Safety Net APM Workgroup forAdvancing Delivery & Payment Reform

December 12, 2018 Webcast

Agenda

• AACHC, CVN, & SNAC Overview

• Presentation- Measurement for Alternative Payment Methodologies

• Tony Rogers– Health System Leader and APM Extraordinaire

• Next steps- APM Readiness Assessment; survey(s) sent out

• Next educational event, please mark your calendar:• AACHC and CVN annual conference February 11-13, 2019

Arizona Community Health Centers

Arizona

• Population of 7+ million

• Nearly 114,000 square miles

Arizona Community Health Centers:

• 230+ individual sites

• Located in 14 of the 15 counties

• Served over 680,000 patients in 2017

• Provide over 2.3 million annual visits

Mission

Strategic Goals

25 Full Members

9 Associate Members

• 21 FQHCs

• 2 FQHC-LAs

• 1 RHC

• 1 Urban Indian Program

11 Active Peer Networking Committees

• Value Based Reimbursement

• Position Health Centers as

Primary Care Providers of Choice

• Innovative Practice Models

• Health Informatics

• Position Health Centers as

Employers of Choice

To promote and facilitate the development and delivery of affordable and accessible community oriented, high-quality, culturally effective primary

healthcare for everyone in the state of Arizona. This will be accomplished through advocacy, education and technical assistance.

Mission

Business Objectives

• Collaboration across communities for affordable quality health care

• Statewide community-based patient-centered primary care network

• Data-based benchmarking and decision making

• Demonstrable value-based care through QI, health outcomes, and lower costs

• Fiscally sustainable operations to meet continued growth in populations served

Business Model

To foster collaborative business activities which enhance Community Health Centers’ individual abilities to serve their communities to meet the

needs of Arizona’s uninsured, underinsured and underserved.

• 18 CVN Corporate Members

• 19 HCCN Participating Health Centers

• 17 HAN Participating Provider Entities

AACHC

Associate Members

FQHC-LAs

FQHCs

RHCs

Sponsors

Primary Care Association

Advocacy for BPHC Grantees

Support CHC Services throughout AZ

11 Peer Networking (QI, CFO, etc.)

Technical Assistance, Education & Training

CVN

FQHC-LAs

FQHCs

RHCs

Implementation of “Best Practices”

Integrated Data Management

Integrated Services Network

Clinical Integration (IPA)

Other Collaborative Business Services

Clarifying AACHC and CVN Roles

Advancing Delivery & Payment Reform

National Safety Net Advancement Center

The National Safety Net Advancement Center (SNAC) aims to transform the ability of U.S. safety net organizations to respond to payment and care delivery reform efforts in health

care’s fast evolving financial and delivery environment. This will be accomplished by leveraging new and existing knowledge into actionable tools for safety net organizations.

SNAC is supported by the Robert Wood Johnson Foundation.

Safety Net Advancement CenterSafety Net APM Workgroup

SNAC is providing CVN funding to facilitate a collaborative effort to advance a Payment Reform Strategy for Safety Net providers in Arizona that supports

• Achievement of the Quadruple Aim in health care transformation

• Future operational/financial sustainability of patient-centered value-based primary care through these organizations

The Safety Net APM Workgroup’s approach to advancing Delivery and Payment Reform will be to identify APMs that support a Value-based Transformation Framework which interlinks value-based “Quadruple Aim” goals with four domains of primary care clinical operations: care delivery, operating infrastructure, people and funding. These APMs should support and promote patient-centered value-based primary care

Safety Net APM WorkgroupOrganizational Participants and Stakeholders

Participants: Arizona Safety Net provider organizations able to participate in APM

FQHCs and FQHC-LAs; Behavioral Health Organizations; and Arizona

Tribal Health Organizations

Stakeholders: Other provider and non-provider organizations enabling successful Delivery & Payment Reform

• Acute Care Providers (CIPNs, Hospitals, Specialists, etc.)

• Community-based Agencies and Organizations

• Health Plans (multiple product lines), ACOs, AHCCCS and CMS

• Health Care Associations (e.g., AACHC, AZ Council for Behavioral

Health, Arizona Tribal Health Council, AzDA, etc.)

Safety Net APM WorkgroupCycle One Project Goals

• Identify the driving forces of Delivery and Payment Reform

• Define current APMs in use and available to Safety Net providers

• Discuss the challenges and barriers to Safety Net providers’ participation in Delivery and Payment Reform and strategies that may address them

• Provide tools for a self-assessment of the Safety Net organization’s readiness and adaptability to Delivery and Payment reform

• Recommend a Value-based Transformation Framework for identifying and prioritizing “next steps” toward Delivery and Payment Reform

Vision for Safety Net APMsValue-Based Transformation Framework

Safety Net APM Workgroup

Identify and prioritize opportunities to advance integrated patient-centered

value-based care through the efficient and effective application of resources across all domains of primary care operations and improve financial sustainability through alternative payment methodologies that give recognition to achievement of the

Quadruple Aim.

