TriZetto 2011 PPT Template (FINAL)Title: TriZetto 2011 PPT Template (FINAL).ppt Author:...
Transcript of TriZetto 2011 PPT Template (FINAL)Title: TriZetto 2011 PPT Template (FINAL).ppt Author:...
Confidential | Copyright © 2012 The TriZetto Group, Inc. 1
Key Operational Challenges for Payers and Providers in a Payment Bundling ProgramJay SultanAssoc. Vice President General Manager for Payment ReformThe TriZetto Group
2 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Alternate Payment Methodologies (VBR) A Continuum of Provider Risk
Fee for Service
Fee for Service Plus P4P or Shared Savings
Episode of Care / Payment Bundling
Partial Capitation
Global Capitation
Provider Sophistication
Pro
vide
r Ris
k
3 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Agenda
Has Payment Bundling worked?Has Payment Bundling worked?
Implementation Status - Moving Beyond Talking
Payer Operational Challenges
Provider Operational Challenges
4 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Win-Win-Win-Win
Payer CMS received 5% discount (average) Technical risk shifted to providers
HospitalDecrease in cost (7% average) per caseIncreased market share (40% in one quarter)Saved $4.3M net over 18 months ($2k/case)
Physician130 of 150 physicians receiving 25% increasefee-for-serviceGreater increase available (up to 100%)if CMS cap removed
PatientImproved patient quality measurementImproved patient satisfaction$300-$1100 per patient cash incentive from CMS
Early Results Reported by Select CMS ACE Hospitals
5 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Other Results from Payment Bundling
HCFA Bypass Demonstration Project“Only project to deliver
significant savings”
HCFA Cataract Care5% reduction in cost with
no quality reduction
Commercial Project in Michigan: Arthroscopy
with WarrantyPayer saved money, provider made more
money, quality improved
Medicare Project in Texas:
Various Cardiovascular Procedures
Reduced cost to half of then-current Medicare
Commercial Project in Pennsylvania:
Cardiac Care + WarrantyPayer cost reduced, 44% reduction in readmissions
6 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Agenda
Has Payment Bundling worked?
Implementation Status Implementation Status –– Moving Beyond TalkingMoving Beyond Talking
Payer Operational Challenges
Provider Operational Challenges
7 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Who are the PlayersThis presentation is based on
the speaker’s personal experiences at:
Few of these are in production yet, so this is not a complete view
Two hospital systems who have implemented ACE
Five commercial payers who are currently implementing commercial bundling programs and their participating provider
organizations, as well as two provider organizations developing payment bundling on their own
Payers ranging from 120k members to 2.4M membersProvider organizations a mix of surgical groups, hospitals, and IDNs
8 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Episode Designs
There has been a lot of variation
In some cases, episode designs are more complex - especially in regard to technical implementation - than originally considered
Two payers are using Prometheus
One is using both designs created by their state
and IHA episodes
One has created their own episodes, with their providers,
based on a combination of IHA and Prometheus
One is planning to use straight IHA episodes
9 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Including Lines of BusinessGenerally, everyone wants to include
as many as possible
However, exceptions do occurHowever, exceptions do occur Specific problem areas includeSpecific problem areas include
All exclude dental, optical, secondary insurance, workman’s comp, etc.
No one has included FEP
ITS
ASO business out of state
Programs run for the state
10 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Prospective and Retrospective Payments
Prospective PaymentTransforms care. Immediate nature creates a stronger incentive to change behavior.
Immediate ROI. Contract sets fixed discounts that the payer gains when care is delivered.
Greater cost predictability. The episode of care cost is fixed and can be budgeted by the payer.
Reduced payer and provider tension. Contracting is transparent and explicit. No question about what’s in or out.
More immediate feedback to providers. Providers know what and when they will get paid.
Considerable disagreement
between Prospective
and Retrospective
Three payers are paying prospectiveOne payer is paying retrospectiveOne payer is paying prospective for some and retrospective for others
Retrospective: Fee-for-service is simply paid; after months have passed, episodic performance is evaluated and pay-for-performance bonus paidProspective: Episode of care payments paid when claims submitted (example: fee-for-service claims from providers paid as a multi-provider global case rate)
11 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Sources of National Standard Bundle Definitions
CMS / ACECMS / ACE IHAIHA Prometheus (2012) Prometheus (2012) Heart Bypass or Valve - Major
Heart Bypass or Valve - Minor
Insertion of Heart Defibrillator
Insert Stent in Heart
Pacemaker
Hip /Knee Replacement
Hip Replacement
Knee Replacement
Outpatient Heart Stent
Non-emergent Diagnostic Cardiac Catheterization; Angioplasty with Stent
Knee Meniscectomy
Partial Knee Replacement
Maternity (2012)
Spinal Fusion (2012)
Hysterectomy (2012)
Diabetes CHF COPDAsthmaCADHTNGERDAMIStrokePneumoniaHip Repl / Knee Repl,CABGBariatric SurgeryColon ResectionAngioplasty (PCI)Knee arthroscopyHysterectomyCholecystectomyColonoscopyPregnancy & Delivery
State of Arkansas (2012) State of Arkansas (2012) Pregnancy
Attention Deficit Disorder
Hyperactivity Disorder
Type 2 Diabetes
Back Pain
CHF (acute)
Upper Respiratory Infection
Long Term Care and Prevention
12 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Specific Challenges to be Addressed
PayersPayers ProvidersProviders
Processing claims
Provider contracting
Member responsibilityand Payment Bundling
Determining what riskyou can manage
Cost accounting limitations
Distributing a bundledpayment among providers
13 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Agenda
Has Payment Bundling worked?
