HIDA Webinar Series - Streamlining Healthcare · HIDA Webinar Series ... achieved by each ACO if...
Transcript of HIDA Webinar Series - Streamlining Healthcare · HIDA Webinar Series ... achieved by each ACO if...
ACOs and Acute Care Reimbursement Trends
HIDA Webinar Series
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Agenda
Healthcare reform update: acute careStatus of the main provisionsKey changes for hospitals
Accountable care organizationsTypesQuality measuresTrends
Key to success in this changing environmentImpact on the supply chain: big picture
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What Is Healthcare Reform, Anyway?
1,000 Pages of Changes – Hard to See the Whole Picture© 2013 Copyright Health Industry Distributors Association. All rights reserved.
Status of Healthcare Reform Provisions
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Reform Was Built on Promise of An Insured Population
29-30 Million
Medicaid Expansion
State‐based Insurance Exchanges
Federal Insurance Exchange
Employee Mandates
Individual Mandate
Business Co‐ops
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Medicaid Expansion – State Perspective
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Insurance Exchanges – State Perspective
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Deadline for Employer Health Insurance Mandate Pushed Back a Year
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Emphasis on quality
Skin in the game
Reduced costs
MandatoryComing to a market near you!
Value-based purchasingReadmissions policyInfection policies
VoluntaryAccountable care organizations (ACOs)Bundled payment pilot program
Payment Drivers Are Changing
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Hospitals – Key Changes
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Hospital Payment Tied to Performance
% of hospital pay tied to performance
ACO amount is unknown and depends on physician participation/ pay model
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VBP - 1,427 Hospitals Penalized This Year
Value-based Purchasing (VBP) –Ties pay to performance on quality measures
Rolling out in acute care firstStarts with measures for heart attack, heart failure, pneumonia, certain surgeries, six infections and patient experiencePlan to implement VBP in skilled nursing facilities, ASCs
Hospitals can earn back more than their share or lose it by not meeting performance benchmarks
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CMS’s Proposed Changes to VBP for 2016
1 new process measure: flu immunization2 new HAIs: catheter-associated urinary tract infection and surgical site infection3 process measures removed: coronary intervention w/in 90 min, discharge instructions for heart failure, and blood cultures for pneumonia patients prior to antibioticNew “floor” for all patient satisfaction measuresReweighting the four measure domains – clinical process, patient experience, outcomes, and efficiency –to increase weight of outcomes and efficiency
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Hospital Readmissions Reduction Program -1% Cut in 2013
Hospital payments reduced for excess readmission rates within 30 days of discharge:
Heart attack, heart failure, and pneumoniaFY2014 – 2% cutFY2015 – 3% cut
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Other Providers are on The Hook for Readmissions
More than 2000 hospitals penalized in FY2013Hospitals hit hardest in NJ, NY, DC, AR, KY, MS, IL, and MASafety-net hospitals hit harder than others
Smooth transitions in care Mandates: 30 Day Hospital Readmission PolicyPressure to perform on other providersFuture referrals at risk!
Pressure to move to electronic medical records
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CMS’s Proposed Changes to Readmissions Policy
Penalty increases up to 2% for FY 2014
Revised methodology to account for planning readmissions
2 new readmission measures for 2015 penalties:Hip/knee arthroplastyCOPD
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Infections: Multiple Programs Could Lead to Multiple Penalties
■ Medicare and Medicaid do not reimburse for preventable health-acquired conditions
■ FY2015 – 1% cut for hospitals in top quartile for infection rates
Multiple penalties
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CMS’s Proposed Changes to Infections Policy
Domain #1 – patient safety indicators (PSIs):Pressure ulcer rateVolume of foreign object left in bodyIiatrogenic pneumothorax ratePostoperative physiologic and metabolic derangement ratePostoperative pulmonary embolism or deep vein thrombosis rateAccidental puncture and laceration rate
Domain #2: HAIsCentral line-associated blood stream infectionCatheter-associated urinary tract infection
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■ Pilot project where payments are bundled for acute inpatient, physician, outpatient, post-acute services
■ 2 Payment Types, 4 ModelsCMS has suspended further implementation of Model 1 due to lack of participation.
2010 2011 2012 2013 2014 2015 2016 2017
January 1, 2013, national voluntary pilot program begins
HHS report to Congress on program -2015
HHS report to Congress on final results of program, as well as a plan for expansion -2016
Bundled Payments – Another Step Away From FFS
ACOs
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A group of healthcare providers that contracts with Medicare (or another payor) to coordinate care for beneficiaries and reduce the overall costs associated with delivering the care.
Specifically ACO providers agree to work together to:
What is an ACO?