Safety Net APM Workgroup

Webinar Series

Date Time Topic

September 26th 12:30-1:30 Kick-off Meeting: APM Methodology for Value Based Care

October 24th 12:30-1:30 How Do You Assess Your Organization’s Readiness

November 14th 12:30-1:30 Strategies and Activities to Achieve Readiness

December 12th 12:30-1:30 Measurement for Alternative Payment Methodologies

Measurement for Alternative Payment Methodologies

Tony Rodgers

CVN Chief Strategy Officer

Topics To Be Covered

I. Background: Alternative Payment Models

II. Payer and Provider Alignment Around Common Performance Measures

III. Performance Measure Development and Use

IV. Performance Measure Benchmarking and Results Reporting

V. Cost and Service Utilization Benchmarking

VI. Summary

14

Background: Alternative

Payment Models

15

Alternative Payment Models Alternative Payment Models requires “two to tango”:

1. The Payer’s role:

Establishes an alternative payment method

Establishes an agreement or contract with willing providers

Determines the quality/outcome and financial performance requirements to earn alternative payment

Determines which patients are eligible

Performs the patient attribution or assignment to the participating network providers or healthcare organization

Collect data and evaluate performance against benchmarks

Establish a process to accurately pay the alternative payment

2. The Participating Provider (Network or Healthcare Organization):

Meet the contract performance requirements (i.e. quality/outcome and cost performance benchmarks).

Cost effectively manage the care of assigned/attributed patients.

Provide the required data and performance information to the payer.

Alternative Payment Models (APM) refers to a provider payment

arrangement that is used as an alternative to a straight Fee for

Service payment method. Alternative payment is a term coined by

Medicare and is CMS’s version of value-based payment.

APM payment arrangements require agreement between a payer

and a either a participating provider, provider network, and/or

healthcare organization.

Alternative payment arrangements have two key elements:

1. A set of quality or outcome measures and benchmarks.

2. Embedded financial risks and rewards that are based

on the total cost of care performance.

16

Economic Principles Underlying Alternative Payment Methods

Alternative Payment Methodologies are demand side healthcare management and cost containment strategies, designed to financially incentivize providers to be accountable for the efficient used of resources and for the management patient’s total cost of care.

Alternative payment places healthcare providers at shared financial risk for both cost (resource utilization) and as well as achievement of desired healthcare outcomes (quality performance).

The behavioral economic principles behind alternative payment methods:

1. Shared Financial Risk- will encourages healthcare providers to manage cost, improve quality, and use healthcare resources more efficiently.

2. Clinician Accountability- Healthcare provider become the de facto point for controlling unnecessary service utilization and cost, which means providers should benefit from savings earned by their efficient use resources and management of cost.

3. Aligned Performance Priorities and Goals- Payers and healthcare providers have aligned financial incentives around common performance goals and priorities.

4. Continuous Performance Improvement- Healthcare providers have an embedded economic incentive in alternative payment to continually improve performance in both cost and quality.

17

The Specific Purpose of Alternative Payment

Arrangements

Alternative payment methods are designed to enable healthcare providers or healthcare organizations to:

Improve care for patients who are receiving a specific treatment or medical procedures.

Improve care during a specific time periods or cycle of care for patients who have a specific health condition or combination of conditions.

Deliver more coordinated, efficient care for patients who have a specific condition or are receiving a specific treatment or medical procedure.

Improve the efficiency of care and/or outcomes for patients receiving care for multiple chronic conditions or at multiple provider sites in the healthcare delivery system.

Improve care for patients with specific conditions or who are in early stages of a condition to prevent the conditions progression to a more acute stage.

Improve care for the health conditions of a population of patients, or to prevent the development of health problems in a population of patients with particular risk factors.

Support delivery of innovative model of care or a different mix of services that reduce acute care utilization and cost for a population or group of patients.

Better align healthcare provider payment with patient health outcomes.

18

Types of Alternative Payment Models

Common alternative payment arrangements:

Shared Savings without Downside Risk: Pays providers a share of the savings generated by achieving quality and reducing total the cost of care for an assigned/attribute population of patients.

Shared Saving with Downside Risk: Pays net savings or recoups net losses earn by the participating providers for assigned or attributed patients.

Bundle Payment: Pays the provider one all-inclusive rate for a bundle of services provided for a specific patient’s medical condition or for a specific medical or surgical procedure. This type of payment may include a withhold or bonus by the payer to assure that quality measures are met by provider.

Episode of Care: An episode of care payment pays the provider a set all-inclusive payment for a scope of services for a specific medical condition over a specific time period (e.g. an episode of care payment for prenatal, delivery, and post partum care).

Global Payment: A global payment is usually a pre-paid capitated payment provided for the provision of a scope of services provided to a defined population (e.g. patients with HIV/AIDS). The provider organization have financial risk for the provision of a define scope of services to a specific population of assigned patients. This type of payment is usually considered for a high-risk chronically ill patients, who can benefit from effective care management and care coordination.

Alternative payment methods may continue to

use Fee for Service in the construction of the

provider payment arrangement For example:

1. Financial incentives and penalties may be

applied to the Fee for Service payment.

2. Fee for Service rates may be used to

establish financial benchmarks for shared

savings.

3. Fee for Service schedule may be used as

the basis for a bundled, episode of care

payment, or to determine a global all-

inclusive payment.

