DISRUPTION AND INNOVATION: DATA NAVIGATING …...Data will be shared to evaluate practice patterns,...

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CPAs & ADVISORS

NAVIGATING PAYMENT BUNDLES AND MACRA WITH ACTIONABLE DATA

Andy Williams CPA Partner

Eric Rogers MEd.RT(R) Senior Managing Consultant

DISRUPTION AND INNOVATION: DATA

Health care policy update

Data analytics and bundled payments

MACRA

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Agenda

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Health Care Policy Update

• ACA: “Repeal-Delay-Replace”

• Sec. Health and Human Services Rep. Tom Price

• CMS Innovation Center

• ACOs

• Bundles

• CPC+

• Innovation models

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Health Care Policy Update

ACA Program

Payment &

Quality

• Bundled Payments: BPCI, CJR and EPM

• Shared Savings

• Value-Based Purchasing

• Readmissions Reduction Program

• Hospital-Acquired Condition Reduction

Delivery • ACOs

Coverage• Medicaid Expansion

• Health Insurance Exchange

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• Launched over 30 new payment models in six years

• Estimated 18 million patients impacted/received care through new payment models

• Invested in EMR and data analytics infrastructure

• More than 30% of FFS payments tied to value in 2016. On track for 50% by 2018.

• Partnered with Medicare, Medicaid and commercial payors to develop value-based models of care

• State Innovation Models and global payment arrangements: Maryland and Vermont

• Developing MACRA proposed/final rule

• $34 Billion spending reduction per CBO

CMMI Accomplishments

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Bundled Payment Popularity

Source: CMMI Website

0

200

400

600

800

1000

1200

ACOInvestment

Model

ACOAdvancedPayment

ACO ESRD ACO NextGen

ACONursing

Home VBP

ACOPioneer

ACO RHC BPCI 2 BPCI 3 CJR EPMs OncologyBundle

Comp.Primary

Care Init.

InnovationAwards

Participants in CMMI Payment Models

Bundling works but requires several key capabilities

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Data Analytics and Bundled Payments

1. Data governance and analytics

2. Activated steering team3. Post-acute partners4. Physician engagement

Case Study Baptist Health System, San Antonio TX

JAMA January 2017

• 3,942 Medicare patients• Reduced episode spending by 21% • Reduced readmissions and ED visits by

1.4%• Reduced ALOS• Reduced implant costs 29%• Reduced PAC spending 27%

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

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Episode Definition: General

EPISODE DEFINITION: SERVICESIncluded

• 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• *Fraudulent and billing errors

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

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• 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

PAYMENT AND PRICING: RISK STRUCTURE

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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

PAYMENT AND PRICING: TARGET PRICE

2/3 hospital

1/3 regional

Year 1 & 2 1/3 hospital

2/3 regional

Year 3 100%

regional

Year 4 & 5

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$36,644

$52,144

$21,141

$38,582

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

DRG 469 non-fracture DRG 469 fracture DRG 470 non-fracture DRG 470 fracture

PACIFIC REGION: MEAN EPISODE PAYMENTS

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QUALITY POINTS

THA/TKA Complications

HCAHPS Survey

≥ 90th 10.00 8.00

≥ 80th and < 90th 9.25 7.40

≥ 70th and < 80th 8.50 6.80

≥ 60th and < 70th 7.75 6.20

≥ 50th and < 60th 7.00 5.60

≥ 40th and < 50th 6.25 5.00

≥ 30th and < 40th 5.50 4.40

<30th 0.00 0.00

3 Decile Improvement 1.00 0.80

THA/TKA Voluntary PRO and Limited Risk Variable Data

Yes 2.00

No 0.00

Total Points

14.1

Poor: < 6.03% discount

Good: 6.0 – 13.22% discount

Excellent: >13.21.5% discount

• 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

FINANCIAL ARRANGEMENTS: GAINSHARING

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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

DATA SHARING

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Data Analytics

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Descriptive Analytics

What happened?

Reporting dashboards

Diagnostic Analytics

Why did it happen?

Ad-hoc query data mining

Predictive Analytics

What will happen?

Statistics planning

Prescriptive Analytics

What should happen?

Simulation optimization

Data Analytics: Improving Insight and Business Value

Horizon Difficulty

Val

ue

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

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DATA ANALYTICS

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DATA ANALYTICS: OUTLIER MANAGEMENT

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MANAGING RISK

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

Inpatient Outpatient IP Rehab/Read Home Health SNF Physician DME

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EPISODE PAYMENT DISTRIBUTION

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0

20

40

60

80

100

120

140

160

0-60 61-65 66-70 71-75 76-80 81-85 85-90 91-95

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

Pati

ent

Vo

lum

e b

y A

ge

Med

icar

e’s

Epis

od

e Pa

ymen

tsSPENDING BY AGE

$34,690

$17,658

$26,186

$8,916

$17,481

$2,632

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FIRST DISCHARGE SETTING: DRG 470

