Fundamentals of Healthcare Reform

Walter ColemanWV/PA HFMASeptember 25, 2014

How about efficiency?

Waste in the System

Industry Tipping Point

6

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?

Healthcare Performance Program Umbrella

Value Based Purchasing

Readmission Reduction

Program

Hospital A

cquired

Conditions

Bundled Payment

Hospital Inpatient Q

uality

Reporting Program

ACO

Medicare Shared Savings

Program

VALUE BASED PURCHASINGMandatory Element of Reform

Value Based Purchasing Overview

• MANDATORY – we have no choice

VBP Example $33,333,333 Medicare Reimbursement

Amount mandated to pay for participation

VBP Example $33,333,333 Medicare Reimbursement

VBP Example $33,333,333 Medicare Reimbursement

$300,000

VBP Example $33,333,333 Medicare Reimbursement

Amount mandated to pay for participation

VBP Example $33,333,333 Medicare Reimbursement

VBP Example $33,333,333 Medicare Reimbursement

($200,000)

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

NEW MEASURESValue Based Purchasing

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 – 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 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 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 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 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 – OutcomesOutcomes• 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 SafetyClinical 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

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 – 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 - 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

PROPOSED MSPB Measures

• 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 discharge41

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

VBP Shifting of Domain Weights

FY 2013 FY 2014 FY 2015 FY 2016

• Core Measures

• Patient Experience • Efficiency (MSPB)

• Outcomes

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%

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HCAHPS = 25%

Safety = 20%

MSPB = 25%

Clinical Care - Process = 5%

Clinical Care - Outcomes = 25%

VBP – FY17 Domain WeightsPerformance Period: January 1, 2015 – December 31, 2015Reimbursement Period: October 1, 2016 – September 30, 2017

Crosswalk from FY 16 to FY 17

Measure Prior Domain (FY’16) NQS Domain (FY’17)

Core Measures Clinical Process of Care Clinical Care- Process

HCAHPS Patient Experience of Care Patient & Caregiver Centered Experience of Care/Care Coordination

CAUTI/CLABSI/SSI Outcomes Safety

Mortality – 3 diagnoses Outcomes Clinical Care- Outcomes

PSI- 90 Outcomes Safety

Medicare Spend Per Beneficiary Efficiency Efficiency & Cost Reduction

ANALYZING VALUE BASED PURCHASING PERFORMANCE

Fundamentals of Healthcare Reform

• 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

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%

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

READMISSION REDUCTION PROGRAM

Mandatory Element of Reform

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

HOSPITAL ACQUIRED CONDITIONS

Mandatory Element of Reform

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

Hospital Acquired Conditions: FY 2015

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

Second Domain: CDCPerformance Period: CY 2012 & 2013

Pressure Ulcer Rate CLABSI

Iatrogenic Pneumothorax Rate CAUTI

Central Venous Catheter-Related Bloodstream Infections

Postoperative Hip Fracture

Postoperative Pulmonary Embolism and Deep Vein Thrombosis Rate

Postoperative Sepsis

Postoperative Wound Dehiscence

CLABSI 32.5%

CAUTI 32.5%

Pressure Ulcer 5.0%

Postop. Sepsis 5.0%

HAC Domain Weightings: FY’15

DOMAIN 1: 35% DOMAIN 2: 65%

Hospital Acquired Conditions: FY 2016

First Domain: PSIs25%

Second Domain: CDC75%

Pressure Ulcer Rate CLABSI

Iatrogenic Pneumothorax Rate CAUTI

Central Venous Catheter-Related Bloodstream Infections

SSI Following Colon Surgery (FY 2016)

Postoperative Hip Fracture SSI Following Abdominal Hysterectomy (FY 2016)

Postoperative Pulmonary Embolism and Deep Vein Thrombosis Rate

Postoperative Sepsis

Postoperative Wound Dehiscence

CLABSI 25.0%

CAUTI 25.0%SSI 25.0%

Pressure Ulcer 3.6%

3.6%Postop. Sepsis

HAC Domain Weightings: FY’15

DOMAIN 1: 25% DOMAIN 2: 75%

Hospital Acquired Conditions: FY 2017

First Domain: PSIs25%

Second Domain: CDC75%

Pressure Ulcer Rate CLABSI

Iatrogenic Pneumothorax Rate CAUTI

Central Venous Catheter-Related Bloodstream Infections

SSI Following Colon Surgery (FY 2016)