19

Key Factors in Designing Alternative Payment Methods

Key Components of Alternative Payment Arrangements

Payer Attribution

Assignment

Methodologies

The process used by the payer to attribute or assigned a patient to an accountable provider.

The attribute/assignment can impact the healthcare provider’s ability to meet the quality

measure benchmark. Attribution parameters can include:

The criteria used to determine which providers are eligible for patient assignment

The minimum and maximum length of time (in months) that the patient is

attributed/assigned to the provider for the purpose of performance reporting and

alternative payment.

Patient opt-in opt-out criteria

Patient’s knowledge and compliance with attribution or assignment to the provider

Quality Measures

and Benchmarks

The population appropriate measures and benchmarks used to compare and evaluate quality

performance.

Total Cost of Care

Benchmark

The average per beneficiary per year total cost of care baseline or target as determined from

previous years claims data.

Risk Adjustment

Factors

The formula and factors used to stratify patient by risk categories or logical risk groupings and

application of these factors to make risk adjustments equitable to providers as it relates to

total cost of care performance.

Scope of ServicesThe scope of services that are included in the alternative payment arrangement on which the

total cost of care benchmark analysis is based.

Provider

Accountability

The method used to determine the specific providers financial and quality performance

accountability.

Data Collection

Reporting

Requirements

The specific data sources, data types and data sets must be collected and analyze to validate

provider quality and cost of care performance results.

20

Payers and Providers Alignment Around Common

Performance Measures

21

Alignment Around

Healthcare Value

22

Value-based care requires the alignment of payers/health plans, and providers around common sets of performance measures that in aggregate represent “value”.

Healthcare Value is measured by cost, quality/outcome, and patient experience.

To evaluate the healthcare value provided to patients, payers and health plans establish performance measures and benchmarks.

Performance measures represent a proxy for healthcare value.

Value may be segmented into performance ranges that differentiate levels of value (e.g. poor, acceptable, better, and best).

In addition, payers must be mindful of creating significant additional administrative burden and operational costs for themselves and healthcare providers.

Alternative payment methods (aka value-based payment) have embedded financial incentives to align providers to payer performance improvement priorities.

Outcomes from the

Care Process

Efficient Resource Used Containment of

Service Cost Reduction of

Unnecessary or Preventable Service Utilization Reduction in

Administrative Burden and Cost

Evidence-based Management of Illness and Disease Better Health

OutcomesPopulation Health Improve Patient

Functional StatusImprove Wellness and

Quality of Life

Payers, Health Plans, and Providers Seek Alignment

Around the Domains of Healthcare Value

Domains of Healthcare Value

Cost of Care

Improve Patient Experience with CarePatient SafetyCompliance with Care

& TreatmentPatient and Caregiver

Engagement in Care Reduction of Patient

Risk Factors

Patient and

Caregiver Experience

23

Payers establish performance

measures as a “proxy” for

value.

Alternative payment methods

are used to align providers to

the performance improvement

priorities of payers.

Performance Measures

Performance measurement is a process that uses claims, clinical, or self-reported data to calculate standardized measurements of performance.

Standardizing performance measurements make it possible to compare performance improvement year to year, or between providers or health systems.

The level of quality performance is determined using standardized measures of one or more aspects of care that are believed to be important in achieving specific patient outcomes.

Cost performance is measure of the change in the total cost of care from one performance period to the next, starting with a baseline total cost of care that is calculated from previous period aggregate cost and utilization for a similar population.

Patient experience with care is usually calculated from patient responses to standardized patient experience surveys.

In addition to CMS and other federal healthcare agencies, there are several national healthcare organizations and professional societies that are involved in developing quality and outcome measures that can be used by payers for care of specific medical conditions and populations of patients.

Individual quality/outcome measures are typically calculated using standardized formulas with a numerator (individuals receiving specific care/treatment), denominator (number of individual eligible for the specific care/treatment), from which a performance value is calculated.

Measure results are usually shown as a ratio, a percentage, or numeric score (as in the case of a composite score).

Payers have some discretion on determining the performance benchmark or target for each required performance measure.

24

Types of Quality Measures

Types of Quality Measures Used with Alternative Payment Models

Measure Type Description

Appropriate UseThis is a measure of the use of a medical equipment, medical procedure, medication, treatment or process based on

the patient condition or medical need. For example, appropriate use antibiotics for Otitis Media if a previous chest x-

ray was performed.

Composite

Combination of two of more individual measures into a single measure with a single score. The information can be

greater than the sum of its parts because it paints a more complete picture. This measure type is typically used to

evaluate a “cycle of care” for a patient with a specific chronic or medical condition.

Cost/Resource Use A measure of the amount, usually specified in dollars, related to receiving, providing, or paying for medical care.

Resources use measure focus on the effective use of goods or services that are combined to produce medical care.

They are inputs that have a price assigned to them.

Efficiency Measures that combine factors of cost and quality. At a given level of quality, services can be highly efficient or

inefficient. Improved efficiency comes from providing high-quality healthcare at lower cost.