Implementation Status - Moving Beyond Talking
Payer Operational ChallengesPayer Operational Challenges
Provider Operational Challenges
14 Confidential | Copyright © 2012 The TriZetto Group, Inc.
It takes 3-12 months to create an episode
payment program at a payer
New workstreams are a good idea, to focus on mitigation and impact to:
It is necessary to create analytics for both the plan use
and to share them with your providers prior to contracting
and during the program
Even sophisticated payers struggle with the idea of
administration of ‘unbundling’ payments and calculating /
distributing performance dollars
General Themes
Claims processingBenefits and product designReports and BIClinical edits
15 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Payment Bundling Implementation is Far More than Installing NxPBA
Product developmentActuary/UnderwritingBenefit designASO considerationsEligibility changes during an episodeSeepageProvider contracting/contract managementAccounting/financeWithholds/clinical edits/accumulatorsProvider relations/communicationsLegal/complianceUM/QualityMember communicationsSpecialty plans
Payment Bundling can impact a large number of payer business
areas and processes
16 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Payment Bundling Claims Processing
Work with existing provider / payer processes, including
authorizations, existing provider payment claims
stream, and benefits processing
Support different models of payment bundling payment
Multi-provider global case ratesFFS with a withhold on claims in the episodeReference pricing on multiple claimsBudget-based differential paymentPMPM payment for an episodeStop loss and outlier automation
Want to know more? Ask for a copy of Want to know more? Ask for a copy of ““NetworXNetworX Payment Bundling Administration Fact SheetPayment Bundling Administration Fact Sheet””
Support numerous and different definitions of payment bundles
Automatically determine which versionof an episode definition to useAllow changes or customizationto bundle design – or creation of new designsUse pre-configured bundles from national sources (IHA, CMS, Prometheus, others)
Tightly integrate into the payer’s core administration system
Tight integration allows a cleaner application of bundle logic within the context of claims processing
Otherwise, the actions of the bundle repricingcannot be coordinated with all the other claims activity
17 Confidential | Copyright © 2012 The TriZetto Group, Inc.
NetworX Payment Bundling Administration
NetworX Payment Bundling Administration (PBA) Features:
Automates the payment of episodic careCreates bundles from existing fee-for-service claimsProcesses claim adjudication through claim re-pricingPotentially integrates with any claims adjudication systemContains powerful rules engine for automating bundle definitionsHandles pre-admission, post-discharge services and warranty care
Claim
ClaimClaim
ClaimClaimClaimClaim
ClaimClaim
ClaimClaimClaimClaim
ClaimClaim
Non Bundled
Bundled Claims
Business LogicPayment Bundling Content
Provider Group
Single Bundled Payment
ClaimClaim
Episodes are created and paid prospectively, Episodes are created and paid prospectively, at the time of care delivery at the time of care delivery
Related Services
Core Administration
System
Claim Claim
Claim Claim
PBAPBA
Repriced Claims
18 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Contracting with ProvidersOne payer has a contract in place and doing it manually, with other interested providers being put off until automation is in placeOne is contracted now but not paying differentially until their automation solution is in placeOne has launched a statewide effort to enroll all providers in one specialtyOne is working collaboratively in a statewide effort that includes other payers in multiple specialty areasOne had strong interest from a single provider, who is now running for political office and may not follow through
Experience Experience here is variedhere is varied
Is it hard to Is it hard to contract with contract with providers?providers?
Always, for any contractProviders scared of risk, but more scared of losing controlBest contracts include multiple providers, which are harderBarriers exist for providersYet, providers do sign contracts and interest is still building
19 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Payment Bundling and Member Responsibility – the Good
Simplified member responsibility greatly preferredby membersEnables steerage to high value narrow networkEnforces narrow network, making seepage easierto manageTranslates contracted savings back to value choicefor member
Payment bundling is a tool to reduce premiumsin consumer enrollment environments
Eases administration
Best Practice:
Create benefit designs specifically for payment bundling
WHY?
20 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Payment Bundling and Member Responsibility – the Ugly
Add flexible language to template group contracts, allowing benefit design flexibility
Determine what your core system will do with repriced claims and create a program based on how your core works
Evaluate administrative cost (and error) against a desire to stay revenue neutral against the need to strictly comply with existing benefit designs
Whatever approach you selectEducate your peopleEducate the impacted providers
But what do I do until then?
21 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Agenda
Has Payment Bundling worked?