Coordinate patient care Share in achieved
cost savings by reducing cost to
deliver carePerform well on quality measures
Reduce costs
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Various Types of ACOs
Medicare Shared Savings Program (MSSP)
Built into healthcare reform lawThree-year participation agreement221 ACOs selected
Medicare Pioneer ACOsDemonstration projectSimilar emphasis on quality and savings, but with more flexibility in programSame quality measures
Private sector ACOsVary widely
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The Rulebook Depends on Who Makes the Rules
221 - Medicare Shared Savings Program
32 - Pioneer ACO Demo
PRIVATE SECTOR ACOS
FEDERAL ACO PROGRAMS
10 - Physician Group Practice Demo Advanced Payment
Model ACOs
Healthcare Providers
Insurers
The framework, or rules, for each ACO depends on the “payer”
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Does ACO Formation = Ownership Consolidation?
Not necessarily ACOs need a formal legal structure to receive and distribute payments for shared savings to participating providers Separate entities may participate, such as hospitals and physician practicesOne provider organization serves as “convener”
Medicare Shared Savings Program
Pioneer ACOs Private sector
ACOs
Medicare Sharing Savings Program
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Share in the SAVINGS, and in some cases RISKAt least 5,000 Medicare beneficiariesParticipate for three yearsMedicare beneficiaries must be informed, they retain the option to decline participation33 quality measuresGovernance requirements
The Basics
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Approved Medicare Shared Savings ACOs have two track options:
■ One-sided risk model Share in savings all three yearsMust first meet a minimum savings rate of between 2% and3.9% (depends on population size)Then, they can share up to 50% of first dollar savingsdepending on quality scores
■ Two-sided risk model Share in savings or losses all three years Must first meet 2% saving/loss rateShare up to 60% of savings/losses depending on qualityscores
How Does the Money Work?
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How Will Doctors in an ACO be Paid?
Medicare will continue to pay individual providers for specific services as it currently doesCMS will develop a benchmark for savings to be achieved by each ACO if the ACO is to receive shared savings The amount of an ACO’s shared savings or losses depends on its performance on quality standardsACOs must develop their own legal structure to share any savings with its affiliated providers
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How ACOs Work
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Bumpy Road for Pioneer ACOs
Pioneers balk at level of riskUp to 9 expected to shift to MSSP program
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Pioneer ACOs Include Many Leading Systems
Organization Service Area
1. Allina Hospitals & Clinics Minnesota and Western Wisconsin
2. Atrius Health Eastern and Central Massachusetts
3. Banner Health NetworkPhoenix, Arizona Metropolitan Area (Maricopa and Pinal Counties)
4. Bellin-Thedacare Healthcare Partners Northeast Wisconsin
5. Beth Israel Deaconess Physician Organization Eastern Massachusetts
6. Bronx Accountable Healthcare Network (BAHN) New York City (the Bronx) and lower Westchester County, NY
7. Brown & Toland Physicians San Francisco Bay Area, CA
8. Dartmouth-Hitchcock ACO New Hampshire and Eastern Vermont
9. Eastern Maine Healthcare System Central, Eastern, and Northern Maine
10. Fairview Health Systems Minneapolis, MN Metropolitan Area
11. Franciscan Alliance Indianapolis and Central Indiana
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Pioneer ACOs Include Many Leading Systems (cont’d)
Organization Service Area
12. Genesys PHO Southeastern Michigan
13. Healthcare Partners Medical Group Los Angeles and Orange Counties, CA
14. Healthcare Partners of Nevada Clark and Nye Counties, NV
15. Heritage California ACO Southern, Central, and Costal California
16. JSA Medical Group, a division of HealthCare Partners Orlando, Tampa Bay, and surrounding South Florida
17. Michigan Pioneer ACO Southeastern Michigan
18. Monarch Healthcare Orange County, CA
19. Mount Auburn Cambridge Independent Practice Association (MACIPA)
Eastern Massachusetts
20. North Texas ACO Tarrant, Johnson and Parker counties in North Texas
21. OSF Healthcare System Central Illinois
22. Park Nicollet Health Services Minneapolis, MN Metropolitan Area
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Pioneer ACOs Include Many Leading Systems (cont’d)
Organization Service Area
23. Partners Healthcare Eastern Massachusetts
24. Physician Health Partners Denver, CO Metropolitan Area
25. Presbyterian Healthcare Services – Central New Mexico Pioneer Accountable Care Organization
Central New Mexico
26. Primecare Medical Network Southern California (San Bernardino and Riverside Counties)
27. Renaissance Medical Management Company Southeastern Pennsylvania
28. Seton Health Alliance Central Texas (11 county area including Austin)
29. Sharp Healthcare System San Diego County
30. Steward Health Care System Eastern Massachusetts
31. TriHealth, Inc. Northwest Central Iowa
32. University of Michigan Southeastern Michigan
Quality Measures for Medicare ACOs
(Both MSSP and Pioneer)
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Quality performance standards must be met in order for an ACO to share in any savings
Year 1 Year 2 Year 3
Completely & AccuratelyReport
33 33 33
Meet Performance Minimums
0 25 32
**EHR “meaningful use” participation is a performance measure, not a 50% requirement
Shared Savings Tied to Quality Measures
Providers in an ACO are still subject to additional health reform policies on infections, readmissions, and value-based purchasing!