OutcomeOutcome measures assess the results of healthcare that are experienced by patients. They include endpoints like

well-being, ability to perform daily activities, or even death. An intermediate outcome measure assesses a factor or

short-term result that contributes to an ultimate outcome, such as having an appropriate cholesterol level.

PRO-PM OutcomePRO-BASED PERFORMANCE MEASURE (PRO-PM): a way to aggregate the information that has been shared by

the patient and collected into a reliable, valid measure of health system performance. Patient reported outcomes can

include patient self-report experience with care, patient self-assessment, etc.

ProcessProcess measures are indications of what a provider does to maintain or improve health, either for healthy people or

for those diagnosed with a health care condition

Structural Structural measures are measures of infrastructure in the care setting such as: physical elements, EHR and

information systems, procedural and workflow capability and capacity to provide high-quality care.

Intermediate Clinical

Outcome

Measure of a preliminary or initial stage patient outcome.

25

The Role of Alternative Payment in Aligning Payer’s and Provider’s Quality Priorities

Alternative payment methods is a financial mechanism for aligning payer and providers to common quality performance priorities.

Organizational Entity Role

HHS and other Federal

Healthcare Agencies

Establish national strategy, priorities, and goals

National Quality Organizations

and Profession Societies

Develop, maintain, propagate, and evaluate quality

measures

Payers (Including Employers) Set specific quality performance priorities and

targets and use alternative payment to incentivize

improved quality and outcome performance.

Health Plans Apply payer quality priorities, assesses the services

provided by the health plan and the overall

performance of providers in the plan’s network.

Report overall quality results and use alternative

payment arrangement to incentivize improvement in

quality performance and outcomes.

Healthcare Provider Networks

and Organizations

Assesses the overall quality performance of

providers in their networks and healthcare

organization, report quality performance, and

support continuous quality improvement efforts.

Individual Providers Provide data for quality reporting, participate in

quality improvement efforts, align healthcare

practices with to achieve quality benchmarks.

26

AHCCCS Goal for Alternative (Value-Based) Payment

AHCCCS requires its Medicaid managed care health plans to phase-in alternative value-based payment methods for their contracted provider networks over the next four years.

AHCCCS’s goal is that eventually 80% of AHCCCS healthcare providers will be paid using some form of alternative payment.

AHCCCS believes that alternative value-based payment should:

1. Incentivize and reward healthcare providers for performance improvement and cost containment

2. Align healthcare providers to AHCCCS performance improvement priorities.

27

Performance Measure Development and Use

28

What Goes into Designing Quality Performance Measures?

Measure Description: A short description of the measure and measure parameters

Numerator Statement: An explanation of which patient types or clinical events are included in the measure numerator. e.g. patients readmitted with 30 days of hospital discharge

Denominator Statement: An explanation of patient types or clinical events that are included in the measure denominator e.g. all patient admitted to hospital during the performance period

Exclusions: A explanation of what specific condition related to patient types, clinical events, or measure parameter that would exclude the data from being included in the numerator or denominator for measure calculation. e.g. patients that are readmitted under a second diagnosis

Risk Adjustment: Determination of whether the measure is to be risk adjusted

Classification: How is the measure classified

Measure Type: Define the measure type: e.g. Process, Measure, Composite, Outcome Measure etc.

Measure Format: Description of the format of the measure e.g. percentage, average, number, ratio, aggregate score etc.

Use in Federal/State Program: Is the measure used by a federal program e.g. Medicare, Medicaid, HRSA, or other

Condition: Description of the relevant medical condition the measure is targeting

Non-Condition Specific: Description on non-condition specific events or activities the measure is targeting e.g. Care Coordination of high-risk patients, Readmissions, Care Planning Transitions of Care, Safety, Overuse

Care Setting: Description of the care setting the measure is relevant for e.g. hospital, primary care site, skill nursing facility etc.

National Quality Strategy Priorities: Describe which National Quality Strategy Priorities the measure is addressing

Actual/Planned Use: Describe how the measure is or will be used e.g. Quality Improvement (external benchmarking to organizations), Quality Improvement (Internal to the specific organization), value-based payment arrangement quality measure, etc.

Data Source: Description of the source of data that will be used in the measure calculation e.g. Claims, EHR clinical data, Other

Level of Analysis: A description of the level that the analysis for the measure will be applied e.g. clinic/provider level, provider network level, population specific level, service area, statewide, national

Target Population: Description of the relevant target population the measure is focused on e.g. Children, Elderly, Patient with person with specific chronic illness, dual eligible beneficiaries

Measure Steward and Contact Information: Who is the measure sponsor e.g. CMS, State Medicaid, Health Plan, NCQA, HRSA etc. 29

National Quality Forum (NQF)Measurement Development Process

The Department of Health and Human Services establish broad strategies and priorities for quality performance and population health outcomes.

Medicare and Medicaid contract with organizations like the National Quality Forum to help design and promulgate common quality measures in both the private and public healthcare sectors.

Professional groups and foundations also contribute to the quality measurement portfolio of NQF.

NQF provides excellent documentation and training materials on their quality measures.

30

CMS Vision for Measure Development

31

CMS supports measure alignment across federal, state, and private programs.

CMS is interested in promoting efficient data collection of measure-related data and in improving population health.

