Leading the ChangeMaximizing Payment Models

Melinda S. Hancock, FHFMA, CPAPartnerDHG Healthcare2014-15 Chair Elect, HFMA

HFMA Lead #LikeAGirlNovember 14, 2014

"If your actions inspire others to dream more, learn more, do more, and become more, you are

a leader.” – John Quincy Adams

ACA Gains through 2019

Source:CBO and Joint Committee on Taxation, 2010 Projection

Amounts in Billions

Industry Tipping Point

4

Rev

enue

Time

• How do local market conditions impact timing considerations?• Can market-changing events create an urgent paradigm shift?• What is my step-change business model risk?• Do I have the financial tools to adequately analyze relevant states?

Payment Model & Increasing Risk Acceptance

5

Hierarchy of Risk and Payment Models

Alignment of Strategy and MetricsQuestions to Ask

• How many metrics am I tracking?• How many metrics are duplicated?

Do they have the same numerator and denominator? Source?

• Are they aligned with our results and strategic goals?

• What contracts are coming up for renewal that should have new metrics or should be at risk (mgd care, medical directorships, PMAs, etc.)

• What are we focused on?

Reform Timeline

Value Based Purchasing

VBP Shifting of Domain Weights

FY 2013 FY 2014 FY 2015 FY 2016

• Core Measures

• Patient Experience • Efficiency (MSPB)

• Outcomes

New NQS Based Domains for FY 2017

10

HCAHPS = 25%

Safety = 20%

MSPB = 25%

Clinical Care - Process = 5%

Clinical Care - Outcomes = 25%

VBP – FY13 Domain WeightsPerformance Period: July 1, 2011 – March 31, 2012Reimbursement Period: October 1, 2012 – September 30, 2013

Core Measures = 70%

VBP – FY14 Domain WeightsPerformance Period: April 1, 2012 – December 31, 2012Reimbursement Period: October 1, 2013 – September 30, 2014

Core Measures = 45%Outcomes = 25%

VBP – FY15 Domain WeightsPerformance Period: January 1, 2013 – December 31, 2013Reimbursement Period: October 1, 2014 – September 30, 2015

HCAHPS = 30%

Outcomes = 30% MSPB = 20%One Measure!!

Core Measures = 20%

VBP – FY16 Domain WeightsPerformance Period: January 1, 2014 – December 31, 2014Reimbursement Period: October 1, 2015 – September 30, 2016

HCAHPS = 25%

Outcomes = 40%

MSPB = 25%

Core Measures = 10%

15

HCAHPS = 25%

Safety = 20%

MSPB = 25%

Clinical Care - Process = 5%

Clinical Care - Outcomes = 25%

VBP – FY16 Domain WeightsPerformance Period: January 1, 2014 – December 31, 2014Reimbursement Period: October 1, 2015 – September 30, 2016

Value Based Purchasing

• Outcomes = Income

• Mandatory Pay for Performance Program

– 3,500 hospitals are included in this program across the country

• Reimbursement Determine Two Ways:

– Achievement

How we compare to National Top Decile (350 Hospitals)

– Improvement

How we measure against ourselves

Did we do better than a previously measured baseline period

Value Based Purchasing

• Percent of Medicare Reimbursement at Risk

• FY 2013 – 1.00%

• FY 2014 – 1.25%

• FY 2015 – 1.50%

• FY 2016 – 1.75%

• FY 2017 – 2.00%

• FY 2018 – 2.00%

• FY 2019 – 2.00%

• FY 20xx – refers to the Federal Fiscal Year (Oct. 1 – Sep. 30) when DRG

payments will be affected

VBP FY 2016 – New Measures

• Patient Experience

– No Change – Same HCAHPS Measures

• Core Measures

– 5 Dropped; 1 New

• Outcomes

– 3 New Measures

• Efficiency

– No Change

VBP – FY 2016 – Patient Experience

• HCAHPS

– Hospital Consumer Assessment of Healthcare Providers Survey

– An engagement survey CMS has mandated each hospital give to every

discharged inpatient

– Consists of 27 questions that lead to the 8 categories assessed for VBP

– Patients score each question on scale of 4

– For answers to count, patients must give hospitals a score of 4 or “Always”

VBP FY 2016 – Patient Experience

• Communication with Nurses

• Communication with Doctors

• Responsiveness of Hospital Staff

• Pain Management

• Communication about Medicines

• Cleanliness and Quietness of Hospital

• Discharge Information

• Overall Rating of Hospital

VBP FY 2015 – Core Measures

• AMI-7a• AMI-8a• HF-1• PN-3b• PN-6• SCIP-Inf-1

• SCIP-Inf-2• SCIP-Inf-3• SCIP-Inf-4• SCIP-Inf-9• SCIP-Card-2• SCIP-VTE-2

VBP FY 2016 – Core Measures

• AMI-7a

• PN-6

• SCIP-Inf-2

• SCIP-Inf-3

• SCIP-Inf-9

• SCIP-Card-2

• SCIP-VTE-2

• IMM-2

Note: IMM-2 Performance Period is only 6 MONTHS (Two 3 Month Periods)January 1, 2014 – March 31, 2014 AND October 1, 2014 –