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The Challenge: Improve Quality, Reduce Spending
Four groups of quality measures:Patient experienceCare coordination and patient safety Preventive healthCaring for at-risk populations
CMS will develop spending benchmark for each ACO, every year to gauge financial performance
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In the first year, providers must fully and accurately report on all four quality measure domains. In the second and third years, the share of savings will be tied to performance on quality measures.
Points are assigned to each measure, and ACOs must attain a minimum of 30% on each measure for 70% of the measures in each domain. The benchmark is reset each year based on previous year’s data.
The Challenge: Improve Quality, Reduce Spending
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Quality Measures in Final ACO Rule
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Quality Measures in Final ACO Rule
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Quality Measures in Final ACO Rule
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Healthcare Providers Form an LLC to Contract with Medicare
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Providers Bill CMS Separately for Services; Also Submit Performance Data
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CMS Determines Whether ACO Has Met Quality Benchmarks and Reduced Total Costs
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CMS Shares Any Savings Above Minimum Rate
Shared SavingsSavings above the “minimum savings rate,” 2‐3.9% depending on ACO size and risk model, go to the LLC, which distributes them to participating providers
Private Sector ACOs
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Major Private Sector ACO Initiatives
■ Cigna: collaborative accountable care (CAC) program with 32 CACs serving 300,000 patients in 16 states
Aims to have 100 CACs covering one million patients by 2014
Aetna: 10 ACO-like agreements with providers in place, 14 more in the works
Investing $1B+ in a capabilities to support ACO program, including acquiring a health IT services firm
Blue Cross Blue Shield Massachusetts: ACO-like contracts “Alternative Quality Contracts” with 11 provider organizations established in 2009-2010, produced savings and quality improvements
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Comparing Medicare and Private Programs
Providers participating in ACO agreements with private payers may also choose to participate in the national MSSP program – however, private sector agreements may have significant differences in terms of patient volume, eligible participants, financial incentives, and clinical/quality.
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Comparing Medicare and Private Programs
4 “ACO Providers Fact Sheet,” Centers for Medicare & Medicaid Services, October 2011.5 “Premier accountable care organizations – Driving to a people-centered health system,” Premier, Inc. 2011.
Key to Success in Your Changing Environment
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Find the Pain and Take It Away
■ Preventing infections■ Reducing readmissions■ Patient satisfaction■ Key clinical areas: heart
attack, heart failure, pneumonia
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Tie Your Marketing to New Quality Metrics
For example:■ Patient Experience■ Care Coordination and Patient Safety
COPDEHR Implementation by Primary Care ProvidersScreening for Risk of Falls
■ Preventive HealthFlu and Pneumonia Vaccination RatesColorectal Cancer ScreeningBlood Pressure Screening
■ Caring for At-Risk PopulationsDiabetes Control (SEVERAL measures)Blood Pressure Control
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Plenty of Pain and Challenge on the Non-Acute Side Too
Example: reducing readmissionsMajor opportunity to both improve quality of care and lower costs
Majority are chronic disease patientsDepends on primary care support
Requires a strong primary care infrastructureACO might decide to incentivize primary care physicians to spend more time on chronic disease management
Requires trusted extended care relationships
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Cost Pressures Create Enormous Customer Pain
Being cheaper isn’t the only way to reduce this pain
Providers won’t succeed if they cut spending in one area only to add costs in anotherACOs won’t succeed if they cut spending and quality declines
Show Customers Why Spending for Your Product or Service Will Reduce
System-Wide Costs
“Hospitals of all sizes are generally willing to pay a 10-15% premium on average for disposables that demonstrate an ability to reduce errors and infection rates.”
--Stuart Jackson and Bob LavoieL.E.K. Consulting
“Healthcare Reform Shifts Hospital Priorities, Creates New Opportunities for MedTech Companies,” Executive Insights Vol. XIII, Issue 4, June 2011
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Bring Data
Providers are demanding data for “evidence-based product and service selection”Many distributors have more data than their customers do – great source of competitive advantage
“Progressive providers and supplier organizations are preparing for this new era by expanding their talent pools with
experienced data analysts who can conduct “deeper dives” into cost analytics to discover cost per case, cost per patient,
and other needed metrics.”