HH SNF IRF

Home, 9.5%

Hospital, 0.5%

SNF, 57.3%

Other, 0.5%

HHA, 30.8%

Hospice, 0.5%

Inpatient Rehab, 0.9%

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IATROGENIC RISK

Discharged Home/Home Health Discharged SNF/ IRF

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GEOGRAPHIC MAPPING

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EPM: THE “CARDIAC BUNDLE”

Key Components

• Episode definitions• CABG• AMI/PCI

• Transfer rules• Target Price with automatic 3%

discount• Retrospective reconciliation for hospital• Quality requirements• Gainsharing opportunities• Regulatory waivers• Cardiac rehab incentive payment

system• SHFFT DRGs 480, 481, 482• Cardiac rehab incentives

MSA SELECTION

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CJR and SHFFT MSAs

AMI and CABG MSAs

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EPM: THE “CARDIAC BUNDLE”

Key Components• Selection criteria (98 MSAs)

• Episode definition• CABG

• AMI/PCI

• Transfer rules

• Target Price with automatic 3% discount

• Retrospective reconciliation for hospital

• Quality requirements

• Gainsharing opportunities

• Regulatory waivers

• Cardiac rehab incentive payment system

• ACI: Advancing Care Information

• APM: Alternative Payment Model

• CMS: Centers for Medicare & Medicaid Services

• FFS: Fee-for-Service

• EC: Eligible Clinicians (provider subject to MACRA)

• CPIA: Clinical Improvement Activities (also known as IA or Improvement Activities)

• MACRA: Medicare Access and CHIP Reauthorization Act of 2015

• MIPS: Merit-Based Incentive Payment System

• MIPS APM: Qualify for preferential MIPS Scoring but not considered Advanced APMs

• MU: Meaningful Use

• PQP: Partial Qualifying APM Participant

• PMPM: Per Member Per Month

• QP: Qualifying APM Participant

• VBPM: Value-Based Payment Modifier

• NPI: National Provider Identifier

• CAHPS: Consumer Assessment of Healthcare Providers and Systems

• PQRS: Physician Quality Reporting System

• QRURs: Quality and Resource Use Reports

• QIO: Quality Improvement Organization

MACRANYMS

• Repeals Sustainable Growth Rate (SGR) and ends “doc fix”• Phases out Medicare payment adjustments under current physician reporting

programs: Physician Quality Reporting System (PQRS) Physician Value-Based Modifier Program (VBM) Medicare physician Meaningful Use (MU)

• Requires CMS to develop & implement a complex system for measuring, reporting & scoring the value & quality of care via two separate clinician participation tracks

• Very small percentage of eligible clinicians exempted from system• Performance period started January 1st and impacts payment in 2019• Enacted with bipartisan support

WHY MACRA IS IMPORTANT

Advanced Alternative Payment Models (APMs)

Merit-based Incentive Payment System (MIPS)

• Payments for cost & quality performance built on FFS structure

• 5% Bonus in 2019-2024• Exempts from MIPS Reporting• Payment & Patient thresholds• Requires downside risk, quality & CEHRT• 70,000 – 120,000 clinicians will qualify in

year 1(1)

OR

• Fee-for-Service with performance-based adjustment applied to future Medicare Part B Payments

• Consolidates physician reporting programs into one

• Performance measured against peers• Stakes gradually rise over time• Most clinicians will participate in year 1 ~

500,000 – 645,000(1)

Most eligible clinicians should assume they fall in the MIPS track which looks and feels similar to current Medicare physician reporting programs in terms of reporting and impact on future reimbursement.

(1) Per CMS estimates of eligible APM and MIPS clinicians found in MACRA final rule

NEW PHYSICIAN QUALITY REPORTING PROGRAM

Yes No

Am I in an APM?

Yes No

Am I in an eligible APM?

Do I have enough payments or patients

through my eligible APM?

Yes No

Qualifying

APM

Participant

YesNo

Patients:

20% APM

80% FFS

Payments:

25% APM

75% FFS

≤ $30,000 in Medicare

Part B allowed charges

OR

≤ 100 Medicare patients

Is it my first year in

Medicare or am I below the

low-volume threshold?

Low-volume threshold:

Subject to MIPS:

MIPS APM

• Subject to MIPS

• Favorable scoring

under MIPS APM

scoring standard

Not subject to

MIPS

Do I qualify as a Partial QP?

Yes No

Do you voluntarily elect

to report MIPS?

No Yes

Not subject to MIPS

Patients:

10% APM

90% FFS

Payments:

20% APM

80% FFS

*See Appendix 1 for MIPS APM scoring

APM DETERMINIATION IS COMPLEX

Max MPFS Base Rate Adj

2017 2018 2019 2020 2021 2022 +

0.5% Update 0.0% Update

APM 5% annual bonus

2026+APM: 0.75%MIPS: 0.25%

-4.0% -5.0% -7.0%-9.0%

12%15%

21%27%

Fee Schedule Update

Budget Neutral Scaling factor 3x

REIMBURSEMENT IMPLICATIONS: WHAT’S AT RISK

Quality(60%)

Resource Use(0%)

Advancing Care

Information(15%)

Improvement Activities

(25%)

