar challenges and could benefit from undertaking these planning processes to accelerate successful payment and care delivery reforms. Piedmont Health Services Inc., a community health center in North Carolina, used the value equation discussed throughout the VLC to determine their organizational priorities for payment and care delivery reform. For example, additional costs to Piedmont as a result of pursuing value-based payments may involve infrastructure (IT, space business analytics, etc.) or personnel (e.g., if overtime is needed). There is also an apparent need to deploy risk adjustment methods, which requires more advanced IT systems to support risk stratification and accurate patient attribution models. Piedmont used the VLC sessions to build a plan to determine and obtain the personnel skills/staff necessary for new payment models phase things in at one clinic/site, assess skills and knowledge needed, refine staffing, then expand. The barriers facing Piedmont and other similar community health centers working on value based payment include finding cash/financing for upfront costs for new resources, limited existing data infrastructure, and challenges in understanding costs of externally-provided services. Learn Along with SNAC Grantee Lutheran Social Services of Illinois SNAC grantee Lutheran Social Services of Illinois (LSSI) is a safety net behavioral health provider serving 28,000 patients per year. At the request of managed care organizations, LSSI developed a proposed rate structure for valuebased contracts based on actual organizational staffing, operational, and infrastructure costs while also budgeting internally for variable risks and cash flow. During this VLC, LSSI received assistance to prepare and present their value proposition for advancing new payment models. LSSI identified shared savings and global payment models as the most relevant for their needs. Under a shared savings or global payment model, LSSI is able to move past the limitations of a fee-for-service model and include the social determinants of health in support services through providing a broad array of community based supports that stabilize clients, connect them to care, and address barriers, lowering the number of emergency room visits and inpatient treatment days. LSSI emphasizes measurable outcomes, such as helping managed care organization to meet their required behavioral health HEDIS metrics for follow-up appointments after an inpatient psychiatric stay, and behavioral health-related ED visits and hospitalizations. By identifying and presenting these outcomes as value areas, LSSI was better able to demonstrate the win of new payment model investments such as are team expansion, provider network growth, and data management system needs.
What do these learnings mean for safety net organizations? With the expanded set of financial knowledge and skills that payment and care delivery reform require, many safety net organizations could benefit from the concepts, skills, and tools covered during SNAC s Financial Planning, Implementation, and Control VLC. Specifically, safety net providers will be pushed by payment reform to develop a roadmap that incorporates the ability to (1) manage financial performance using new data and key performance indicators, (2) absorb financial risks, and (3) provide sustainable, coordinated care under new delivery models. Our VLC covered these topics and more, culminating in the preparation of participants customized value proposition where each organization carefully weighed: Ideal Payment Models: ranging from fee-for-service to shared savings, partial capitation, full capitation, Value Areas: Outcomes, internal costs, costs for others, risks, and scaling issues Priority Investments: based on these values areas, are there needs in facilities, health informatics, clinical staff, non-clinical staff, or other areas? Financial Barriers & mitigation strategies: what financial barriers are there to making the necessary investments and how can each organization overcome these challenges? Safety net leaders should be confident that these guiding principles have served a wide-ranging array of safety net organizations as they embark on the financial planning necessary to make payment reform work. By completing advance work focused on these principles, managers will be able to more accurately and confidently identify the valuebased payment mechanisms and strategies that will be necessary for their specific context. Medical directors and network managers will be essential for identifying many of the specific elements necessary for filling out the value proposition and thus identifying priorities for financial planning, implementation and control. This roadmap has been shown to be adaptable to and effective in a number of settings. Safety net organizations interested in building competency in financial planning, implementation, and control in pursuit of payment reform may face similar challenges and opportunities. If interested in learning greater depth about these and other financial topics, please contact SNAC for connection to a peer organization who can share their experiences with you. In addition to free consultation and connections to our VLC participants and grantees, a variety of networkspecific resources are available online. SNAC has compiled these resources on our webpage for your easy reference: http://safetynet.asu.edu/financial-planning-implementation-and-control/ Get involved with future SNAC learning opportunities SNAC is hosting six virtual learning collaboratives to accelerate payment and care delivery reform in the safety net. Participation is by application only. Please contact us at SafetyNet@asu.edu for more information or to be added to our waiting list for a future VLC. Patient Attribution and Activation (January-April 2017) Risk Management and Adjustment Strategies (January-April 2017) Completed: Clinical Integration Across Settings (September-December 2016) Completed: Financial Planning, Implementation, and Control (September-December 2016) Completed: Clinical Care Team Transformation Strategies (June-August 2016) Completed: Network Structure, Governance, and Operations (June-August 2016) ACKNOWLEDGEMENTS The Safety Net Advancement Center is supported by the Robert Wood Johnson Foundation. For More Information Please visit our online VLC home: http://safetynet.asu.edu/vlc/ or contact us directly: SafetyNet@asu.edu
Appendix A: Financial Planning, Implementation, and Control Virtual Learning Collaborative Participants Foundation for Healthy Communities NH Rural NH Critical Access Hospital Health Coalition Long Island FQHC Inc. NY Community Health Center Lutheran Social Services of Illinois IL Community Health Center Maine Primary Care Association ME Community Health Center Mary s Center for Maternal and Child Care, Inc. DC Community Health Center North Carolina DHHS Office of Rural Health NC Community Health Center Piedmont Health Services, Inc. NC Community Health Center Recovery Resources OH Community Mental Health Center If you are interested in making a connection with a VLC participant, please contact us at: SafetyNet@asu.edu
Appendix B: Financial Planning, Implementation, and Control Virtual Learning Collaborative Curriculum See materials at: https://safetynet.asu.edu/vlc/financialplanning/ Learning Collaborative Cohort Introductions Shifting Landscape with Reform Value Based Payment Models Goals of Payment Reform Pilots and Initiatives: MIPS, APMs, DSRIP, Hospital Payment Redesign Value Based Reimbursement Financial Framework Skill Set #1: Defining Value Skill Set #2: Forecasting New Payment Models Begin Discussing Final Presentations of each organization Case Study: Payment Drives Redesign Skill Set #3: Managing Finances under Value Based Reimbursements Skill Set #4: Effective Budgeting for Value Based Reimbursement: Discuss the Priority Capital and Infrastructure Investments under Value based Payments, Identify the Types of Costs, and Best Practices in Leveraging Costs and Expenses Presentation of Case Study: Review of Most Common Models of Emerging Payment Change for Safety Net Providers Relative Risks and Benefits of These Models Group Discussion and Share Out Group presentations from all participant organizations