New Integrated Delivery Models, ACOs, and the Healthcare Supply Chain, March
2012, Strategic Marketplace Initiative (SMI)
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Speak the Language: Population Health
Current State:Volume-Based Reimbursement(Fee-for-Service)
Future State:Risk-Based Reimbursement(ACO/Shared Savings/ Capitationand Quality-Oriented)
Low financial accountability for cost of care High accountability for cost of care
Defines population as patients who present at the doctor’s office
Defines population as every patient in the provider organization panel, regardless of whether they present at the doctor’s office
Minimal infrastructure (technology, staff, data, etc.) to manage more than the sickest/most complex patients
Must have infrastructure to manage the entire population
Culture rewards volume and operational efficiency
Culture rewards optimization of cost and quality
Source: ACOs and Population Health Management, American Medical Group Association
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Speak the Language: Clinical Integration
Generic meaning: clinical providers across a continuum of services work together to better care for patients
More specific meaning: a legal arrangement to create the incentives, management, and infrastructure for physicians and health systems to improve quality and efficiency
“With a looming mandate to manage total‐cost risk for patients, hospitals must make physicians true partners in delivery system redesign. Yet, for most organizations,
current physician relationships are inadequate to create this level of alignment. As a result, many are now looking to clinical integration (CI) as a strategy to align both
employed and independent physicians around performance improvement.” – The Advisory Board
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Speak the Language: Standardization
Taking on a larger meaningProceduresProcessesProducts
Providers focus on reducing variation to increase predictability of outcomes AND standardize products and suppliersStandardization efforts will be driven by evidence based data such as clinical outcomes, comparative effectiveness, and operational costs.
“Within the healthcare supply chain, variability equates to costs. As such, in order to improve costs, efforts to standardize on clinical practice, processes, products and suppliers will increase.”
New Integrated Delivery Models, ACOs, and the Healthcare Supply Chain, SMI, 2012
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Speak the Language: Value Analysis
The process of evaluating products based on cost, quality, contribution to patient outcomesOften done through “value analysis teams“ or VATs
VATs usually organized by supply chain dept. but made up primarily of clinical personnelPhysician participation increasingBecoming more formalized in most health systems
Tends to focus on highest-cost physician preference items (PPI)Roles are evolving fast:
Expanding beyond evaluation of products into processes and clinical proceduresIncreasing emphasis on life cycle costs, patient outcomes, metrics
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Source: Strategies for Medical Device Manufacturers to Address Hospital Value Analysis, Medical Device and Diagnostic Industry, May 2013
Common Features of Value Analysis Teams
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Speak the Language: Utilization Management
Continual process of managing, benchmarking and controlling day-to-day product consumption
“We evaluate, select, and contract for a product, service or technology and then we turn it over to our hospital staff who use too many, employ the wrong products, choose feature-rich products, unknowingly waste products, or vendors upsell new higher-cost products inside your new contract.”
Why supply utilization management is significantly different than value analysis, Robert Yokl, Value Analysis Magazine, 2013
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Take More of a Team Approach Than Ever
At the field level, reps still need strong relationships with clinicians, doctors, purchasing agents, and practice administratorsAt the ACO or IDN level, key decision-makers may include:
The materials management or supply chain departmentValue analysis committeesClinical leaders in areas such as infection controlThe leader of “physician alignment” or “physician integration” efforts
Coordination among levels of the sales force is critical
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Ask Questions
Is your organization part of an ACO?If yes, with what partners? What type of affiliation? Now or how soon?
What changes are you making in your practice as a result of healthcare reform?How can I help?
How Will Accountable Care Impact the Supply Chain?
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More Focus on…
Standardization of procedures and processesEvidence-based medicineData analyticsPhysician engagementPatient engagementService line management (example: spine care)Cost reduction
Where do they start first? Supply chain!
A reduction of two percent in supply chain spending (operating expenses) would require an average hospital to increase revenue by 30 to 40 percent to have the same
impact. (Navigant Pulse, Winter 2011)
Important to all acute care customers, with ACOs
leading the way.
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Some Will Look at Consolidating Purchasing Across the Continuum
Integrated delivery network (IDN)Types of providers included is driven by system goals
Most typically, common ownership, possible some joint ventures
Greater likelihood of consolidated supply chain strategy
Accountable care organization (ACO)Types of providers included is driven by program rules or payer agreements
Much looser affiliations likely
Consolidating the supply chain strategy more challenging
IDNs
IDN-led ACOs
ACOs
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Some Will Look at Self-distribution
1. Control2. Improved service3. Product standardization4. Reduce distributor costs5. Collect administrative/manufacturer fees6. Disaster preparedness
Source: Cardinal phone survey of 17 self-distributors
Used with permission
Survey of Supply Chain Executives: Reasons for Self-distribution (ranked):
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Fee-for-Service
ACOs
Volume Value
Healthcare at a Tipping Point
Patient Satisfaction
Physician Employment