Implementation Status - Moving Beyond Talking
Payer Operational Challenges
Provider Operational ChallengesProvider Operational Challenges
22 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Provider Experience
CMS ACE Demonstration Project Operational Lessons
Leadership is criticalYou cannot communicate enough
During design and stand-up, multi-disciplinary resources neededFull-time coordinator/case manager
Cost accounting challenges
Data collection
Processing and distributing payments
Claims ProcessingOne hospital processing approximately 10,000 part B claims per year for qualified proceduresClaim volume is cost prohibitive in typical health plan claims processing operationTechnology solution needs to be scalablein anticipation of additional bundled services or expanded product lines
Collaboration between hospital and physicians
essential – and challenging
Devote the correct resources
Administrative Issues
23 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Important Message on Accepting Risk
First: determine what risk you can manage
What are the unwarranted variations of care
that exist?
What clinical interventions can you make
to address them?
What other providers must align with you
to achieve this?
How will you measure and manage the risk and your changes?
…only then should you contract with a payer
Track physician compliance with first pull and vendor policy; track implantable costs directly to patient
Ortho surgeon, cardiac surgeon, interventional radiologist
Reduce vendors and use a “first pull” approach
Implantable pricing
Intensive tracking of glucose levels; measure LOS, step-down utilization, and post-op infections on 100% of patients in the program
Anesthesiologist, endocrinologist
Implement tight glycemic control peri-operatively
LOS and complications for mildly diabetic patients receiving surgeries
24 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Payment Reform is Not Magic Pixie Dust
Contracting for risk is easier than clinical
transformation
25 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Accepting risk is easier than managing risk
If Payers Can Manage Risk, How Hard Can It Be?
26 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Is it realistic to make changes?
One man’s wasteis another man’swages” – Ian Morrison’s Eight Law ofAccountable Care
What Is Required to Determine Manageable Risk?
With a few IDN exceptions, no one provider has this
Combining provider data is hard to do effectively
Payers are a key partner, but barriers exist
What are the unwarranted variations that matter?
What are the systematic areas of waste?
Data Data –– longitudinal data longitudinal data for the patients who will for the patients who will
be in the risk poolbe in the risk poolAnalytics Analytics
CollaborationCollaboration among necessary among necessary
providersproviders
27 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Identifying Possible Care Transformation
How to Support Opportunity Identification
Requires modeling capability of longitudinal episode of careInclude care from all providers, post (and perhaps pre) discharge
EMR data is probably not enough
Examine utilization, cost, process, and outcomesLooking for unwarranted variations in care or systematic wasteful utilization
There are two areas of utilization improvementYour cost structure Services provided by others
28 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Cost Accounting
Software and process must allow the measurement
of what you expect to change, at a
patient level
Must be able to measure actual
variable costs, not imputed costs
Must be able to measure the
performance / process change – at a patient level
How to Measure Improvement?
Cost Accounting / Performance Measurement
If you cannot measure it, you cannot fix it
29 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Measuring and Communicating Performance
30 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Physician
Pays Fee for Service
Savings
CMSCMS
Pays Case Rate
Pays Incentive
Calculate Shared with
Hospital
Patient
Member Responsibility
CMS ACE Demonstration Project
Distribution Payment - One Example:
31 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Whether global case rates or shared savings, payers make payments that must be distributed among providers
Distributing Accountable Care Payments
Utilization/volume: source is payer dataPerformance: source is provider dataFormula should be based upon the alignment needed to accomplish the clinical transformation
Distribution is typically based on
two things:
Provider administrative systems poorly suited to automate thisPayers may offer to be a fiscal intermediaryProviders can contract with a third party
Making such payments has been a Payer
function
32 Confidential | Copyright © 2012 The TriZetto Group, Inc.
Solution to Distribute Payments
Can distribute a single payment among the group of providers
Payment consists of two parts:“Internal FFS” – paymentof claims within the groupof providers
Much like a TPA servicePerformance – distributes “savings” or bonuses basedupon individual performance
A pay-for-performance program within the provider group
TriZetto will distribute funds from Payer or Provider Organization’s account using system generated bills
Includes related services, such as 1099s, reporting, EOBs, etc.
Claims in an Claims in an Episode Episode
Provider Provider Performance Performance
DataData
Outsourced PaymentOutsourced Payment Distribution ServiceDistribution Service
Single Single Payment Payment
Information Information from Payerfrom Payer
Provider 1Provider 1 Provider 2Provider 2 Provider 3Provider 3
FFS Payment
PerformancePayment
FFS Payment
PerformancePayment
FFS Payment
PerformancePayment
Provider Bank AccountProvider Bank Account
Not an offer for services
33 Confidential | Copyright © 2012 The TriZetto Group, Inc.
What is the physician group?Who gets incentivized?
Legal structure and governance
Establish risk within groupBasic model: hospitals indemnify the physiciansand take on risk themselvesPhysician Gainsharing Profit Sharing
Overall program must be profitablePhysicians must meet higher quality standardsFor qualifying physicians, 50% of savings sharedSavings apportioned among qualifying physiciansbased on volume
Legal and statutory considerationsManaging and administering seepageWhen getting started, look for opportunities to simplify complex problems
Final Planning Thoughts – Payer and Provider
Confidential | Copyright © 2012 The TriZetto Group, Inc. 34
Thank YouJay Sultan – [email protected]