• Replaces PQRS• Most participants report

6 measures, including 1 outcome

• Can receive partial credit• Bonus points available• Group Web Interface -

report 15 measures• MIPS APMs report

quality through APM

• Replaces VBPM cost component

• Included in 2018 performance year

• Based on claims data• 10 disease groups• Refining attribution

methodology

• Replaces MU• Moves away from “all

or nothing”• Base score attestation• Performance score• Reduced # of measures• Bonus points available• Certain exemptions• Can report as a group

• New category• >90 activities to choose

from• Report High or Medium

weighted activities• 90 consecutive days• Preferential scoring:

• PCMH full credit• Half credit for

MIPS APMS

Year 12017

Composite Performance Score (CPS)

*See Appendix 2, 3 and 4 for preferential scoring and small practice accommodations

MIPS OVERVIEW REFRESHER

Group Reporting

• Group that consists of a single TIN with ≥ 2 ECs (at least one MIPS EC) who have reassigned their billing rights to the TIN

• Group evaluated on all measures reported regardless of applicability to individual ECs

• Payment adjustments based on group performance

• All TIN measure data included, regardless of MIPS eligibility

• May report through: CMS Web Interface, CEHRT, a registry, or a QCDR

Individual Reporting

• A single MIPS eligible clinician

• Payment adjustments based on individual performance

• May report through:

CEHRT,

a registry,

a QCDR, or

May submit quality data through Medicare claims process

(1) Must report across all performance categories as an individual or a group(2) Do not have to declare group reporting to CMS unless reporting through

Web Interface (June 30th, 2017).

HOW TO SUBMIT MIPS DATA

• Revised low-volume threshold for MIPS exclusion Patients and Part B charge went from “both” to “either/or”

• Part B charges ≤ $10k to $30k

• Eliminated cost component weighting in 2017• Reduced some of reporting burden:

Quality – reduced percent of applicable patients CPIA – number of activities to report went from 6 to 4; 2 for small and rural practices ACI – reduced reporting from 11 to 5 measures; non-physicians may elect not to report

• Established minimum reporting requirements (“Pick your Pace”) to avoid penalties in first year

• Reopening application process for CPC+ and developing a new MSSP Track 1 program with downside risk (Track 1+)

KEY CHANGES IN FINAL RULE

MIPS “Pick Your Pace”

“Report Nothing” “Testing” “Partial Reporting” “Full MIPS

Reporting”)

4% penalty No negative

adjustment or

bonus

Small positive

adjustment

+

Potential bonus

Max potential

adjustment

+

Potential bonus

+

Potential

Exceptional Bonus

CMS is estimating 90% of eligible clinicians will receive a positive or neutral MIPS Adjustment for the 2017 Transition Year

2107: MIPS TRANSITION YEAR

Assess clinician eligibility

Begin to assess the eligibility of MIPS eligible clinicians under the Final Rule requirements by reviewing historical Medicare Part B payments and volumes

Assess current quality reporting performance

Develop understanding of quality reporting requirements

Begin to identify potential reporting metrics based on historical performance or area of specialty

• Access Medicare Quality and Resource Use Reports (QRURs) to identify improvement areas

Determine reporting strategy

Analysis to determine optimal reporting strategy based on specialty, quality outcome performance and MIPS status

Identify various reporting strategies to improve performance under MIPS

Identify future reporting strategy

Evaluate current infrastructure with regards to reporting under MIPS and identify what MACRAtrack is feasible for the organization/clinician in the future

Ensure that future reporting strategy aligns with organizations that will help improve quality and drive down costs

Stay informed

PREPARING FOR TRANSITION YEAR & BEYOND

• MACRA five-year reimbursement risk on stand-alone basis likely less than cost of infrastructure required to fully maximize reimbursement effect

• Efforts to maximize MACRA reimbursement effect could likely have opposite (& potentially more material) downstream reimbursement effects for various providers in FFS environment

• MIPS cost per attributed beneficiary & outcomes parameters create most significant infrastructure needs Similar to bundled payment initiatives needs (e.g., CJR), but much

more encompassing Similar to ACO initiative needs regarding identification & management

of attributed beneficiaries

• MACRA creates additional incentive for employed or independent physicians to actively partner with providers

STRATEGIC IMPLICATIONS

• Advanced APM eligibility is difficult so providers should assume MIPS track

• Organizations need the necessary infrastructure & expertise to manage data

reporting, care coordination & clinical outcomes before taking on payment

risk

• No cover for eligible clinicians (with exception of those exempt); unlikely to

see swaths of providers opting out of Medicare participation

• Will likely see more clinicians & group practices move toward ACOs over

time. It is crucial to understand your local market & develop potential

alignment strategies with independents

STRATEGIC IMPLICATIONS

THANK YOU

FOR MORE INFORMATION // For a complete list of our offices

and subsidiaries, visit bkd.com or contact:

Andy Williams CPA// Partnerawilliams@bkd.com // 417.865.8701

Eric M. Rogers M.Ed. RT(R) // Managing Consultanterogers@bkd.com // 417.865.8701

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