Quality, Cost and Business Intelligence in Healthcare

Maitri Vaidya Population Health Executive

DBA, MHA, CPHQ May 2016

Where are we going?

IHI Triple Aim

Improve the patient experience of care

Lower the per-capita cost of care

Improve the health of populations

Comprehensive Joint Replacement (CJR) Bundled Payment

A Holistic Approach

Financial and Population Impact

Source: Administration on Aging, Department of Health & Human Services

• #1 most common inpatient

surgery for Medicare

beneficiaries2

• 400,000 procedures /yr

• $7 Billion per year

• Private payer

reimbursement (procedure

only): $32,0003

• Medicare reimbursement

(surgery thru recovery): up

to $33,000

People Over Age 65 (Millions)

Unable to drive for 4-6 weeks1

Recovery: 30-90+ days

Post-op complications <5%

Take antibiotics prior to dental

procedures/cleanings for life

Personal Impact

Pain relief in 95% of individuals

Hospital stay ~2-5 days

Will I set off metal detectors?

• When can I go back to work? • How long will my new hip last? • Am I going to become addicted to pain

medication? • Can I still play ball with my grandkids? • When is my next PT session?

How do we affect the quality of outcomes and the cost of care?

Organizational Coordination Organizations Incorporating

• Population Health • Revenue Cycle • Multiple Service Lines

– Clinical – Devices – Post-acute

Focused On • Continuum of care • Programmable intelligence • Analytics and reporting • Leverage evidenced based care and model

experience through the episode • Personalized care (risk and delivery)

• Physician, nurse, facility and allied professional care teams

– PCMH – Post-acute venues – Financial efficiency

• Member/patient experience – Personalized – Through the complete episode – Patient satisfaction

• Quality reporting – Provider and care plan adherence – Regulatory and payor

Regulatory Overview

News Release January 26,2015

“CMS has set a goal of tying 85 percent of all traditional Medicare

payments to quality or value by 2016 and 90 percent by 2018 through

programs such as the Hospital

Value Based Purchasing and the Hospital Readmissions Reduction

Programs.”

Sylvia Mathews Burwell

Secretary of HHS

Comprehensive Care for Joint Replacement (CJR)

Will impact reimbursement for MS-DRGs 469 and 470

Bundled payment for all services tied to lower extremity joint replacements / reattachments (e.g. knee replacement)

New Bundled Payment Program

Program Timing

Two-Sided Risk Model

Begins April 1, 2016

through December

31, 2020

Goal to keep episode cost

below target cost

Hospitals can share in the

savings, or Hospitals may

have to pay back

overpayments based on

target prices

Eligibility

Short term acute care hospitals paid under the IPPS

Hospitals in Maryland are excluded

Hospitals participating in BPCI Models 1, 2, or 4 are excluded

Hospitals are included based on their location in a Metropolitan Statistical Area (MSA) as defined by OMB at a county level

• This requires that the MSA have an urban core population of at least 50,000

• List of affected MSAs and counties can be found here

Episode Definition

Begins with admission to an eligible hospital for a LEJR

• MS-DRG 469 is major joint replacement or reattachment with MCC

• MS-DRG 470 is major joint replacement or reattachment without MCC

Includes most Medicare Part A or B 90 days post discharge

• A few exceptions are listed related to certain chronic conditions

• Exceptions are the same as for BPCI LEJR

• A list of exclusions by ICD-9 (will be updated to ICD-10) can be found here

An episode will be excluded if:

• A patient is admitted to another hospital for MS-DRG 469 or 470

• A patient dies during the hospitalization

• A patient initiates an LEJR episode under Models 1, 2, 3, 4

Beneficiary Notice

• Information/Education on CJR and services

• Retention of freedom of choice

• Explain patient access to records through portal or blue button

• Advise beneficiaries that protections remain in place and give them 1-800 number

Notice must contain

• Hospitals need to provide notification on admission

• Physicians in a sharing agreement need to provide information on the CJR program when surgery decision is made

Must be provided by:

EHRs may be used to retain documentation that notification was provided

CMS will provide model notices, but these do not have to be used

Risk Limits (Stop-Loss/Stop-Gain)

2016 2017 2018 2019 2020

TARGET PRICE TARGET PRICE TARGET PRICE TARGET PRICE TARGET PRICE

5% 5%

5%

10%

20

%

20

%

10%

20

% 20

%

Risk Limits (Stop-Loss/Stop-Gain)

