Acquisition and Contracting Risk Management Guide for DOD Acquisition Government Report Jun
Risk contracting
34
RISK CONTRACTING It’s the new game in town! LGC+D LLP | 10 Weybosset Street, Suite 700, Providence, RI 02903 | 401-421-4800 | 401-421-0643 fax | www.lgcd.com
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Transcript of Risk contracting
RISK CONTRACTING It’s the new game in town!
LGC+D LLP | 10 Weybosset Street, Suite 700, Providence, RI 02903 | 401-421-4800 | 401-421-0643 fax | www.lgcd.com
Be the Voice!
Presenter
Presentation Notes
Today’s conference challenge - Be the Voice Make lives better today and in the future Look at aging and services from a new perspective Survive and thrive in a rapidly changing landscape
WHAT IS CHANGING?
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Presentation Notes
What is changing? FY16 State budget $18M in nursing home cuts Eliminating COLA in October 2015 3% across the board cuts effective 7/1/15 $5M in additional cuts – Reinventing Medicaid $5.4M in managed care cuts (Neighborhood, United) – impact on nursing home capitated RHO rate is unclear
HOW TO SURVIVE AND
THRIVE?
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Presentation Notes
How to survive and thrive? Promote quality Protect reputation Get paid for what you provide Get paid enough for what you provide
VALUE PROPOSITION
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Presentation Notes
Consider value proposition A promise of value to be delivered An acknowledgment and belief from your customer that value will be delivered It is the primary reason a prospect will buy from you
WHY IS IT IMPORTANT?
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Why important? Values (goals) help drive strategy Funding helps pay for strategy
SELF-EVALUATE
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Self-evaluation – What is your value proposition? How do you fund the strategy?
WHAT IS RISK CONTRACTING?
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Presentation Notes
What is risk contracting? 30+ years in the making Spread the risk of doing business among providers and payors A major adjustment in payments and incentives
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Presentation Notes
To whom does risk contracting apply? Discuss payors and risk elements for each Medicare Medicaid FFS Medicaid capitation Managed care Private Other
0%
5%
10%
15%
Private Medicare Other Days Hospice Blue Cross Veterans Adm13% 8% 5% 4% 2% 1%
Census Mix
Note: Medicaid portion of census mix is 67%
Data Source: LGC+D, LLP 2013 Rhode Island Nursing Home Cost Array
Presenter
Presentation Notes
Consider census days by payor Which of these relate to risk contracts?
FINDING SUFFICIENT FUNDING
• Waiting on chart
CONSIDER AVERAGE REIMBURSEMENT RATE RANGES
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Presentation Notes
Consider average reimbursement rate ranges for each payor and frequency of rate changes
$203 - $811
$152 - $448 $264 - $291
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
Medicare 10/1/2014 Medicaid 10/1/2014* Semi-private Rate 2013
Rhode Island Revenue Per Day Ranges
*Excludes FRV and property taxes Data Source: LGC+D, LLP 2013 Rhode Island Nursing Home Cost Array
Presenter
Presentation Notes
Medicare Medicaid FFS Private Not shown - Medicaid capitation Managed care
CURRENT TRENDS
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Presentation Notes
Current trends include Focus on acuity Capture everything you do in the clinical record Train staff to understand the importance of charting Optimize revenue Focus on cost containment
EVOLVING AND FUTURE FOCUS
BUNDLED PAYMENTS AND ACCOUNTABLE CARE ORGANIZATIONS
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Presentation Notes
Bundled payments and accountable care organizations Define Why formed? Episode of care vs. location of care Cost containment across the continuum Major tenets A la carte vs. prix fixe Expectations Fewer complications Fewer readmission Fewer infections These are examples of risk contracts. Developing capabilities and infrastructure to take on these risks will help position for continued success Gaining increasing momentum
DRAMATIC CHANGES ANNOUNCED BY MEDICARE – VALUE OVER VOLUME
Presenter
Presentation Notes
Reinvent Medicaid Focus on high cost / high utilization population Focuses on overutilization Pay for value not volume Improve quality, affordability and efficiency Medicare – January announcement of dramatic changes Moving from volume to value in payments How will value be quantified?
HOW THE CHANGING LANDSCAPE AFFECTS SUPPLY
AND DEMAND
Presenter
Presentation Notes
Input and reviews for the changing landscape Demand side Consumers – one price, coordinated team, clarity Employers – lower health care costs, reduced absenteeism Supply side Providers – cost savings and commitment to expanding Health insurers – undercurrent of skepticism
HOW TO UNDERSTAND AND EVALUATE RISK AND PERFORMANCE
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How to understand and evaluate risks and performance?
