Sierra Health Foundation Getting Ready for Pay for Performance and the Future of CHCs

Sierra Health Foundation Getting Ready for Pay for Performance and the Future of CHCs June 22, 2016 Curt Degenfelder curt@degenfelderhealth.com 310-740-0960

Today s Agenda Understand what pay for performance is Dig into health center operations Look at key reporting metrics 1

The Triple Aim Total Cost of Care Improving Health of Populations Improving Patient Experience 2

Thinking About Pay For Performance (P4P) Pay = revenue Current P4P revenue is typically a small portion of a health center s revenue. How much does P4P need to be to move the needle? Current payments from managed care organizations and IPAs seem to be arbitrary and capricious 3

Identifying Timing of P4P Revenue HRSA quality bonus announced broadly before paid out; based on historical (CY UDS) data Managed care/ipa usually after a quarter/fical year for the managed care organization. Often based on total managed care organization profit, total cost care for health center patients, and/or quality Process based rewards: - Engagement for new patients - Follow up on inpatient - Appointment availability standards 4

Earning P4P Changing operations to earn performance based rewards Infrastructure - Personnel for quality and data management - EHR - IT infrastructure 5

Quality 6

HMO PROVIDES RECOMMENDED CARE What is HEDIS? PATIENTS RATE THEIR EXPERIENCE RATE THEIR HMO GETTING CARE EASILY HMO HELPS MEMBERS GET ANSWERS Click on plan name for plan s star ratings and information: Aetna Health of California, Inc. HMO PROVIDES RECOMMENDED CARE PATIENTS RATE HMO PATIENTS RATE ACCESS PATIENTS RATE SERVICE Two stars Three stars One star Three stars Anthem Blue Cross - HMO Three stars Three stars One star Three stars Blue Shield of California - HMO Three stars Three stars Two stars Three stars Cigna HMO Three stars Two stars One star Two stars Health Net of California, Inc. Three stars Three stars One star One star Kaiser Permanente - Northern California Four stars Three stars Three stars Two stars Kaiser Permanente - Southern California Four stars Three stars One star Three stars Sharp Health Plan Three stars Four stars One star Three stars UnitedHealthcare of California Three stars Three stars One star Two stars Western Health Advantage Three stars Three stars One star 7

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What is HEDIS? The Health Effectiveness Data and Information Set (HEDIS) is a measurement system developed by the National Committee for Quality Assurance (NCQA) used by health plans nationwide HEDIS focuses on process measures for an assigned patient population Generally, the source of data for Medicaid HEDIS is the MCO claims system. Thus MCO quality payments are likely to be based on HEDIS (not UDS) 10

HEDIS Medicaid Quality Measures Children immunization Adolescent immunization HPV for female adolescents Lead screening in children Breast cancer screening Cervical cancer screening Chlamydia screening Pharyngitis testing for children URI treatment for children Antibiotic avoidance adlt bronchitis Spirometry testing for COPD Pharmacotherapy mgmt of COPD Initiation & engagement for AOD Timeliness of prenatal & postpartum Frequency of adolescent care ED visits Follow up on ADHD meds Use of asthma meds Asthma med mgt Asthma medication ratio Cholesterol mgmt for CV conditions Beta blocker after heart attack Comprehensive diabetes care DMARD therapy Imaging studies for low back pain Antidepressant med mgmt MH hospitalization f/u Monitoring for persistent meds Adult access to preventive/ambulatory Child access to PCP Frequency of prenatal care Frequency of well child visits Annual dental visits Developmental screening

Methodology Numerator services from claims database. HEDIS criteria looks for specific CPT and ICD codes Denominator attributed patients (see explanation next page) meeting criteria for each measure Measures are not use rates, i.e. services per patient, but rather a measure of % of patients who received indicated service. Calculation is called administrative measure MCO may calculate hybrid measures, using chart reviews for certain measures. Hybrid measure performance is usually better than the administrative measure. However sampling methodology allows for limited chart review Not outcomes measures such as diabetic or hypertension control 12

UDS vs. HEDIS Sample Attributed Not Seen Timely Entry Into Prenatal Care Childhood Immunzation* UDS HEDIS UDS HEDIS Health Center A 11% 74% 48% 68% 1% Health Center B 11% 85% 66% 93% 0% Health Center C 12% 86% 60% 84% 0% Health Center D 9% 56% 53% 97% 1% Statewide Administrative 59% 4.7% Statewide Hybrid 64.7% *Combination of Dtap, IPV, MMR, HiB, HepB, VZV, PCV 13