December 31, 2014

VBP FY 2016 – Core Measures

Measure ID Benchmark

AMI-7a 100%

IMM-2 98.875%

PN-6 100%

SCIP-Inf-2 100%

SCIP-Inf-3 100%

SCIP-Inf-9 100%

SCIP-Card-2 100%

SCIP-VTE-2 100%

VBP FY 2016 – Core Measures

• AMI-7a

• PN-6

• SCIP-Inf-2

• SCIP-Inf-3

• SCIP-Inf-9

• SCIP-Card-2

• SCIP-VTE-2

• IMM-2

VBP FY 2017 – Clinical Care: Process

• AMI-7a

• IMM-2

• PC-01

PC-01 = Elective Delivery Prior to 39 Completed Weeks Gestation

VBP FY 2015 – Outcomes

• 30 Day Mortality – AMI

• 30 Day Mortality – HF

• 30 Day Mortality – PN

• AHRQ – PSI-90

• CLABSI

VBP FY 2016 – Outcomes

• 30 Day Mortality – AMI

• 30 Day Mortality – HF

• 30 Day Mortality – PN

• AHRQ – PSI-90

• CLABSI

• CAUTI

• SSI – Colon

• SSI – Abdominal Hysterectomy

VBP FY 2016 – Outcomes

Measure ID Benchmark

CAUTI 0.000

CLABSI 0.000

Surgical Site Infection

Colon 0.000

Abdominal Hysterectomy 0.000

VBP FY 2016 – Outcomes

Outcomes

• 30 Day Mortality – AMI

• 30 Day Mortality – HF

• 30 Day Mortality – PN

• AHRQ – PSI-90

• CLABSI

• CAUTI

• SSI-Colon

• SSI-Abdominal Hyster.

VBP FY 2017 – Clinical Care and Safety

Clinical Care- Outcomes

• 30 Day Mortality – AMI

• 30 Day Mortality – HF

• 30 Day Mortality – PN

• AHRQ – PSI-90

• CLABSI

• CAUTI

• SSI-Colon

• SSI-Abdominal Hyster.

Safety

• MRSA• C. Diff

Reform Timeline

Outcomes – 30 Day Mortality

• Currently in 3 Performance Periods

– FY 2016 ended June 30, 2014

– FY 2019 began July 1, 2014

• 30 Day Mortality Measures

– Assess deaths: AMI, HF, and PN that occur within 30 days after

admission; which, depending on the length of stay, may occur post-

discharge….

CMS 30 Day Risk-Standardized Mortality Rate Calculation

Facility Predicted Deaths

Facility Expected DeathsX

Measure (AMI, HF, PN) National Crude Rate

=

VBP FY 2016 - Efficiency

Medicare Spend Per Beneficiary (MSPB)

• Captures total Medicare Spending Per Beneficiary relative to a hospital stay,

bundling hospital sources (Part A) with post acute care (Part B)

– Bundles the cost of care delivered to a beneficiary for an episode across

the continuum of care:

3 Days Prior

Hospital Inpatient Stay

30 Days post Discharge

VBP: MSPBSample US

VBP: MSPB

36

PROPOSED MSPB Measures

37

• Additional Efficiency Measures proposed to be added

• Risk Adjusted similarly to MSPB

• Proposed to facilitate alignment with the Physician Value Based Payment

Modifier program

• Includes Part A and B and 3 days prior to admission and 30 days post discharge

Medical Surgical

Kidney/Urinary Tract Infection

Hip replacement/revision

Cellulitis Knee replacement/revision

Gastrointestinal hemorrhage

Lumbar spine fusion/refusion

SOURCE: May 1, 2014 Federal Register

System was penalized $376,003 in FY’15 VBP Program• Must acknowledge the amount UNEARNED• Of the programs dollars made available:– System did not capitalize on $6,187,541

Earned Back Unearned Available $$ % Earned

CGH $288,853 $540,406 $829,259 34.83%

$288,853

$0 $829,259 Chesapeake General Performance

VBP FY'13 TOTAL PERFORMANCE

Breakeven Point: $451,333

Earned Back Unearned Available $$ % Earned

System $4,925,357 $6,187,541 $11,112,898 44.32%

$0 $11,112,898Overall Performance

VBP FY'15 TOTAL PERFORMANCE

$4,925,357Breakeven Point: $5,301,360

Earned Back Unearned Measure Value % Earned

Facility $381,643 $218,077 $599,720 63.64%

$381,643

$0 $599,720

Earned Back Unearned Measure Value % Earned

Facility $278,896 $620,704 $899,600 31.00%

$278,896

$0 $899,600

Core Measures

HCAHPS

Breakeven Point: $232,525

Breakeven Point: $348,788

Earned Back Unearned Measure Value % Earned

Facility $539,763 $359,837 $899,600 60.00%

$539,763

$0 $899,600

Earned Back Unearned Measure Value % Earned

Facility $59,974 $539,746 $599,720 10.00%

$59,974

$0 $599,720

Outcomes

Efficiency

Breakeven Point: $348,788

Breakeven Point: $232,535

Facility Bonus / (Penalty) Total Score State Average National Average National ΔFacility A $97,593 42.03 41.81933117 41.70169535 0.325577377