WHAT YOU NEED TO KNOW
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Need to know True costs of taking care of the patient What is the full cost of care and how do we capture cost savings? How do we calculate this?
SYSTEM CHANGES – WHAT DOES THIS
MEAN?
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We come from FFS systems that are designed to process claims every time a service / patient day was provided at a set rate based on cost Now we have to operate alongside or outside these systems Need to understand the contract provisions – how are we being measured? Need to understand historical data –what are the benchmarks? Need details. Cost accounting needs are stronger than ever.
THE DEVIL IS IN THE DETAILS
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The devil is in the details Data Census Earned rate Paid rate Cost allocations / discrete costing
New service providers are building businesses around publishing care protocols and providing sophisticated IT tools
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Presentation Notes
New service providers are building business around Publishing care protocols Providing sophisticated IT tools
EVALUATIVE REPORTS
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Presentation Notes
And we have new tools -evaluative reports Program for Evaluating Payment Patterns Electronic Report (PEPPER) Avalere Market analysis reports derived from detailed analysis of Medicare data Hospital readmissions One year analysis of RI Medicare FFS beneficiaries – state average 30 day readmission rate - 21.9 Number of 30 day readmissions - 1713 Number of admissions to SNF from a hospital – 7822 OIG reports acute readmissions from SNFs to hospital varies significantly based on quality rating and geography More than 3 stars generally has a 4 percentage point better rate when compared to 3 stars or less National average – 25% high – Louisiana; Low - Hawaii
Presenter
Presentation Notes
PEPPER report – Summarizes provider-specific data for Medicare services that may be at higher risk for improper Medicare payments
WHAT ABOUT THE DATA?
Presenter
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Data What is the cost of providing care under each contract? Is the computer system designed to capture and report this data? What info is most useful? Is the info timely? What is the utilization? How does cost match the reimbursement? What do we currently have and how do we use it?
Total Medicare Medicaid / Hospice
Private Other
Census 100.00% 8.21% 71.29% 12.50% 8.00%
Total CPD 353.27 PT 4615 MCR (6.14) 6.14
MCD (4.41) 4.41 Pvt (3.80) 3.80 MCD other (0.11) 0.11
ST/OT 4715 MCR (6.68) 6.68 MCD (7.92) 7.92 Pvt (2.11) 2.11
net w/o therapies 322.10 Average therapy CPD 12.82 12.33 5.91 0.11
Discrete therapy CPD, by payor 31.17 156.15 17.30 47.28 1.38 add non-therapy portion 322.10 322.10 322.10 322.10 322.10
Discrete cost by payor 353.27 478.25 339.40 369.38 323.48
Cost per Day – Therapy Discrete Cost
Presenter
Presentation Notes
Discrete cost analysis Most SNFs have designed the chart of accounts to match Medicaid cost reporting This focused on carving out costs that are specific (and variable) to each payor population See how this information can be used to better understand therapy costs by payor Discuss analysis and results
$322.10 $322.10 $322.10 $322.10 $322.10
$31.17
$156.15
$17.30 $47.28 $1.38
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Total Medicare Medicaid / Hospice Private Other
Cost per Day – Therapy Discrete Cost
Non-Therapy Portion Therapy Discrete Cost
Overall Cost $353.27
Discrete Cost $478.25
Discrete Cost $339.40
Discrete Cost $369.38
Discrete Cost $323.48
Data Source: LGC+D, LLP 2013 Rhode Island Nursing Home Cost Array
Presenter
Presentation Notes
Data What is the cost of providing care under each contract? Is the computer system designed to capture and report this data? What info is most useful? Is the info timely? What is the utilization? How does cost match the reimbursement?
DISCRETE COST ANALYSIS
IMPACT ON CONTRACT DISCUSSIONS AND RENEWALS
Presenter
Presentation Notes
Impact on contract discussions and renewals Use data to develop an effective strategy focused on outcomes make effective decisions ask the right questions
Questions? Visit our blog for this PowerPoint and my notes! http://www.lgcd.com/category/cpa-for-everyday/
Pamela L. Sawin, CPA, Principal | [email protected]
LGC+D LLP | 10 Weybosset Street, Suite 700, Providence, RI 02903 | 401-421-4800 | 401-421-0643 fax | www.lgcd.com