CMS will continue to work towards balancing individual and shared provider accountability.

Measures should address critical clinical gaps in care, support evidence-based medicine, and should engage patients as well as clinicians in care delivery.

Measures should promote healthy living, assist in a better understanding of a patient’s overall health, promote coordinated care, and help in reducing disparities in healthcare.

Publicly reported measures should help consumers make informed decisions regarding their healthcare and choice of clinician, facility, and services.

CMS Measure Development Process

Determine

Basis for

Measures

Develop a

work planDefine Measure

Topics

Technical

Advisory

Panel (TEP)

Develop a

Framework for

Measure

Construction

Search for

Existing

Measures

TEP Confirms Measure

Appropriateness &

Framework

Public Comment

if deemed

necessary

Public Comment

on Test

Measures

Conduct

Measure

Testing

TEP evaluates

list of measures

Develop list of

candidate

measures

CMS Approves

recommended

measures

Develop

measure detail

specifications

CMS Approves

Final Measures

Consensus

Endorsement, if

deemed necessary

Consider Sending

for Consensus

Endorsement

Measure Ready For

Use

21

63 4 5

10

987

11 12 1314

18171615

32

CMS Measure Development Priorities

Person and caregiver-centered experience and outcomes: Measures that address the experience of each person and their family; and the extent to which they are engaged as partners in their care.

Patient Reported Outcome Measures (PROMs). Measures of person or family-reported experiences about their involvement and active engagement with the health care team as a collaborative partnerships with providers and provider organizations.

Communication and care coordination: Measures of the promotion of effective communication and coordination of care; and coordination of care and treatment with other providers.

Efficiency/cost reduction: Measures that address the affordability of health care, including unnecessary health services, inefficiencies in health care delivery, high prices, fraud, and measure value over volume.

Patient Safety: Measures that address an explicit structural element, process, outcome intended to make care safer. Measure should be based on evidence that the presence or absence of such structural element or process has been shown to cause harm in the delivery of care.

Appropriate use: Measures that address appropriate use of services and resources, including measures of over use.

33

Example of Medicaid Core Measure Set for Children

Primary Care Access and Prevention Measures

NQF # Measure

Steward

Measure Name

0024 NCQA Weight Assessment and Counseling for Nutrition and Physical

Activity for Children/Adolescents – Body Mass Index Assessment for

Children/Adolescents (WCC-CH)

0033 NCQA Chlamydia Screening in Women Ages 16–20 (CHL-CH

0038 NCQA Childhood Immunization Status (CIS-CH

0418/

0418e

CMS CMS Screening for Depression and Follow-Up Plan: Ages 12–17

(CDF-CH)

1392 NCQA Well-Child Visits in the First 15 Months of Life (W15-CH)

1407 NCQA Immunizations for Adolescents (IMA-CH)

1448 OHSU Developmental Screening in the First Three Years of Life (DEV-CH)

1516 NCQA Well-Child Visits in the Third, Fourth, Fifth and Sixth Years of Life

(W34-CH)

NA NCQA Adolescent Well-Care Visits (AWC-CH)

NA NCQA Children and Adolescents’ Access to Primary Care Practitioners

(CAP-CH)

Quality measure in Medicaid are:

1. Core measures are developed

and approved by CMS.

2. State Medicaid agencies have

discretion on which measures

they include in the State Medicaid

Quality Strategy.

3. Medicaid agencies can also

develop their own state specific

quality measures.

4. The state Medicaid agency may

use the quality measure as part of

a provider incentive payments

program.

5. State Medicaid agency may

delegate the monitoring and

alignment of provider quality

performance to Medicaid manage

care plans.

34

Performance Measure Benchmarking and Results Reporting

35

Establishing Quality Benchmarks for Alternative Payment Arrangements

A Quality Measure Benchmark represents a specific level or range of quality performance.

Payers establish quality benchmarks to differentiate acceptable from non-acceptable provider quality performance.

Payers should be transparent about the construction and design of their quality measures and any performance grouping approach they will use to evaluate and compare provider performance.

A quality benchmark can be a single value, such as a minimum performance target, a range of values, or grouped by quartile, decile etc.

Benchmarking is typically used as part of alternative payment to establish performance targets that demarcate where a financial bonus or penalties will be applied, or the required performance for a provider to become eligible for shared savings.

Multiple quality benchmarks can be used as part of a composite scoring approach.

36

Calculating Quality Measures Results

Name of Measure Data Elements Description of Elements in Measure Calculation

Measure Name:Name or Title of the Measure

Measure ID:An alpha and/or numeric provided to create a Measure ID

Submission Method: The method used to submit measure data or information (e.g.

electronic EHR file, claims data file, attestation etc.)

Measure Type:Alpha or numeric code given that identifies the type of measure e.g.

(process, appropriate use, outcome, etc. )

Benchmark:

An indicator for whether a measure is to be compared to benchmark

or is part of an initial benchmark analysis.