Measure Score

Amount Earned by Measure

Amount Unearned by

Measure

% of Measure Earned

Core Measures

AMI-8a 6 32,712$ 21,808$ 60.00%SCIP-Inf-1 9 49,068$ 5,452$ 90.00%SCIP-Inf-2 7 38,164$ 16,356$ 70.00%SCIP-Inf-3 5 27,260$ 27,260$ 50.00%SCIP-Inf-4 9 49,068$ 5,452$ 90.00%SCIP-Inf-9 5 27,260$ 27,260$ 50.00%HF-1 8 43,616$ 10,904$ 80.00%PN-3b 5 27,260$ 27,260$ 50.00%PN-6 8 43,616$ 10,904$ 80.00%SCIP-Card-2 3 16,356$ 38,164$ 30.00%SCIP-VTE-2 5 27,260$ 27,260$ 50.00%

Core Measures TOTAL 381,643$ 218,077$ 63.64%

HCAHPS

Comm. w/ Nurses 2 17,994$ 71,966$ 20.00%Comm. w/ Doctors 1 8,998$ 80,962$ 10.00%Resp. of Hosp. Staff 2 17,994$ 71,966$ 20.00%Pain Management 2 17,994$ 71,966$ 20.00%Comm. Re: Medicines 1 8,998$ 80,962$ 10.00%Clealiness & Quietness 2 17,994$ 71,966$ 20.00%Discharge Information 3 26,990$ 62,970$ 30.00%Overall Rating 1 8,998$ 80,962$ 10.00%

Consistency Score 17 152,933$ 26,987$ 85.00%

HCAHPS TOTAL 278,896$ 620,704$ 31.00%

Outcomes

AMI 10 179,920$ (0)$ 100.00%HF 3 53,980$ 125,940$ 30.00%PN 8 143,934$ 35,986$ 80.00%AHRQ PSI-90 9 161,928$ 17,992$ 90.00%CLABSI 0 0$ 179,920$ 0.00%

Outcomes TOTAL 539,763$ 359,837$ 60.00%

Efficiency

MSPB 1 59,974$ 539,746$ 10.00%

Efficiency TOTAL 59,974$ 539,746$

Facility TOTAL 1,260,277$ 1,738,363$ 42.03%

Drilldown on Outcomes…

Facility Bonus / (Penalty)Facility A $97,593 42.03 41.81933117 41.70169535 0.325577377

Core Measures

AMI-8a 6 32,712$ 21,808$ 60.00%SCIP-Inf-1 9 49,068$ 5,452$ 90.00%SCIP-Inf-2 7 38,164$ 16,356$ 70.00%SCIP-Inf-3 5 27,260$ 27,260$ 50.00%SCIP-Inf-4 9 49,068$ 5,452$ 90.00%SCIP-Inf-9 5 27,260$ 27,260$ 50.00%HF-1 8 43,616$ 10,904$ 80.00%PN-3b 5 27,260$ 27,260$ 50.00%PN-6 8 43,616$ 10,904$ 80.00%SCIP-Card-2 3 16,356$ 38,164$ 30.00%SCIP-VTE-2 5 27,260$ 27,260$ 50.00%

Core Measures TOTAL 381,643$ 218,077$ 63.64%

HCAHPS

Comm. w/ Nurses 2 17,994$ 71,966$ 20.00%Comm. w/ Doctors 1 8,998$ 80,962$ 10.00%Resp. of Hosp. Staff 2 17,994$ 71,966$ 20.00%Pain Management 2 17,994$ 71,966$ 20.00%Comm. Re: Medicines 1 8,998$ 80,962$ 10.00%Clealiness & Quietness 2 17,994$ 71,966$ 20.00%Discharge Information 3 26,990$ 62,970$ 30.00%Overall Rating 1 8,998$ 80,962$ 10.00%

Consistency Score 17 152,933$ 26,987$ 85.00%

HCAHPS TOTAL 278,896$ 620,704$ 31.00%

Outcomes

AMI 10 179,920$ (0)$ 100.00%HF 3 53,980$ 125,940$ 30.00%PN 8 143,934$ 35,986$ 80.00%AHRQ PSI-90 9 161,928$ 17,992$ 90.00%CLABSI 0 0$ 179,920$ 0.00%

Outcomes TOTAL 539,763$ 359,837$ 60.00%

Efficiency

MSPB 1 59,974$ 539,746$ 10.00%

Efficiency TOTAL 59,974$ 539,746$

Facility TOTAL 1,260,277$ 1,738,363$ 42.03%Variation within the Domain:

Maxed out on AMI Mortality and then got a 0 on CLABSI

Opportunities – VBP: Outcomes

42

FY14 ∆ FY14 ∆ FY14 ∆Performance 87.40% Performance 83.81% Performance 85.21%

Baseline 89.58% -2.18% Baseline 84.76% -0.95% Baseline 88.94% -3.73%Threshold 88.18% -0.78% Threshold 84.77% -0.96% Threshold 88.61% -3.40%

Benchmark 90.21% -2.81% Benchmark 86.73% -2.92% Benchmark 90.42% -5.21%Score 0 Score 0 Score 0

Improvement Dollar Value Score Improvement Dollar Value Score Improvement Dollar Value Score+1% 13,209$ 1 +1% 13,209$ 1 +1% -$ 0

+1.5% 52,836$ 4 +1.5% 39,627$ 3 +1.5% -$ 0+2.5% 105,673$ 8 +2.5% 105,673$ 8 +2.5% -$ 0+3.5% 132,091$ 10 +3.5% 132,091$ 10 +3.5% 13,209$ 1+4.5% 132,091$ 10 +4.5% 132,091$ 10 +4.5% 79,254$ 6+5.5% 132,091$ 10 +5.5% 132,091$ 10 +5.5% 132,091$ 10+6.5% 132,091$ 10 +6.5% 132,091$ 10 +6.5% 132,091$ 10+7.5% 132,091$ 10 +7.5% 132,091$ 10 +7.5% 132,091$ 10+8.5% 132,091$ 10 +8.5% 132,091$ 10 +8.5% 132,091$ 10

1 2 330 Day Mortality Rate - AMI 30 Day Mortality Rate - HF30 Day Mortality Rate - PN

Top 50th = Δ1 Patient

Top 10th = Δ3 Patient

Top 50th = Δ1 Patient Top 50th = Δ8 Patients

Top 10th = Δ11 PatientsTop 10th = Δ3 Patient

VBP – CMS Proposed Future Measures

• FY 2018 Program (Performance Period: CY 2016)

– Patient Experience: Care Transition

• FY 2019 Program (Performance Period: CY 2017)

– Surgical Complication: Total Hip and Total Knee Arthroplasty

FY 19 New Measure

• Added THA/TKA for 30 month performance period.

– January 1, 2015-June 30, 2017

– Baseline of July 1, 2010-June 30, 2013

• Risk standardized measure for complications after Total Hips and Knees

surgeries for up to 90 days post surgery

– One of eight complications: AMI, pneumonia, sepsis, SSI, PE, death,

mechanical complication or periprosthetic joint infection/wound infection.

– Each has a defined time frame

– Each is a ‘Yes’ or ‘No

– Risk adjusted for patient age, sex and comorbidities

44

SOURCE: August 2014 Proposed Rules Federal Register

Readmission Reduction Program

Reform Timeline

Readmission Reduction Program• 9% of Current and Future Medicare Reimbursement at Risk

– 3% penalty of Medicare Reimbursement at risk each program year

– Measured Populations 30 days from DISCHARGE

• AMI, HF, PN, COPD, THA & TKA

• August 2014: CABG Added to FY 2017

• Performance Periods: 3 Year Rolling Program

– FY’15: July 1, 2010 – June 30, 2013 – 3%

– FY’16: July 1, 2011 – June 30, 2014 – 3%

– FY’17: July 1, 2012 – June 30, 2015 – 3%

– FY’18: July 1, 2013 – June 30, 2016 – 3%

– FY’19: July 1, 2014 – June 30, 2017 – 3%

Currently participating in 3 performance periods simultaneously

How are Readmissions Measured?• Scoring Index based at 1.0• Calculate Excess Readmission Ratio

• Excess Readmission Ratio > 1 = BAD• Excess Readmission Ratio < 1 = GOOD

Facility Predicted Value

Facility Expected Value

Wisconsin RRP By Facility: FY 13- FY 15

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

1.60%

1.80%RRP %

FY 13 FY 14 FY 15

Hospital Acquired Conditions

Reform Timeline

Hospital Acquired Conditions (1% at Risk*)

• 12 Hospital Acquired Conditions Identified

– Divided in to 2 Domains

• If a hospital is in the BOTTOM QUARTILE (worst performing 25% in the country), it will be penalized a FULL 1% of Medicare Reimbursement

• Penalties will begin FY’15 (beginning October 1, 2014)

*1% After DSH, Uncompensated Care, and IME

SAMPL IPPS Reimbursement LetterPPS EFFECTIVE 10/1/2014 DRG Weight 1.00

Facility CMI 1.54OPERATING INFORMATION

Federal National Standardized Labor Rate 3,329.57Wage Index 0.8994Labor Rate x Wage Index 2,994.62Federal National Standardized Non-Labor Rate 2,040.71PPS Blended Rate 5,035.33FY 2015 Hospital Readmissions Reduction (HRR) Adjustment Factor 0.9994 5,032.30 ($3.02) RRP ReductionFY 2015 Value-Based Purchasing (VBP) Adjustment Factor 0.994348 5,003.86 ($28.44) VBP Reduction