UDS vs. HEDIS Sample Cervical Cancer Screening Asthma Pharm Therapy UDS HEDIS UDS HEDIS Health Center A 61% 47% 79% 84% Health Center B 43% 72% 90% 84% Health Center C 60% 66% 75% 86% Health Center D 70% 69% 91% 92% Statewide Administrative 66% 87%

Potential Points of Data Failure Provider not recording the service Provider not recording the service with code (chart only) Provider not using code required by HEDIS Provider not recording code in PM/EHR FQHC not billing/recording code on claims (for example PAP immunizations) Reported code not making it into MCO s system 15

Total Cost of Care

What Drives Total Cost of Care? SumOfPaid_Amount Cumulative Cost % of Total Count of Pts $ 1,536,800 $ 1,536,800 0.1719% 1 $ 585,072 $ 2,121,872 0.2374% 2 $ 564,305 $ 2,686,177 0.3005% 3 $ 502,359 $ 3,188,536 0.3567% 4 $ 480,759 $ 3,669,295 0.4105% 5 $ 461,517 $ 4,130,812 0.4621% 6 $ 441,076 $ 4,571,888 0.5115% 7 17

What Drives Total Cost of Care? SumOfPaid_Amount Cumulative Cost % of Total Count of Pts $ 3 $ 893,869,266 100.0000% 115,291 $ 2 $ 893,869,268 100.0000% 115,292 $ 2 $ 893,869,270 100.0000% 115,293 $ 2 $ 893,869,272 100.0000% 115,294 $ 1 $ 893,869,274 100.0000% 115,295 $ 1 $ 893,869,275 100.0000% 115,296 $ 1 $ 893,869,275 100.0000% 115,297 18

What Drives Total Cost of Care? Top (Costs): 10% 20% 30% $ 89,386,928 $ 178,773,855 $ 268,160,783 # of Pts: 422 1,234 2,570 % of Total Patients: 0.37% 1.07% 2.23% Range (High): $ 1,536,800 $ 151,691 $ 84,269 Range (Low): $ 151,777 $ 84,342 $ 54,665

What Drives Total Cost of Care? Top (Costly Pts): 10% 20% Everyone Else # of Pts: 11,539 23,078 92,311 % of Total Costs: 59.3% 75.1% 24.9% 20

Reducing Total Cost of Care 21

CHC Provider s Take on High Cost Patients There were 101 high cost patients. Of these, 25 are "not currently attributed" to this CHC. Of the 76 attributed patients, 14 were children, 62 adults. All of the 14 children were high need/intrinsically high cost - 2 with hemophilia (one with physical and sexual abuse), 5 complicated preemies, 2 cancers (malignancies), 2 severe autism/developmental delay, 1 cystic fibrosis with liver transplant, 1 severe ulcerative colitis with colectomy. The only one with asthma also has psychosis. We can identify the 62 adults by the clusters of conditions which are the highest cost: HIV, Hep C, Substance Abuse Cancer Advanced Age with multiple conditions Severe mental illness plus or minus other health conditions Neurodegenerative disorders Dialysis, transplants I find it hard to imagine how to impact their costs. There are about 2-3 adults who have problem lists and medication lists that are not huge, and for whom it is not totally evident why their costs are high. Each of these has home care services, which may be a major contributor to their cost. 22

Risk Adjustment of Total Cost of Care Predicted Risk Score Predicted Total Cost PMPY Actual Total Cost PMPY Actual % of Predicted Actual Total Cost PMPY Health Center A 1.52 $ 7,894 $ 7,700 98% $ 6,860 Health Center B 1.21 $ 6,307 $ 5,419 86% $ 5,026 Health Center C 1.59 $ 8,276 $ 8,233 99% $ 7,420 Health Center D 1.03 $ 5,370 $ 5,318 99% $ 4,775 Health Center E 1.54 $ 8,007 $ 7,417 93% $ 6,781 Health Center F 1.08 $ 5,605 $ 5,590 100% $ 5,167 Health Center G 1.21 $ 6,267 $ 5,654 90% $ 5,052 Health Center H 1.37 $ 7,101 $ 6,810 96% $ 6,393 Health Center I 1.30 $ 6,756 $ 6,299 93% $ 5,496 Health Center J 0.98 $ 5,086 $ 5,707 112% $ 5,160 Health Center K 1.78 $ 9,245 $ 8,784 95% $ 8,275 Health Center L 1.25 $ 6,471 $ 6,004 93% $ 5,121 Health Center M 1.94 $ 10,099 $ 9,583 95% $ 8,683 Health Center N 0.99 $ 5,137 $ 4,758 93% $ 4,593 FQHC Average $ 6,663 Statewide Average 1.00 $ 5,197 23