Postoperative Hip Fracture SSI Following Abdominal Hysterectomy (FY 2016)

Postoperative Pulmonary Embolism and Deep Vein Thrombosis Rate

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

Postoperative Sepsis Clostridium Difficile (FY 2017)

Postoperative Wound Dehiscence

Duplicate Measures

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VBP - Outcomes HACIndividual Measure

CLABSI CLABSICAUTI CAUTISSI - Colon SSI - Colon

SSI - Abdominal Hysterctomy SSI - Abdominal Hysterectomy

AHRQ: PSI-90

Pressure Ulcer Rate Pressure Ulcer Rate

Iatrogenic Pneumothorax Rate Iatrogenic Pneumothorax RatePostoperative Pulmonary Embolism and DVT Rate

Postoperative Pulmonary Embolism and DVT Rate

Accidental Puncture and Laceration Rate

Accidental Puncture and Laceration Rate

VBP - Outcomes HACIndividual Measure

CLABSI CLABSICAUTI CAUTISSI - Colon SSI - Colon

SSI - Abdominal Hysterctomy SSI - Abdominal Hysterectomy

AHRQ: PSI-90

Pressure Ulcer Rate Pressure Ulcer Rate

Iatrogenic Pneumothorax Rate Iatrogenic Pneumothorax RatePostoperative Pulmonary Embolism and DVT Rate

Postoperative Pulmonary Embolism and DVT Rate

Accidental Puncture and Laceration Rate

Accidental Puncture and Laceration Rate

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

CURRENT DOLLARS AT RISK

SAMPLE $50,000,000 FACILITY

Mandatory Elements of Reform

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

OPPORTUNITIESMandatory Elements of Reform

New NQS Based Domains for FY 2017

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HCAHPS = 25%

Safety = 20%

MSPB = 25%

Clinical Care - Process = 5%

Clinical Care - Outcomes = 25%

50% of VBP is Mortality and MSPB

72

Clinical Care - Outcomes = 25%

Opportunities – VBP: Outcomes

73

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

VBP – Other Possible Metrics to Follow

• Emergency Department Care• Preventative Care

– Pneumonia Vaccine

• Children’s Asthma Care• Stroke Care

– Blood Clot Prevention Care– Preventative Care

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

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SOURCE: August 2014 Proposed Rules Federal Register

Readmissions – Proposed Future Measures

• Percutaneous Coronary Intervention (PCI)

• Stroke

Opportunities – HAC

• SSI Following Colon Surgery (FY’16)

• SSI Following Abdominal Hysterectomy (FY’16)

• MRSA (FY’17)

• C Diff (FY’17)

BPCIBUNDLED PAYMENTS

Description of Models 1 - 4

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Medical Homes

Acute Care Bundling

Acute Care Episode with Post Acute Care Bundling

Post Acute Care Bundling

©2010 Kaufman Hall & American Hospital Association.81

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

82

 

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

83

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 October 2014

Go/No Go Decision to Participate

November 1, 2014 January 1, 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.

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

$22,468

Bundled 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

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

87

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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Internal Cost Savings• DHG Healthcare has one of very few, if not the only, Internal

Cost Savings Gainshare models to have been submitted and approved by CMS at this time

APPROVED

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…coming soon?

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

• 28 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

Outpatient Bundling – Summary• Comprehensive APC is another step towards CMS establishing

a Prospective Payment Model for OPPS

• Goal: eliminate avoidable costs and increase shared decision making

• Healthcare stakeholders who have been on the sidelines for recent CMS pilots and existing programs will not have this luxury as CMS expands their delivery and payment reform portfolio in the upcoming calendar year

Thank you!

Contact Information:

Walter Coleman

Walter.Coleman@dhgllp.com

(804) 474-1248