($31.46) Per DRG Reduction

($31.46) x 1.54

($48.45)VBP & RRP Per DRG Red. CMI Adj

Disproportionate Share Adjustment (Operating) (Empirically Justified Amount 25%) 0.0691 0.02 5,090.43Disproportionate Share Adjustment (Operating) (Uncompensated Care Amount) 507.71 5,598.14Fully Loaded Operating Rate adjusted for CMI 8,346.97

FY 2015 Hospital Acquired Condition (HAC) Adjustment Factor 0.99 8,263.50($83.47)

HAC Per DRG CMI Adjusted

($131.92)Total Per DRG Reduction

Penalties & Your DRG Payment

Hospital Acquired Conditions: FY’15

First Domain: PSIsPerformance Period: 7/1/11-6/30/13

Second Domain: CDCPerformance Period: CY 2012 & 2013

Pressure Ulcer Rate CLABSI

Foreign Object Left in Body CAUTI

Iatrogenic Pneumothorax Rate

Postoperative Physiologic and Metabolic Derangement Rate

Postoperative Pulmonary Embolism and Deep Vein Thrombosis Rate

Accidental Puncture and Laceration Rate

HAC Domain Weightings: FY’15

CLABSI: 32.5%

CAUTI: 32.5%

Pressure Ulcer Rate: 8.33%

Foreign Object LeftIn Body: 8.33%

DOMAIN 1: 35% DOMAIN 2: 65%

Hospital Acquired Conditions: FY 2016

First Domain: PSIs25%

Second Domain: CDC75%

Pressure Ulcer Rate CLABSI

Foreign Object Left in Body CAUTI

Iatrogenic Pneumothorax Rate SSI Following Colon Surgery (FY 2016)

Postoperative Physiologic and Metabolic Derangement Rate

SSI Following Abdominal Hysterectomy (FY 2016)

Postoperative Pulmonary Embolism and Deep Vein Thrombosis Rate

Accidental Puncture and Laceration Rate

HAC Domain Weightings: FY’16

57

CLABSI: 32.5%

CAUTI: 32.5%

Pressure Ulcer Rate: 5.83%

SSI: 32.5%

DOMAIN 1: 25% DOMAIN 2: 75%

Hospital Acquired Conditions: FY 2017

First Domain: PSIs Second Domain: CDC

Pressure Ulcer Rate CLABSI

Foreign Object Left in Body CAUTI

Iatrogenic Pneumothorax Rate SSI Following Colon Surgery (FY 2016)

Postoperative Physiologic and Metabolic Derangement Rate

SSI Following Abdominal Hysterectomy (FY 2016)

Postoperative Pulmonary Embolism and Deep Vein Thrombosis Rate

Methicillin-Resistant Staphylococcus Aureus (MRSA) Bacteremia (FY 2017)

Accidental Puncture and Laceration Rate

Clostridium Difficile (FY 2017)

Dollars At Risk

Domain Weight At Risk On the Table

Medicare Spend Per Beneficiary 25% 745,471$ 1,562,507$

Outcomes 40% 1,192,753$ 2,500,011$ Patient Experience 25% 745,471$ 1,562,507$ Core Measures 10% 298,188$ 625,003$

TOTAL 100% 2,981,883$ 6,250,028$

VBP FY 2016

VBP FY 2016 – Sample Current $$ at Risk

Domain Weight At Risk On the Table

FY 2016

Medicare Spend Per Beneficiary 25% 745,471$ 1,562,507$ Outcomes 40% 1,192,753$ 2,500,011$ Patient Experience 25% 745,471$ 1,562,507$ Core Measures 10% 298,188$ 625,003$

FY 2017

Outcomes - 30 Day Mortality 25% 851,967$ 1,785,722$ Outcomes - AHRQ 3.75% 127,795$ 267,858$

FY 2018**

Outcomes - 30 Day Mortality 25% 851,967$ 1,785,722$

Outcomes - AHRQ 3.75% 127,795$ 267,858$

FY 2019**

Outcomes - 30 Day Mortality 25% 851,967$ 1,785,722$

TOTAL 5,793,374$ 12,142,911$

VBP Current Dollars At Risk (Active Performance Periods)

VBP – Sample Total Current $$ at Risk

All Reform – Sample Total Current $$ at Risk

Domain On the Table

FY 2016

Value Based Purchasing 6,250,028$ Readmissions COMPLETEHospital Acquired Conditions 1,703,933$ FY 2017

Value Based Purchasing 2,053,581$

Readmissions 5,111,800$ Hospital Acquired Conditions 1,703,933$

FY 2018**

Value Based Purchasing 2,053,581$

Readmissions 5,111,800$

FY 2019**

Value Based Purchasing** 1,785,722$

Readmissions 5,111,800$

TOTAL 30,886,178$

All Active Mandatory Reform

VBP – CMS Proposed Future Measures

• FY 2018 Program (Performance Period: CY 2016)

– Patient Experience: Care Transition

• FY 2019 Program (Performance Period: CY 2017)

– Surgical Complication: Total Hip and Total Knee Arthroplasty

FY 19 New Measure

• Added THA/TKA for 30 month performance period.