Patients With High Cost To Health Center Medical 2013 Medical 2012 # of Visits Patients Visits # of Visits Patients Visits 1 4,585 4,585 1 5,988 5,988 2 3,313 6,626 2 3,723 7,446 3 2,472 7,416 3 2,641 7,923 4 2,386 9,544 4 2,242 8,968 5 1,945 9,725 5 1,581 7,905 6 1,325 7,950 6 976 5,856 7 877 6,139 7 613 4,291 8 576 4,608 8 355 2,840 9 390 3,510 9 240 2,160 10-14 615 6,921 10-14 316 3,526 15-19 113 1,858 15-19 56 931 20-29 37 853 20-29 23 500 30+ 3 120 30+ 1 33 Total: 18,637 69,855 Total 18,755 58,367 Single Visits 2013 Single Visits 2012 Est 39.72% Est 31.53% New 60.28% New 68.47% 24

Driving The Health Center Towards Triple AIM Goals

FQHC Revenue Today & In The Future TODAY PPS BASED ON VOLUME NONE SERVICE PAYMENT TRIPLE AIM PAYMENT APM BASED ON PATIENTS PCMH/CASE MANAGEMENT ADD-ON SHARED SAVINGS QUALITY BONUS PATIENT ENGAGEMENT BONUS FUTURE 26

IMPACT OF PROVIDER MARKET ON TODAY S REIMBURSEMENT MODEL Provider Vacancies Current Provider FTEs 10 8 Visits/FTE 3,900 3,900 Total Visits 39,000 31,200 Net Revenue/Visit $ 120.00 $ 120.00 Patient Service Revenue $ 4,680,000 $ 3,744,000 Grant & Other Revenue $ 1,300,000 $ 1,300,000 Total Revenue $ 5,980,000 $ 5,044,000 Provider Compensation $ 1,750,000 $ 1,400,000 Variable Staff Compensation $ 1,200,000 $ 960,000 Fixed Staff Compensation $ 1,600,000 $ 1,600,000 Total Compensation $ 4,550,000 $ 3,960,000 Variable OTPS $ 600,000 480,000 Fixed OTPS $ 780,000 $ 780,000 Total OTPS $ 1,380,000 $ 1,260,000 Total Expense $ 5,930,000 $ 5,220,000 Note: Need to define what full provider staffing means Will a larger CHC always have provider vacancies? Net Income $ 50,000 $ (176,000) 27

IMPACT OF PROVIDER MARKET ON TODAY S REIMBURSEMENT MODEL Future (Current?) Market Current Provider FTEs 10 10 Visits/FTE 3,900 3,650 Total Visits 39,000 36,500 Net Revenue/Visit $ 120.00 $ 120.00 Patient Service Revenue $ 4,680,000 $ 4,380,000 Provider Salary $ 1,750,000 $ 2,220,000 Fringe $ 350,000 $ 350,000 Total COGS $ 2,100,000 $ 2,570,000 Gross Margin $ 2,580,000 $ 1,810,000 Variable Staff Compensation $ 1,200,000 $ 1,200,000 Fixed Staff Compensation $ 1,600,000 $ 1,600,000 Total Compensation $ 2,800,000 $ 2,800,000 Variable OTPS $ 600,000 600,000 Fixed OTPS $ 780,000 $ 780,000 Total OTPS $ 1,380,000 $ 1,380,000 Total Other Expense $ 4,180,000 $ 4,180,000 Grant & Other Revenue $ 1,600,000 $ 1,600,000 Net Income $ - $ (770,000) 28