Y = Yes, the measure is included in benchmark analysis

N = No, the measure is not included in benchmark analysis

Standard Deviation:Calculate a standard deviation of performance rate(s)

AverageCalculate average performance rate(s)

Decile data ranges and ending range

Ten equal groups into which a quality results can be divided

according to the equal distribution of values The lower and upper

bound of decile data range(s) to be used and end data range

Topped Out

Measure that have reach the top of their possible performance level

are indicated as “Topped Out”.

Indicate whether or not a measure is topped out.

Y = Yes, the measure is topped out

N = No, the measure is not topped out

Special Scoring

Indicate whether or not a Topped-Out Measure will receive special

scoring.

Y=Yes, the measure is capped.

N=No, the measure is not capped.

Other Scoring Adjustment or Criteria

Indicates additional measure results screening criteria or numeric

adjustments that are applied the final quality score or to the

performance results. 37

Example of Decile Performance Grouping

Diabetes Foot Exam Measure (EHR Submission Method)

Decile Quality Measure

Benchmarks

(In Percent)

Possible Points

Added to

Composite

Score

Below Decile 3 <5.31 3

Decile 3 5.31-10.90 3-3.9

Decile 4 10.99-19.99 4-4.9

Decile 5 20.00-29.26 5-5.9

Decile 6 29.27-38.77 6-6.9

Decile 7 38.78-50.09 7-7.9

Decile 8 50.10-62.60 8-8.9

Decile 9 62.61-76.16 9-9.9

Decile 10 >=76.17 1038

Example of Quality Performance Results

Measure Title Measure

ID

Submission

Method

Measure

Type

Benchmark Standard

Deviation

Average Decile

Range

3

Decile

Range

4

Decile

Range

5

Decile

Range

10

Topped

Out

Diabetes:

Hemoglobin A1c

(HbA1c) Poor

Control (>9%)

1 Claims Outcome Yes 21.7 2233.33-

23.54

23.54-

18.25

18.24-

14.30<=3.3 No

Controlling High Blood

Pressure236 Claims Process Yes 18.1 71.4

58.02 -

63.90

63.91 -

68.36

68.37 -

72.91

>= 94.07No

Weight Assessment

and Counseling for

Nutrition and Physical

Activity for Children

and Adolescents

239 EHR Process Yes 13.9 30.321.69 -

26.09

26.10 -

28.86

28.87 -

30.47>= 40.78 No

Colorectal Cancer

screeningPPRNET18* Registry/QCDR Process Yes 17.4 60.9

46.82 -

51.65

51.66 -

56.97

56.98 -

62.00>= 80.95 No

* NOTE: Measure ID PPRNET18 is a measure sponsored (Measure Steward) by the PPRNet Foundation, which is a member-based

organization whose purpose is to improve the health of the American people by helping primary care clinicians provide evidence-based high-

value quality care.

39

Example of AHCCCS MCO

Quality Measures Benchmarks

MCO Adult Measures

Measure Description Minimum Performance

Standard

Inpatient Utilization Inpatient Days/1000 (IPU) - All Ages 33/1000 Member Months

Ambulatory Care - ED Utilization (AMB) - All Ages 55/1000 Member Months

Plan All-Cause Readmissions (PCR) 11%

Breast Cancer Screening (BCS) 50%

Cervical Cancer Screening (CCS) 64%

Chlamydia Screening in Women (CHL) 63%

Colorectal Screening (COL) 65%

CDC - HbA1c Testing 77%

CDC - HbA1c Poor Control (>9.0%) 41%

CDC - Eye Exam 80%

Timeliness of Prenatal Care: Prenatal Care Visit in the First Trimester or Within 42 Days

of Enrollment (PPC)

64%

Timeliness of Prenatal Care: Postpartum Care Rate (PPC) Baseline Year

Mental Health Utilization (MPT) - All Ages Baseline Year

Use of Opioids From Multiple Providers (UOP) Baseline Year

Use of Opioids at High Dosage in Persons Without Cancer (OHD) Baseline Year

AHCCCS establishes quality measures for

its Medicaid managed care organization.

This includes:

1. National and state specific quality

measures.

2. It establish state specific performance

benchmarks (minimum performance

standards) for its MCOs.

3. AHCCCS expects MCOs to use the

AHCCCS quality measures in value-

based alternative payment

arrangements.

4. MCOs have the discretion to also add

their own quality measures and

benchmarks to alternative payment

arrangements.

40

Quality Measure Transparency

At a minimum payers/health plans should provide the following information to participating providers on each of the quality measures used in alternative payment arrangements:

Description of each quality measure: A statement describing the measure.

Type of measure: Process, composite, structural, outcome, etc.

Data Source(s): The data source (s) that will be used to compile the health care providers performance results.

Target Population: A description of the population that measure is a targeted at.

Denominator: A description of the subset of patients or health plan members for whom a measure is relevant (measure denominator).

Numerator: A description of the healthcare provider’s eligible patients or health plan members for whom the quality measure will be applied.

Exclusions: A description of health plan eligible members that are excluded from the denominator or the numerator.

Frequency: The number of times or frequency the patient is eligible to receive the service during the performance period (once a month, at each visit etc.)

Performance Period: The time frames associated with those achieving the performance target for the patients to be included in the numerator.

Weighting: Any weight given to a quality measures (a percent between 1% and 100%) as a measure of priority that health plan applies to the specific quality measure. The higher the weight the more important the measure.