– January 1, 2015-June 30, 2017

– Baseline of July 1, 2010-June 30, 2013

• Risk standardized measure for complications after Total Hips and Knees surgeries for up to 90 days post surgery

– One of eight complications: AMI, pneumonia, sepsis, SSI, PE, death, mechanical complication or periprosthetic joint infection/wound infection.

– Each has a defined time frame

– Each is a ‘Yes’ or ‘No

– Risk adjusted for patient age, sex and comorbidities64

SOURCE: August 2014 Proposed Rules Federal Register

Bundled Payments

Description of Models 1 - 4

66

Models 2 and 3 are the most popular by far-

retrospective vs prospective models that include the post

acute care components

Acute

LTACH/SNF/

IRF

HHHome

Readmission

67

Bundled Payments

Model 1 and 4Model 1 is Retrospective and is all DRGsModel 4 is Prospective

Acute

LTACH/SNF/

IRF

HHHome

Readmission

68

Bundled Payments

Model 2Model 2 is RetrospectiveFor 30-60-90 days

Acute

LTACH/SNF/

IRF

HHHome

Readmission

69

Bundled Payments

Model 3Model 3 is RetrospectiveFor 30-60-90 days

 

70

The Episodes• CMS created 48 Episodes, each with up to 15 individual MS-DRG codes

• We categorized Episodes into 9 Service Lines; illustrative purposes only

• Model 2, 3, or 4 applicants may select 1-48 Episodes for testing

Spine (5) Cardiac Services (12)

Vascular Services (3)

Orthopedics (10)

Neurology (2)

Oncology / Hematology

(1)

Pulmonology (3)

General Surgery (2)

General Medicine / Internal

Medicine (10)http://innovation.cms.gov/initiatives/bundled-payments/

Advantages of Participation

• Improved quality of care for patients

– Reduced complications, readmissions, and cost

• Improved ability to work with hospitals, physicians, nursing homes, home health, rehab centers, and other providers to improve overall care quality and service

• Potential competitive advantage within market with physicians and post-acute care

• Opportunity to receive payment aligned with these goals and based on outcomes

71

 

http://innovation.cms.gov/initiatives/bundled-payments/

72

MEDICARE: Cohort 1 COMMERCIAL as of July 2014

Where are the Bundled Payments?

Early Results of BPCI Cohort 2• Tremendous increase in the

number of applications in the most recent open enrollment in April 2014: Nearly Triple!

• Models 2,3,4 were open for enrollment

• Currently in the Phase 1 period which is the non risk, decision making period. Phase 2 is when the Episode Initiator starts to accept risk

Changes In the Cohort 2 Timeline: 7/31/14

Event Original Date Revised Date*

Historical Claims & Target Pricing

Late Summer 2014

November 2014

Go/No Go Decision to Participate

November 1, 2014 January 11, 2015

Go Live with Risk January 1, 2015 April 1, 2015

Other significant changes: ADDITION OF EPISODES: You can now add episodes in

July 2015 and October 2015: only 1 episode is required for April 1, 2015. Phase 1 ends in October 2015

B-CARE: B-CARE quality data wont be collected until Spring 2015

Option for Delayed Reconciliation: Will offer a 4 quarter timeline for reconciliation.

* Revised again in October 2014

 

75

Readiness: Risk Capability

• What are your data analytics and capabilities and

ability to operationalize your quality data

• What is the maturity of your physician network and

post acute care network? What do you know about

each? What don’t you know?

• How are you doing on the VBP and RRP that are

building blocks for this? How are you going to

manage the gain sharing

• What quality metrics are you tracking and need to

improve that can be built into this program

• What internal cost sharing could you roll out with

this?

Strategic Planning: How does it all tie in?

System/Facility Strategic Plan

Clinically Integrated Networks/Post Acute Care Networks

Payment Models

MSSP/BPCI/VBP/RRP/HAC Managed Care/Direct to Employer Opportunities

76

MD• Home Health• SNF• IRF• Outpt. Rehab

Readmission

Home

$3,207 $10,129

$8,965 $616+ + + = $22,927

x 98%

$22,468

DRG Inpatient and PACS Fee for Service Model

$22,468Bundled Episodic Model

DRG 470 Total Joint Replacement w/out CCModel 2

Note: any CMI aggregate charges lower than $22,468 can be shared with providers via gain sharing model

Episodic period for model 2: 3 days prior to admission to 90 days post discharge from hospital

Gain Sharing Model

Physician

Surgeon

Anesthesiologist

Hospitalist

Outpatient Physician

Setting

Hospital

SNF

Home Health

78

Shared Reward($$)

Bundled Payment Episode Pricing and Gain Sharing

79

Target Price$13,647

Historical Cost Per Episode

$12,500

Actual FFS Cost during

Performance Period

$13,400

Settlement(Per Case)

$247

BPLNEpisode

Definitions Risk

Adjustment

Environment of Care - Hospital

(40%)$99

Physicians (35%)$86

Update factor

For illustration:3% inflation/yrDiscount = 3%

2008-2009 2013

Environment of Care - Post-acute

(25%)$62

Quality Metrics

Quality Metrics

Quality Metrics

BPCI Multiple Bonus Payments: Physicians

• 2 opportunities for Physicians to be awarded Bonuses

1. Internal Cost Savings Pool

2. Bundled Payment Savings Pool

• Both have required Quality Metrics and Cost Savings to be met

• Cost Savings MUST be directly attributed to Quality Improvement and Care

Redesign

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Outpatient Bundling…coming soon?In February 2014, CMMI issued a Request for Information on a new bundled

payment program to expand to outpatient.