COST OF TURNOVER Recruitment Cost $ 10,000 Length of Vacancy 3.5 Months Annual Productivity 3,600 Visits Lost Visits 1,050 Net Revenue/visit $ 120.00 Lost Revenue $ 126,000 Provider Comp $ 54,900 $180K, 22% fringe Marginal Cost Coverage $ 71,100 Months to Full Rampup 6 Lost Visit % 10% Lost Visits 180 Lost Revenue $ 21,600 Total Financial Impact $ 102,700 29

Patient Centered Health Home Metrics

The Ongoing Economics of the EHR New licenses/depreciation of license cost Maintenance fees IT infrastructure Provider productivity hit Staff productivity/work Meaningful use $ Using integrated EHR/PM to make practice more efficient PPS change in scope 31

PCHH Metrics/Performance Standards Panel Size per Provider FTE - Top down: current number of patients served by provider. Address issues such as patients seen by multiple providers, patients who came in once and haven t returned. etc. - Bottom up: total visit slots divided by visits per patient per year (acuity adjusted?) - 1200 1300 is the word on the street, but it is rarely seen (maybe because of unassigned patients) - What happens to a panel when a provider leaves? - Who s in charge of all this the CMO or the person who does scheduling? 32

PCHH Metrics/Performance Standards Physical capacity How many patients/visits can be handled with the current facilities Division of clinical vs. administrative space - Is the current space configured appropriately to support PCHH? Will appropriate configuration require more or less space? Visits per patient per year Are patients coming in on clinically indicated intervals? - How many patients came in once? How many new patients (esp in second half of year)? How many patients came in more than 10 times? How does OB drive this number? - Is access denied/delayed because of long 3 rd next available appointment? What are variations based on diagnoses? - What are variations based on payor? Will this change in 2014? 33

PCHH Metrics/Performance Standards Integrated medical, dental & behavioral health - % of OB, dental and behavioral health patients receiving primary care at CHC - % of medical patients receiving dental & behavioral health Continuity - Patient centered: percent of visits with your PCP (or touches with team) - Provider (team) centered: % of visits (touches) with your own patients % of chronic care patients receiving care within clinically indicated timeframe Next and 3 rd next available appointment (within 48 or 72 hours) 34

PCHH Metrics/Performance Standards Urgent care only for low acuity issues No ER visits for non-emergent conditions No visits to other PCPs New patients less than 20% Existing patient walk-in less than 10% No show rate less than 15% Assurance that ordered ancillaries & specialty are received Retention of 90% of aged-in Medicare eligibles Non-visit means for patient access to information (portal, email/text, telephonic, staff) 35

PCHH Metrics Actual Access Standards (from Managed Care Organization) Appointment Type Non-urgent appointment with Primary Care physician Urgent care appointment that do not require prior auth. Urgent care appointment that require prior auth. Non-urgent appointment for ancillary services Non-urgent appointment with non-physician mental health providers Offer the Appointment within 10 bus. days of request 48 hours of request 96 hours of request 15 bus. Days of request 10 bus. days of request Initial health assessment (complete history and physical examination) 120 days of enrollment 36

PCHH Metrics Actual Access Standards (from CHC) CHC - 3rd Next Available Dental Visit by Clinic Dental Patient Type New November Established New December Established New January Established Eastside 37 31 33 27 23 17 Westside 41 29 31 24 24 9 CHC - 3rd Next Available Medical Visit by Clinic Medical November December January Patient Type New Established New Established New Established Eastsiide 16 19 27 26 14 16 Westside 10 12 7 10 5 9 Downtown 34 23 29 26 25 16 37

PCHH Metrics - Actual Why is it important? In a system with assigned members, patients utilizing other providers may be reassigned, reducing capitated revenue. Patient movement will impact the accuracy of quality scores. If there is a large amount of patient leakage, are we really a health home? Reattributed Member Months Total Member Months % Lost To Attribution Health Center A 999.59 56,598.55 1.8% Health Center B 1,060.17 26,735.54 4.0% Health Center C 699.20 16,769.49 4.2% 38

PCHH Metrics Actual Short Tenure Patients Overview of CHC patients: > For period: 7/1/11-6/30/12 New patients = 10,527 All patients = 21,909 Percentage = 10,527 / 21,909 = 48% > For period: 7/1/12-6/30/13 New patients = 9,709 All patients = 21,416 Percentage = 9,709 / 21,416 = 43.3% 39

