Kate Goodrich, MD MHS Director, Quality Measurement and Health Assessment Group, CMS

Kate Goodrich, MD MHS Director, Quality Measurement and Health Assessment Group, CMS

CMS support of Health Care Delivery System Reform (DSR) will result in better care, smarter spending, and healthier people Historical state Key characteristics Producer-centered Incentives for volume Unsustainable Fragmented Care Systems and Policies Fee-For-Service Payment Systems Public and private sectors Evolving future state Key characteristics Patient-centered Incentives for outcomes Sustainable Coordinated care Systems and Policies Value-based purchasing Accountable Care Organizations Episode-based payments Medical Homes Quality/cost transparency

CMS has adopted a framework that categorizes payment to providers Category 1: Fee for Service No Link to Value Category : Fee for Service Link to Value Category 3: Alternative Payment Models Built on Fee-for-Service Architecture Category 4: Population-based Payment Description Payments are based on volume of services and not linked to quality or efficiency At least a portion of payments vary based on the quality and/or efficiency of health care delivery Some payment is linked to the effective management of a population or an episode of care Payments still triggered by delivery of services, but opportunities for shared savings or -sided risk Payment is not directly triggered by service delivery so volume is not linked to payment Clinicians and organizations are paid and responsible for the care of a beneficiary for a long period (e.g., 1 year) Medicare examples Limited in Medicare feefor-service Majority of Medicare payments now are linked to quality Hospital valuebased purchasing Physician Value- Based Modifier Readmissions / Hospital Acquired Conditions Reduction Program Accountable care organization Medical homes Bundled payments Comprehensive primary Care initiative Comprehensive ESRD Medicare-Medicaid Financial Alignment Initiative Fee-For- Service Model Eligible Pioneer accountable care organizations in years 3-5 Maryland hospitals Source: Rajkumar R, Conway PH, Tavenner M. CMS engaging multiple payers in payment reform. JAMA 014; 311: 1967-8.

Delivery System Reform requires focusing on the way we pay providers, deliver care, and distribute information Improving the way providers are incentivized, the way care is delivered, and the way information is distributed will help provide better care at lower cost across the health care system. Focus Areas Pay Providers Description Promote value-based payment systems Test new alternative payment models Increase linkage of Medicaid, Medicare FFS, and other payments to value Bring proven payment models to scale Encourage the integration and coordination of clinical care services Deliver Care Improve population health Promote patient engagement through shared decision making Distribute Information Create transparency on cost and quality information Bring electronic health information to the point of care for meaningful use Source: Burwell SM. Setting Value-Based Payment Goals HHS Efforts to Improve U.S. Health Care. NEJM 015 Jan 6; published online first.

During January 015, HHS announced goals for value-based payments within the Medicare FFS system Goals Goal 1: 30% of Medicare payments are tied to quality or value through alternative payment models (categories 3-4) by the end of 016, and 50% by the end of 018 Goal : 85% of all Medicare fee-for-service payments are tied to quality or value (categories -4) by the end of 016, and 90% by the end of 018 Purpose Stakeholders Next steps Set internal goals for HHS Invite private sector payers to match or exceed HHS goals Consumers Businesses Payers Providers State partners Testing of new models and expansion of existing models will be critical to reaching incentive goals Creation of a Health Care Payment Learning and Action Network to align incentives for payers

Target percentage of payments in FFS linked to quality and alternative payment models by 016 and 018 Alternative payment models (Categories 3-4) FFS linked to quality (Categories -4) All Medicare FFS (Categories 1-4) 011 014 016 018 0% % 30% 50% 68% 85% 85% 90% Historical Performance Goals

CMS will achieve Goal 1 through alternative payment models where providers are accountable for both cost and quality Major APM Categories 014 015 016 017 018 Accountable Care Organizations Medicare Shared Savings Program ACO Pioneer ACO Comprehensive ESRD Care Model Bundled Payments Bundled Payment for Care Improvement Specialty Care Models Advanced Primary Care Comprehensive Primary Care Multi-payer Advanced Primary Care Practice Other Models Maryland All-Payer Hospital Payments ESRD Prospective Payment System CMS will continue to test new models and will consider expanding existing models