2016 2017 2018 2019 2020

Stop-Loss 0% -5% -10% -20% -20%

SCH, MDHs, RRCs Stop-Loss

0% -3% -5% -5% -5%

Stop-Gain 5% 5% 10% 20% 20%

Stop-Loss = Risk Cap * (target price * # of MS-DRG episodes)

Stop-Gain = Risk Cap * (target price * # of MS-DRG episodes)

Target Episode Prices

Target prices will be created for each MS-DRG

Target prices will be provided before each reporting period

There will be 8 target prices 2016 and 2019-2020 (16 for 2017 & 2018)

Target price created for January through September and for October through December

Regional and hospital specific episode prices are capped at 2 standard deviations over the mean

Application of Discount • $20,000 pre-discount in 2017 • 20,000*.03=$600 • Discounted Target Price – $19,400

• In 2017 and 2018, special repayment discount • 20,000*.02=$400 • Discounted repayment target - $19,600

• $200 per episode safe zone between

repayment and shared savings

Quality Composite Scoring

Quality Composite Score Quality Rating Adjustment

20.0 - 13.2 Excellent 1.5% Reduction in Discount

13.2 - 6.0 Good 1% Reduction in Discount

6.0 - 4.0 Acceptable No Reduction in Discount

4.0 - 0 Below Acceptable No Reduction in Discount; Cannot Share in

Savings

THA/TKA Risk Standardized Complication Rate

30 days post discharge

HCAHPS

Voluntary Patient Reported Outcome

(Voluntary)

10 points

8 points

2 points

20 Total available points:

Quality Scores Assigned

Percentile THA/TKA RSCR HCAHPS

≥ 90th 10 points 8 points

≥ 80th and < 90th 9.25 points 7.40 points

≥ 70th and < 80th 8.5 points 6.8 points

≥ 60th and < 70th 7.75 points 6.2 points

≥ 50th and < 60th 7 points 5.6 points

≥ 40th and < 50th 6.25 points 5 points

≥ 30th and < 40th 5.5 points 4.4 points

< 30th 0 points 0 points

Keeping Costs Down

Cost Sharing Agreements Hospitals can enter into Cost Sharing Agreements to share

the risk/rewards with community providers.

Beneficiary Incentives Hospitals can provide incentives to patients to help

advance the patient’s clinical goals.

• Cannot be a loan or require

referrals for business

• Hospital must retain

responsibility for 50% of

total cost

• No CJR Collaborator can

take on more than 25%

• Hospital is responsible for

enforcement of participants

Cost Sharing Agreements

Beneficiary Incentives

$

• Incentive must be closely tied to and advance a clinical goal

• Incentive cannot induce a beneficiary to choose a specific hospital or provider

• Incentives are capped at $1,000 • The hospital must retain

ownership of any incentive over $100

• You still cannot pay for referrals • Incentives must be in kind, not

cash

CMS Enforcement Mechanisms

A warning letter

Corrective Action Plan (drafted by

the hospital)

Forfeiture of reconciliation

payments

Increase of 25% in

recoupment payments

Termination from the program

Waiver of Certain Medicare Requirements

Waiver of “incident to” requirement

CMS does not allow in-home services unless they are

provided by home health or the provider.

This waiver (CJR only) allows provision of in-home services given by the

provider’s care team for up to 9 times during episode.

Waiver of Telemedicine requirements

Telemedicine is allowed only for certain geographic areas

and must be in a required originating site (i.e. doctor’s

office)

This waiver (CJR only) allows telemedicine services to be provided from the patient’s

home, regardless of geographic area.

Waiver of SNF 3 day inpatient

stay requirement

CMS requires that patients must have an inpatient stay

of at least 3 days to be eligible for a SNF.

This waiver (CJR only) allows a patient to be transitioned

to a SNF without a 3 day inpatient stay. The SNF must have at least 3 stars in CMS’s

quality rating system.

Managing a CJR Episode of Care

CJR Strategic Alignment

Episode Identification Activating clinical, financial and operational tools to

identify CJR patients.

Stratified Engagement Modeling Risk-based deployment of care team resources

across the continuum of care.

Patient-Centric Care Navigation Guiding data-driven patient choice, facilitating

interaction and streamlining patient care planning.

Device Integration Actively monitoring biological data to proactively

identify deviations and provide clinical intervention.