PCHH Metrics Actual Employee Tenure Median All employees: 2 years, 3 months and 15 days Non-providers: 2 years, 6 months and 26 days Providers: 1 year, 8 months Mean (Average) All employees: 4 years, 5 months and 18 days Non-providers: 4 years, 7 months and 22 days Providers: 3 years, 7 months and 8 days 40

PCHH Metrics Actual Touches Quarter # of Patients Office Visits Referral Updates Screenings Updates Letter Count Interpreter Services Problem List Updates Telephone Encounter Interim Notes Home Care Visit March 11847 2856 12088 138 194 297 1504 3207 95 0 Q2/2013 12735 8704 37109 652 853 791 5211 10257 419 0 Q3/2013 9377 6005 25519 487 512 477 3419 7824 238 5 Q4/2013 9608 7435 No data No data 1335 671 2394 9004 208 33 Pre-Visit Planning Individual and Family Support Referral to Community Services Ancillary Services Goal Updates Health Promotion Comprehensive Care Planning Care Coordination Comprehensive Transitional Care Total Touches 0 63 51 261 3 233 1 141 0 6050 0 223 152 635 18 1222 54 390 1 20226 0 183 1052 403 2 697 24 131 1 14968 6 152 396 28 29 879 34 108 34 15311 41

PCHH Metrics Actual Visits to Touches Health Center Health Center Health Center A B C Visits 31,219 60,315 25,107 Engagement Touches 7,743 13,557 7,073 Visits & Engagement Touches 38,962 73,872 32,180 Ratio of Visits to Touches 4.0 4.4 3.5 PPS Rate $227.28 $188.53 $227.04 Equivalent PPS Earned $8,855,283 $13,927,088 $7,306,147 Total Payments $ 7,640,004 $ 14,057,474 $ 6,518,592 Earned - Payments $1,215,280 ($130,386) $787,555 16% -1% 12% 42

PCHH Metrics Moving Visits 43

Calculations for PCHH/UDS Patient Target 1 Redistributed Visits 3,947 New Patient Visits* 1,800 Established Patient Visits 347 Total Visits Available 2,147 *Take twice as long as established 3 2 New Medical Patients # of Visits Patients Visits 1 1,500 1,500 2 250 500 3+ 50 147 Total: 1,800 2,147 Total Patients After Practice Transformation 20,437 Total Visits 68,055 Visits PPPY 3.33 Old Panel Size (20 FTEs) 932 New Panel Size 1,022 44

Calculations for Closing Panel 1 Medical Visits # of Visits Patients Visits 1 6,585 6,585 2 3,313 6,626 3 2,472 7,416 4 2,386 9,544 5 1,879 9,395 6 1,225 7,350 7 777 5,439 Total: 18,637 52,355 Visits PPPY 2.81 2 Foregone New Patients 2,000 New Patient Visits* 2,000 Incremental Established Patient Visits 2,000 Revised Total Visits 54,355 Revised Total Patients 16,637 Visits PPPY 3.27 *Take twice as long as established Should also look at 3rd next available appointment 45

How Do We Pay For The Patient Centered Health Home?

Practice Restructuring PCHH How Do We Pay For It? Basic systems envision an add-on to current per visit rates, more advanced systems envision paying for additional cost through capitation To get appropriately compensated, may need to record services of all staff (especially for patients who receive service from a non-billable provider) Health center may be assigned management of a population (either in an ACO or PCMH model) Note the savings from PCMH are downstream, so we must start working with payors to look at the total costs of our patients. Don t just look at: 1) individual indicators such as ER utilization (will miss diabetics who don t need dialysis) or 2) incremental savings (since you are already saving money!) 47

Practice Restructuring PCHH How Do We Pay For It? PCMH Gradual Implementation Budget what is affordable over time One-time (practice redesign) vs. ongoing (staff, IT, EHR modules & portal) cost Redefining roles of existing positions/staff Sample short term goals - Hire call center RN - Move Discharge from Operational to Clinical to better coordinate scheduling of follow-up visits - Evaluate data management & referral processes

Cost Savings From Patient Retention (Eliminating Costs of Non-Retention) 99203 99213 Health Center Cost Per RVU $ 60.00 $ 60.00 RVU for CPT Code 3.14 2.11 Cost per Procedure $ 188.40 $ 126.60 Addl Registration/Enrollment Effort $ 60.00 (3 hrs @ $20/hr comp cost) Total Cost Per Service $ 248.40 $ 126.60 49

Shifting Work Physician - $170,000 $210,000 RN - $65,000 (is shortage easing?) Medical assistant 1 - $12/hr Medical assistant 2 - $14/hr Medical assistant 3 - $20/hr Care coordinator - $20/hr Front desk - $13/hr Scribe 50

Work, and Does It Work?