Scoring Method: The description of the timeframe and score method that the health plan will used to determined the healthcare provider raw performance score for each measure. .

Benchmark: The specific performance target percentage, ration, range, or numeric score that has been set by the health plan as the benchmark for quality performance.

Minimum Level of Participation: The minimum number of patients that must be included in the denominator to have a statistically valid performance score.

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Healthcare Cost and Utilization Benchmarking

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Benchmarking Cost and Utilization for Target Patient Population

Category of Services

Service Utilization and Cost for Target Group of Patients

Average Units of Services Per Patient

Per Year Cost Per Unit

of ServicePer Patient

Cost Per Year

Inpatient Service 3.6 days $1,250 $4,500.00

Outpatient Hospital 4.5 visits $165.00 $742.50

Emergency Room Visits 1.2 visits $445.00 $534.00

Primary Care 3.2 visits $85.00 $272.00

Specialty Care 2.4 visits $135.00 $324.00

Prescription Drugs 56 scripts $45.00 $2,520.00

Laboratory Services 25 tests $38.00 $950.00

Imaging and Radiology 3.2 procedures $205.00 $656.00

Other Institutional 0.8 days $185.00 $148.00

Case Management 3.5 units $45.00 $157.50

Other Medical Services 4.5 services $55.00 $247.50

Average Annual Per Beneficiary Total Cost of Care Benchmark

$10,694.50

An Example of Cost and Utilization Benchmarking

Cost and Service Utilization The payer determines the target cost and

utilization benchmark based on the estimated average

per beneficiary expenditures of the target population of

patients using previous period claims data.

The benchmark should also be adjusted for:

Service and cost trend factors

Service carve out

Benefit or healthcare policy changes

Risk factors

Efficiency discounts or other contingencies (e.g.

reinsurance)

The cost of care benchmark is used as the target to

compare the actual cost performance of the participating

providers and determine the level of cost savings

necessary for the payer share a portion of the net

savings with providers. The cost benchmark is also used

to determine the amount the payer is willing to pay in a

bundle, episode, or global payment arrangement. 43

Modeling Cost and Utilization for a Target Population of Patients

Financial model assumptions include:

The alternative model of care will reduce unnecessary acute care and other service utilization and costs.

The model of care intervention is applied to the entire target population in the “service area”.

Some categories of service utilization and cost will go up while others will go down.

The results of the model intervention will be sustainable.

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Target Change in

Patient Population Cost and Utilization

Current Total Cost Baseline :

$3,968 PMPY

New Total Cost Level

$3,838 PMPY3.3% SAVINGS

Additional Cost of the

Alternative Model of

Care Intervention

$90 PMPY

PLUS

Net cost and utilization reduction from new model: $220 PMPY

MINUS

EQUALS

TOTAL UNITS UNIT COST TOTAL COST OF CARE

Services Per 1000 Beneficiaries Expen Per Baseline Pro Forma

SERVICE BASKET Baseline % Change Pro Forma Service PBPM PBPM

Inpatient hospital

Acute inpatient 2,200 admits -10.0% 1,980 admits $9,100 $1,668 $1,502

Post-acute care

Skilled nursing 400 admits -7.0% 372 admits $13,000 $433 $403

Inpatient rehab 95 admits 95 admits $15,000 $119 $119

Inpatient LTCH 20 admits 20 admits $32,700 $55 $55

Home Health 550 episodes 10.0% 605 episodes $5,500 $252 $277

Total PAC $859 $854

Other benefits/services

OP services 6,200 events -7.0% 5,766 events $630 $326 $303

Emergency room 1,100 visits 1,100 visits

Evaluation & Mgmt 30,000 visits 15.0% 34,500 events $90 $225 $259

Procedures 6,500 events 6,500 events $325 $176 $176

Imaging 7,500 events 7,500 events $85 $53 $53

Lab tests 15,000 events 15,000 events $25 $31 $31

Other tests 4,000 events 4,000 events $35 $12 $12

Prescription Drugs/vac. $360 $360

DME 2,000 events 2,000 events $150 $25 $25

ASC proced. 700 events 700 events $415 $24 $24

Hospice 200 admits 200 admits $9,200 $153 $153

Other 55.0% $56 $87

Total Medicare Cost of Care $3,968 $3,838

Financial Modeling of Cost and Utilization

for Alternative Payment

Cost Benchmarking Medicaid/CHIP Performance

Health Care

Expenditures by

Categories of

Services

Medicaid/CHIP Total Cost of Care

Adult Child Dual Eligible (Only) Disabled/Elderly

PMPM Cost

Benchmark

Estimated

Actual PMPM

Cost for

Performance

Year

PMPM Cost

Benchmark

Estimated

Actual PMPM

Cost for

Performance

Year

PMPM Cost

Benchmark

Estimated

Actual PMPM

Cost for

Performance

Year

PMPM Cost

Benchmark

Estimated

Actual PMPM

Cost for

Performance

Year

Inpatient Hospital $ 300.00 $ 220.00 $ 250.00 $ 170.00 $ 4,000.00 $ 4,500.00 $ 4,000.00 $ 2,500.00