Focus is Specialty Physicians and on

(1) Procedures and (2) complex chronic care

• Highlighted colonoscopy, cataract surgery, & radiation therapy for

procedural options.

• Regarding the chronic care, “CMS is considering development of a model

that would incentivize specialists to more efficiently manage the care

provided to beneficiaries with complex or chronic medical conditions over

the period of time that corresponds to the specialty practitioner’s long term

involvement with managing the beneficiary’s care.”

• Was seeking responses until March 13

Outpatient Bundling

• Referred to by CMS as: “Comprehensive Ambulatory Payment Classification

(APC)”

• Finalized in the CY 2014 OPPS/ASC Final Rule

• Affect payments to 4,000 hospitals and 5,300 ASC’s

• Delayed implementation to January 1, 2015 instead of the traditional outpatient

October 1 implementation date

– Extra time allowed the Agency, hospitals, and physicians more time to evaluate

and comment on the policy

Outpatient Bundling – Comprehensive APC’s

• Single Medicare payment rather than individual APC payments throughout the episode

• 25 Bundled Outpatient Procedures• Proposed Payment could include all hospital

services reported on the claim covered under Medicare Part B for up to a proposed 6 Month Period– Few exceptions resulting in a single

beneficiary copayment per claim

Outpatient Bundling – Proposed Procedures

No.Clinical Family

Proposed CY 2015 APC

APC Title

Proposed CY 2015 APC Geometric Mean Cost

1 AICDP 0090 Level II Pacemaker and Similar Procedures $ 6,961.45 2 AICDP 0089 Level III Pacemaker and Similar Procedures $ 9,923.94 3 AICDP 0655 Level IV Pacemaker and Similar Procedures $ 17,313.08 4 AICDP 0107 Level I ICD and Similar Procedures $ 24,167.80 5 AICDP 0108 Level II ICD and Similar Procedures $ 32,085.90 6 BREAS 0648 Level IV Breast and Skin Surgery $ 7,674.20 7 CATHX 0427 Level II Tube or Catheter Changes or Repositioning $ 1,522.15 8 CATHX 0652 Insertion of Intraperitoneal and Pleural Catheters $ 2,764.85 9 ENTXX 0259 Level VII ENT Procedures $ 31,273.34

10 EPHYS 0084 Level I Eletrophysiologic Procedures $ 922.84 11 EPHYS 0085 Level II Eletrophysiologic Procedures $ 4,807.69 12 EPHYS 0086 Level III Eletrophysiologic Procedures $ 14,835.04 13 EYEXX 0293 Level IV Intraocular Procedures $ 9,049.66 14 EYEXX 0351 Level V Intraocular Procedures $ 21,056.40 15 GIXXX 0384 GI Procedures with Stents $ 3,307.90 16 NSTIM 0061 Level II Neurostimulator & Related Procedures $ 5,582.10 17 NSTIM 0039 Level III Neurostimulator & Related Procedures $ 17,697.46 18 NSTIM 0318 Level IV Neurostimulator & Related Procedures $ 27,283.10 19 ORTHO 0425 Level V Musculoskeletal Procedures Except Hand and Foot $ 10,846.49 20 PUMPS 0227 Implantation of Drug Infusion Device $ 16,419.95 21 RADTX 0067 Single Session Cranial Stereotactic Radiosurgery $ 10,227.12 22 UROGN 0202 Level V Female Reproductive Procedures $ 4,571.06 23 UROGN 0385 Level I Urogenital Procedures $ 8,019.38 24 UROGN 0386 Level II Urogenital Procedures $ 14,549.04 25 VASCX 0083 Level I Endovascular Procedures $ 4,537.95 26 VASCX 0229 Level II Endovascular Procedures $ 9,997.53 27 VASCX 0319 Level III Endovascular Procedures $ 15,452.77 28 VASCX 0622 Level II Vascular Access Procedures $ 2,635.35

Thank you!