Risk Mitigation Utilizing quality care & defined clinical protocols to

proactively manage patient complications.

Overview

Robust Clinical Integrati

on

Financial Manage

ment

Data-driven

Intelligence

cost

quality

population

Regulatory Compliance

CJR Program Overview

Inpatient Predictive Modeling

Procedure Admission

Length of Stay MS-DRGs

Care Management

Orthopaedic

s

Transition Post-Acute

90 days

Preadmit

3 days

Population Health Management

Data-driven Process Improvement

CMS

Req

QUALITY REPORTING

STAR

ratings

analytics

Hospital Eligibility

Beneficiary Eligibility

Target Pricing

Episode Targeting

Quality Measures

CMS

Req

Performance Year

Pricing

Medical Home

CMS

Req

CMS

Req

Data

Monitoring

CMS

Req

What we do… How we do it…

Why it is important

Reporting and Analytics

Capabilities and Services Optimize ROI Drive to Outcomes

(Services) Outcomes

Strategic Foundation

An internal understanding for the

use, sourcing and governance of

data across the enterprise

Needs Capabilities

Data approach to risk

stratification and personalized

care plans

Aggregated clinical dashboards

Analytics and reporting being

predictive and care plan

compliance

Dashboards or reports that

support the potential for

Collaboration Agreements

EDW

Interoperability

Financial

Analytics and Reporting

• Define current

state

• Establish

critical KPIs

• Define future

state (short,

mid and long

term)

• Define and

manage to

meet and

exceed KPIs

within defined

timeframe

• Develop

meaningful

reports that are

actionable

towards care

transformation

Services

Population Health

Executive alignment

SME consulting for

defined gaps through

data

Clinical

Reduced variance and

improved patient care

and safety through

reduced variance

Enterprise wide

approach ensures

continuity of care

Financial

High quality care being

delivered in a cost

effective fashion

Reduced penalties

through unnecessary

readmissions

Reduced cost through

length of stay waivers

CJR Preadmission, Registration and Acute Stay Components

Capabilities and Services Optimize ROI Drive to Outcomes

(Services) Outcomes

Strategic Foundation

Comprehensive market and client

assessment and alignment

Needs Capabilities

Data approach to risk

stratification and personalized

care plans

Member portals

Electronic medical record (EMR)

Aggregated clinical dashboards

Analytics and reporting being

predictive and care plan

compliance

Best practice based on

procedures or conditions

Patient activation

EDW

Interoperability

Regulatory

• Beneficiary notification

• Proof of delivery and archived for

audit

Analytics and Reporting

• Define current

state

• Establish critical

KPIs

• Define future

state (short,

mid and long

term)

• Define and

manage to

meet and

exceed KPIs

within defined

timeframe

• Solution

coaching

Services

Regulatory workshop

Strategic assessment

Program management

Population Health

Executive alignment

Continuous Performance

Improvement

Workflow optimization

Solution coaches

Continuum alignment

Value Added Services

Beneficiary incentives

Concierge services

Clinical

Reduced variance and

improved patient care

and safety through

reduced variance

Enterprise wide

approach ensures

continuity of care

Financial

High quality care being

delivered in a cost

effective fashion

Reduced penalties

through unnecessary

readmissions

Reduced cost through

length of stay waivers

Meet regulatory

requirements

Member Experience

Client/member

satisfaction

Member engagement

Reduced hassle in

navigating the health

care system

Follow the Money

Revenue Cycle

• Claims are submitted no differently than with other Medicare Beneficiaries.

• Claims are aggregated and analyzed against all targets. May come under target for one and go over target for another -> net impact per episode of care.

• Annually around 2Q, CMS will pull in episode data and run through algorithms take out the outliers.

• After analyzing MS-DRGs and Hip Fracture status, CMS compares to target prices and makes decision on cost reconciliation.

• End of 2Q, send out risk/reward notification. – Anchor hospital to manage with all providers contracted with Cost

Sharing Agreements. – Percentages on slide 26.

• Two Reconciliations for each contract year of CJR Program duration:

Fundamental Framework

CMS /

Payers

CMS /

Payers

& Providers

Providers

Providers

IHI Triple Aim

Improve the patient experience of care

Lower the per-capita cost of care

Improve the health of populations

The Future of Healthcare

Thank you!

Maitri Vaidya

Maitri.Vaidya@cerner.com