Outpatient Hospital $ 150.00 $ 110.00 $ 130.00 $ 55.00 $ 100.00 $ 130.00 $ 100.00 $ 130.00

Emergency Dept $ 60.00 $ 45.00 $ 70.00 $ 30.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00

Prescription Drugs

(Outpatient)$ 100.00 $ 110.00 $ 20.00 $ 30.00 $ 100.00 $ 120.00 $ 100.00 $ 120.00

Professional Primary

Care $ 400.00 $ 460.00 $ 240.00 $ 275.00 $ 400.00 $ 500.00 $ 400.00 $ 500.00

Professional

Specialty Care $ 150.00 $ 130.00 $ 50.00 $ 75.00 $ 1,500.00 $ 1,500.00 $ 1,500.00 $ 1,500.00

Diagnostic

Imaging/X-Ray$ 20.00 $ 10.00 $ 10.00 $ 20.00 $ 250.00 $ 250.00 $ 250.00 $ 250.00

Laboratory Services $ 7.00 $ 10.00 $ 2.00 $ 7.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00

Dialysis Procedures $ 50.00 $ 50.00 $ 10.00 $ 10.00 $ 200.00 $ 220.00 $ 200.00 $ 220.00

Professional Other $ 50.00 $ 40.00 $ 10.00 $ 20.00 $ 200.00 $ 220.00 $ 200.00 $ 220.00

Skilled Nursing

Facility$ 100.00 $ 60.00 $ 10.00 $ 10.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00

Home Health $ 20.00 $ 30.00 $ 20.00 $ 30.00 $ 300.00 $ 300.00 $ 300.00 $ 300.00

ICF/MR $ 20.00 $ 15.00 $ 30.00 $ 25.00 $ 200.00 $ 200.00 $ 200.00 $ 200.00

Home and

Community-Based

Services

$ 50.00 $ 75.00 $ 20.00 $ 25.00 $ 300.00 $ 500.00 $ 300.00 $ 500.00

Other $ 20.00 $ 30.00 $ 20.00 $ 30.00 $ 150.00 $ 170.00 $ 150.00 $ 170.00

Total $ 1,497.00 $ 1,395.00 $ 892.00 $ 812.00 $ 8,450.00 $ 9,360.00 $ 8,450.00 $ 7,360.00

Net Savings $ 102.00 $ 80.00 $ (910.00) $ 1,090.00

Medicaid Cost Benchmarking is used in

conjunction with alternative payment

arrangements:

1. Medicaid managed care plan determine

the per member per month or per year

benchmark based on previous year

experience.

2. At a minimum is important to separate

benchmarks for each major population

group.

3. The cost benchmark should have any

adjustments, trend factors or withholds

already applied to the benchmark.

4. The healthcare providers participating in

the alternative payment need to

managed cost below the benchmark in

order to receive a share of the net

savings.

5. There must be a minimum of 5,000

patients assigned/attributed from each

Medicaid group (adult, children, Dual

etc.) for the share savings to be

actuarially sound.

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Provider Accountability for Cost and Utilization Performance in Alternative Payment Arrangements

Inherent in an alternative payment arrangement is the healthcare provider’s accountability for one or more of the following aspects of cost and utilization management:

1. Controlling total healthcare cost from the provision of all services that individual patients receive that are related to their condition, risk factor(s), or medically necessary treatment.

2. Controlling the aggregate total medical expenditures from the provision of services to population of patients receive.

3. Improving long-term performance on measures of healthcare cost and utilization, that are primary drivers of total healthcare expenditures in the population that are related to prevention of a condition, risk factor, or future acute care service or high cost treatment.

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Summary

47

Uses of Quality and Performance Measures

48

Evaluate Best

Practices

Evaluate Cost and

Service Utilization

against Benchmark

Distribution of Financial

Incentives or Penalties

Among Providers

Negotiation with

Payers Related to

Value-Based

Arrangements

Provider Network

Performance

Profiling

To Establish

Performance

Improvement Priorities

Regulatory

Reporting

Public Reporting of

Performance

Consumer and

Marketing Information

Payer Quality

Improvement

Initiatives

Distribute Financial

Incentive or

Penalties

Provider Network

Scorecards

Create Quality &

Cost Performance

Dashboard

Internal Organizational Use of Performance Measures

Payer and External Use of Performance Measures

Consumer

Information to

Facilitate Choice

Alternative Payment

Shared Savings

Distribution

Provider

Recognition

Summary Take Aways

Although there are various alternative payment arrangements, they all attempt to drive quality performance and healthcare cost reduction by financially incentivizing healthcare provider performance improvement.

CMS is using alternative payment models in Medicare and Medicaid to align health plans and healthcare providers to national quality priorities.

Broad adoption of alternative payment methods is believed to be the best way to hold health plans and providers accountable for improving quality performance, containing costs, and reducing unnecessary service utilization in Medicare and Medicaid.

There needs to be greater transparency by payers regarding on how performance measures and benchmarks are developed and evaluated.

Managing quality performance and healthcare cost will require effective use of analytical tools and performance data by healthcare providers to be able to focus their performance improvement efforts.

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Our Team

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