Contact Information:

Melinda Hancock

Melinda.Hancock@dhgllp.com

(804) 474-1249

86

Affinity Groups

• Current

– Large System CFO Council

– Large System Revenue Cycle Council

– Strategic CFO Council

• Being Formed

– CMMI Bundled for Care Improvement Council

– Payer Focused Affinity Group

• Newly Formed and Actively Meeting

– Health Care Economics Professional Council

– Physician Group Practice Executive Council

– Strategy Executive Council

– Academic Medical Center CFO Council

87

Master Level Seminars

• Chicago, IL | Dec. 8-10, 2014

– Beyond Big Data: Developing a Business Intelligence and Analytics Practice

– Population Health Management and the Next Generation of Clinical Integration

• Washington, DC | Feb. 18-20, 2015

– Population Health Management and the Next Generation of Clinical Integration

– Transparency, Metrics, and Communication: Proven Practices for Revenue Cycle Strategies

• Seattle, WA | March 25-27, 2015

– Beyond Big Data: Developing a Business Intelligence and Analytics Practice

– Transparency, Metrics, and Communication: Proven Practices for Revenue Cycle Strategies

Improve the Billing and Payment Experience for Patients

88

hfma.org/dollars

89

Price Transparency Task Force

90

Enhance Price Transparency

• Clarifies basic definitions that are often misused

• Sets forth guiding principles

• Establishes roles for payers, providers, others

• Reflects consensus of key stakeholders

hfma.org/dollars

91

Demystify Price Information for Consumers

• Describes how to request price

estimates, step by step

• Clarifies what estimates may or

may not include

• Explains in-network and

out-of-network care

• Defines key terms

• Available for posting on your

website at no charge

• Hardcopies available for purchase

in bulk at a nominal price through

AHA’s online storehfma.org/transparencyahaonlinestore.org

Best Practices Address Key Issues

92

Provision of Care

Registration and Insurance

Verification

Financial Counseling

Patient Share

Prior Balances (if applicable)

Balance Resolution

93

Achieve Recognition as an Adopter of Best Practices

• Recognition demonstrates commitment to best practices in patient financial communications

• Based on HFMA review of an application and supporting documentation

• All provider organizations may apply

• Recognition valid for two years

• Adopters may use the phrase “Supporter of the Patient Financial Communications Best Practices” in their marketing materials

94

Leading the Change from Volume to Value

• Defining and delivering value

• Key organizational capabilities for building value

• Organizational road maps

hfma.org/valueproject

New Report Extends Value Resources to Reflect Industry Realignment

Acquisition and Affiliation Strategies

Acquisition andAffiliation Strategies

Current State & Future Directions of Value

Value InHealth Care

HMFA’s Value Project

Four Key Capabilities for Value

Building Value-DrivingCapabilities

HMFA’s Value Project

Defining &Delivering Value

Defining andDelivering Value

HMFA’s Value Project

Organizational Road Maps for Value-Driven Health Care

The Value Journey:Organizational Road Maps forValue DrivenHealth Care

HMFA’s Value Project

hfma.org/valueproject

96

Career StrategiesHFMA Resources

“Choose a job you love, and you will never have to work a day in your life.” Confucius

Take Advantage of HFMA Resources

97

98

Leadership…Your personal plan…what does it

really mean?

“Leadership has nothing to do with titles; it has everything to do with,

“Do you inspire other people? Do they want to follow you?

Do they want to be with you?”-Tom Atchison, author of

Followership: A Practical Guide to Aligning Leaders and Followers

99

Be an Exceptional Leader

• Well cultivated self awareness

• Compelling vision• A real way with people

• Masterful execution

100

Be “Great by Choice”

• 10ers are extremely disciplined– They use empirical data and

continually plan for the “what if”

• The take the 20 Mile March– Performance markers and self

imposed constraints

• Fire bullets instead of cannonballs. – Only shoot cannon balls after

testing.

• Show great financial constraint

• Zoom out – then zoom in.

“You cannot lead without knowing the needs of your people—what drives them, what makes them do what they do; then you can give them opportunities to succeed based on their own psychology of success.”

Kerry Gillespie, FHFMA, vice president, operations, Community Health System, Inc., Brentwood, TN, and

a member of HFMA’s Tennessee Chapter

101101

Develop Your Leaders…

102

Everyone Is a Leader….

Everyone in this room is a leader. I’m asking each of you to renew your commitment to leading our industry forward, to ensuring its long term viability and quality.Together, we CAN improve health care. Together, we can and we must• Mentor young professionals as we have been mentored,• Rise above the uncertainty and frustration of today, and• Work in partnership with our colleagues throughout the

industry to lead the change.Kari Cornicelli

HFMA National Chair 2014/2015

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New Skills for A Leader

• Convening collaborative efforts

• Making decisions on behalf of your organization

• Commitment to move the alliance forward

• Confidence that the alliance will "get to its destination"

Trend Toward Collaboration Across Traditional Boundaries

1. A common pain (a shared problem)

2. A convener of stature (an influential leader)

3. Representatives of substance with authority to make

decisions

4. Leaders committed to move the alliance forward

5. A clearly defined purpose

6. Established rules

7. Confidence that the alliance will

"get to its destination"

8. A shared pool of reliable information

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8 Key Elements Required for Successful Collaboration

Source: 2013. Mike Leavitt and Rich McKeown. Finding Allies, Building Alliances: 8 Elements That Bring…and Keep People Together

105

Leading Change- Summary