CMS will reach Goal through more linkage of FFS payments to quality or value Hospitals, % of FFS payment at risk Readmissions Reduction Program HVBP (Hospital Valuebased Purchasing) IQR/MU (Inpatient Quality Reporting / Meaningful Use) HAC (Hospital-Acquired Conditions) 6.75 1.75 1 Performance period 014 (payment FY16) 8 3 3 1 Performance period 015 (FY17) 8 1 Performance period 016 (FY18) Physician / Clinician, % of FFS payment at risk 9 9 Physician VBM (Value- Based modifier) 1 MU (Electronic Health Record Meaningful Use) PQRS (Physician Quality Reporting System) 6 4 3 4 3 014 Performance period (payment FY16) 015 Performance period (payment FY17) 016 Performance period (payment FY18) 3

CMS is aligning with private sector and states to drive delivery system reform CMS Strategies for Aligning with Private Sector Convening Stakeholders Convened payers in 7 markets in CPCI Convening payers, providers, employers, consumers, and public partners for the Health Care Payment Learning and Action Network Incentivizing Providers In Pioneer ACOs, agreements required Pioneers to have 50% of business in valuebased contracts by the end of the second program year Partnering with States The State Innovation Model Initiative funds testing awards and model design awards for states implementing comprehensive delivery system reform The Maryland All-Payer Model tests the effectiveness of an all-payer rate system for hospital payments

CMS Quality Strategy BETTER CARE BETTER HEALTH FOR POPULATIONS SMARTER SPENDING

The Six Goals of the CMS Quality Strategy 1 Make care safer by reducing harm caused in the delivery of care Strengthen person and family engagement as partners in their care 3 4 Promote effective communication and coordination of care Promote effective prevention and treatment of chronic disease 5 Work with communities to promote healthy living 6 Make care affordable INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORIZED BY LAW: This information has not been publicly disclosed and may be privileged and confidential. It is for internal government use only and must not be disseminated, distributed, or copied to persons not authorized to receive the information. Unauthorized disclosure may result in prosecution to the full extent of the law.

Foundational Principles of the CMS Quality Strategy Eliminate Racial and Ethnic disparities Strengthen infrastructure and data systems Enable local innovations Foster learning organizations

CMS Quality Strategy http://www.cms.gov/medicare/quality- Initiatives-Patient-Assessment- Instruments/QualityInitiativesGenInfo/CMS- Quality-Strategy.html

How is CMS engaging patients in our work? MEASURE DEVELOPMENT PARTNERSHIP FOR PATIENTS

Patient Engagement in Measure Development CMS now requires inclusion of patients and consumers in all measure development activity For example, CMS funding a Network that will bring patient perspectives and expertise to meaningfully impact CMS projects for hospitals: New measure development Hospital Compare displays Star Ratings 15

Principles for Measure Development Measures should explicitly align with the CMS Quality Strategy and its goals and objectives Patient/caregiver input is equally important to provider input in the development of measures Develop measures meaningful to patients/caregivers and providers, focused on outcomes (including patient-reported outcomes), safety, patient experience, care coordination, appropriate use/efficiency, and cost Measures should address a performance gap where there is known variation in performance, not just a measure gap Monitor disparities and unintended consequences

Partnership for Patients Patient and Family Engagement (PFE) The Evolving Role of PFE

Partnership for Patients Strategy to Support Patient & Family Engagement 1. Authentically engage patients in the work and model best practices. Identify organizations that reflect best practices i. Vidant Health-NC ii. RARE Campaign-MN iii. Wexner Medical Center-OH iv. Many others 3. Replicate and spread effective practices 4. Track progress on PFE across 3700+ hospitals and increase transparency 5. Team with and support others involved in leading this work i. National Partnership for Women and Families, Institute for Patient and Family Centered Care, Institute of Medicine, Gordon & Betty Moore Foundation, many others ii. Support 36 patient advocates who are working with 7 HENs and 3714 iii. hospitals throughout the United States AHRQ s 7 Pillars Initiative, QIOs and other Federal Partners

PFE Metrics: Measuring Hospital Successes Planning Checklist Point of Care Governance Patient and Family Advisor on Board Shift Change Huddles/ Bedside Reporting PFAC or Representative on Quality Improvement Team PFE Leader or Functional Area Policy and Protocol

Life-Saving & Cost-Saving Impacts of Harm Reduction Work in 011, 01 & 013 17% Reduction in Measured HACs 1.3 Million Fewer Harms $1B in Associated Cost Savings 50,000 Estimated Reductions in Deaths

Contact Information Kate Goodrich, MD MHS Director, Quality Measurement and Health Assessment Group Center for Clinical Standards and Quality 410-786-7519 kate.goodrich@cms.hhs.gov 1