The Daily Priority of Work 1 Keeping the Doors Open 2 External Relations ACTIVITIES 3 Improvement Scheduling patients Processing patients Billing & collections Staff management Fixing problems Board Regulatory reporting Community partners Provider management Growth Quality Customer service Meaningful use PCHH 52

Continuum of CHC Performance Best Practice Many Good Attributes Average Not So Good Train Wreck 12% 27% 37% 18% 6% OK in 2016 OK in 2010 53

Work in a Community Health Center Clinical staff in CHCs almost universally say there is too much work in a day. Some of this is driven by the EHR and increased requirements (Meaningful use and PCMH certification) Clinic administrative staff also report too many tasks/too much work 54

Performance Improvement Seeks to identify and remove the causes of defects and errors Based on concept that sustained quality improvement requires a reduction in process variation Focuses on achieving measurable and quantifiable results, based on verifiable data One system, Six Sigma, has a goal of 3.4 defects per million transactions; applying the Six Sigma methodology moves an organization towards that goal Also tied into people management Jack Welch 10% rule 55

Sample Performance Improvement Process Define process improvement goals Measure key aspects of current processes and collect relevant data Analyze the data to verify cause and effect Improve the process based on data analysis Control deviations from target performance 56

Sample of Data 57

Distribution of Productivity 4 3 # Staff 2 1 0 <60% 60-69% 70-79% 80+ % Efficiency 58

Picture of Improvement April Bill Processing Correct Claims Denial Processing Monthly Minutes Worked # Standard Minutes - 10 # Standard Minutes - 5 # Standard Minutes - 15 Total Standard Minutes Efficiency Rate Average 9,240 6,295 68.1% Sanchez, Lourdes 9,240 534 5,340 17 85 14 210 5,635 61.0% Trong, Vang 9,240 600 6,000 7 35 1 15 6,050 65.5% Nalbandian, Aram 9,240 644 6,440 18 90 0-6,530 70.7% Aguilar, Martha 9,240 667 6,670 18 90 2 30 6,790 73.5% Dejesus, Corazon 5,544 108 1,080 56 280 185 2,775 4,135 74.6% Limpiado, Marina 9,240 688 6,880 71 355 17 255 7,490 81.1% Old Performance 60,984 3,727 37,270 189 945 222 3,330 41,545 68.1% New Performance 60,984 42,925 70.4% By getting the worst performer to average performance, or by replacing the worst performer with an average performer, the health center could increase overall efficiency from 68% to over 70%, and get over 22 hours (1,380 minutes or.15 of an FTE) of service activity from the same number of staff. 59

Sample Performance Improvement Implementation Plan Activity #1: Develop Performance Improvement Team (PIT) Activity #2: Develop DMAIC process management Define what process CHC is trying to improve Measure the process, by identifying the steps in the process, and measurements used determine if the process is working Analyze the data, to understand where the process is/isn t working Improve develop solutions to improve the process, and determine if those solutions are effective Control put in standard policies, procedures, and workflows that capture the improvement solutions. Monitor performance using data. Activity #3: Implement Define & Measurement for the revenue cycle currently the Billing Department is correcting a large number of errors up to 250 per day, or 60% of all bills. The revenue cycle includes scheduling, registration, and billing (this effort will not include the recording of clinical data, which is also included on bills). CHC will define the measurement variables and collect the data 60

Sample Performance Improvement Implementation Plan Activity #4: Hire Coder to Audit Billing Activity #5: Implement Analyze, Improve and Control for the revenue cycle Activity #6: Implement Define & Measurement for the UDS clinical quality measures CHC reports 16 clinical quality measures HRSA on an annual basis via the Uniform Data System (UDS) report. This timing will allow CHC to understand data issues in advance of preparing the UDS for calendar year 2016. 61