Workshop: Pathway To Value Based Care Thursday, … To Value Based Care Thursday, April 6, 2017 1:00...

Lee Memorial Health System Board of Directors

Workshop: Pathway To Value Based Care

Thursday, April 6, 2017

1:00 p.m.


BOARD OF DIRECTORS OFFICE

239-343-1500 FAX: 239-343-1599

13685 DOCTORS WAY #190 FT MYERS, FLORIDA 33912

CAPE CORAL HOSPITAL

GULF COAST MEDICAL CENTER

HEALTHPARK MEDICAL CENTER

LEE MEMORIAL HOSPITAL

GOLISANO CHILDRENS HOSPITAL OF SOUTHWEST FLORIDA

THE REHABILITATION HOSPITAL

LEE PHYSICIAN GROUP

LEE CONVENIENT CARE

BOARD OF DIRECTORS

DISTRICT ONE

Stephen R. Brown, M.D.

Therese Everly, BS, RRT

DISTRICT TWO

Donna Clarke

Nancy M. McGovern, RN, MSM

DISTRICT THREE

Sanford N. Cohen, M.D.

David Collins

DISTRICT FOUR

Diane Champion

Chris Hansen

DISTRICT FIVE

Jessica Carter Peer

Stephanie Meyer, BSN, RN

AGENDA

BOARD OF DIRECTORS WORKSHOP: PATHWAY TO VALUE BASED CARE

April 6, 2017 1:00 PM

Gulf Coast Medical Center – Boardroom (Medical Office Building) 13685 Doctors Way, Ft. Myers, FL 33912

CALL TO ORDER (Sanford Cohen, M.D., Board Chairman) The Board of Lee Memorial Health System, doing business as Lee Health, Gulf Coast Medical Center & Lee Memorial Hospital/HealthPark Medical Center and the Board of Directors of its subsidiary corporations, including but not limited to Cape Memorial Hospital, Inc. doing business as Cape Coral Hospital; Lee Memorial Home Health, Inc.; and HealthPark Care Center, Inc.

WELCOME AND OPENING COMMENTS (Sanford Cohen, M.D., Board Chairman)

1. THE ROAD MAP TO “FUTURE WORLD” (Jim Nathan, President/CEO

2.

THE MARKET ENVIRONMENT AND WHAT LEE HEALTH HAS IN PLACE TODAY (Scott Nygaard, M.D., Chief Medical & Clinical Integration Officer)

3. OUR ASSESSMENT (Ben Spence, Chief Financial & Business Services Officer) (John Chomeau, Chief Population Health Officer)

4. OUR OPPORTUNITIES (John Chomeau, Chief Population Health Officer)

5.

NEXT STEPS & CLOSING (Sanford Cohen, M.D., Board Chairman)

6.

ADJOURN (Sanford Cohen, M.D., Board Chairman)


WELCOME & OPENING

COMMENTS (Sanford Cohen, M.D., Board Chairman)

Population Health Alphabet Soup Lexicon

April 6, 2017

Presented by: Scott Nygaard, M.D., MBAChief Medical and Clinical Integration Officer

Definition- SimplifiedPopulation health has been defined as "the health outcomes

of a group of individuals, including the distribution of such

outcomes within the group". It is an approach to health that

aims to improve the health of an entire human population.

Comment: While population health may be enabled by payment reform– it is not a requirement in my opinion and system of care design could occur in a FFS world, but the discipline to organize around this principle seems to be lost in a mindset that suggests: Payment reform is the mechanism to drive change!

2

Business Models have emergedPioneer ACO- was designed for health care organizations and providers that were already experienced in coordinating care for patients across care settings. It allowed these provider groups to move more rapidly from a shared savings payment model to a population-based payment model on a track consistent with, but separate from, the Medicare Shared Savings Program.

Medicare Shared Savings Programs (MSSP)- The Medicare Shared Savings Program (Shared Savings Program) was established by section 3022 of the Affordable Care Act. The Shared Savings Program is a key component of the Medicare delivery system reform initiatives included in the Affordable Care Act and is a new approach to the delivery of health care. Congress created the Shared Savings Program to facilitate coordination and cooperation among providers to improve the quality of care for Medicare Fee-For-Service (FFS) beneficiaries and reduce unnecessary costs.

3

Business Models have emerged

Accountable Care Organizations (ACOs)- is a healthcare organization characterized by a payment and care delivery model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients. A group of coordinated health care providers forms an ACO, which then provides care to a group of patients.

NexGen Accountable Care Organization- Building upon experience from the Pioneer ACO Model and the Medicare Shared Savings Program(Shared Savings Program), the Next Generation ACO Model offers a new opportunity in accountable care—one that sets predictable financial targets, enables providers and beneficiaries greater opportunities to coordinate care, and aims to attain the highest quality standards of care.

4

Business Models have emergedCommercial ACO- An accountable care organization (ACO) is an association of hospitals, providers and insurers in which all parties assume accountability for the quality of patient care, and how money is spent as it pertains to a population.

Blue Cross Florida Accountable Provider Organization- Proprietary naming of a commercial ACO as noted above.

Provider Service Network (PSN- Medicaid)- Florida Medicaid PSNs share many of the accountable care attributes to “ACO-like” organizations, specifically: the provision of care across a continuum to a defined population, the ability to support comprehensive performance measurement, the identification of specific performance targets, payment mechanisms that encourage quality improvements and cost reduction, strong primary care medical home base, prospective planning, and health information technology to support care coordination and quality improvement.

5

Business Models have emergerdFederally Qualified Health Clinic (FQHC)- is a reimbursement designation from the Bureau of Primary Health Care and the Centers for Medicare and Medicaid Services of the United States Department of Health and Human Services. This designation is significant for several health programs funded under the Health Center Consolidation Act (Section 330 of the Public Health Service Act).

FQHC Look a Like- are community-based health care providers that meet the requirements of the HRSA (Health Resources and Services Administration Health Center Program, but do not receive Health Center Program funding. They provide primary care services in underserved areas, provide care on a sliding fee scale based on ability to pay and operate under a governing board that includes patients.

The defining legislation for Federally Qualified Health Center Look-Alikes (under the Consolidated Health Center Program) is Section 1905(l)(2)(B) of the Social Security Act.

6

Thank You

Lee Health“Moving Care from Volume to Value”• Population Health Transformation

• State of FL Medicaid Opportunity• Medicare Next Generation ACO Opportunity

Why and Why Now?

• The Medicare Access and CHIP Reauthorization Act (MACRA) was passed with overwhelming bipartisan support. The House voted 392‐37 in favor of the bill. The bill passed the Senate with a vote of 92‐8. Repeal and replace did not pass.

• CMS has been bullish on Medicare Advantage (MA). The fact that Medicare pays a fixed amount to private insurance companies offering MA plans creates more of an incentive to reduce costs by better managing the health of the Medicare population.

• We need to get costs under control, and the same fee‐for‐service model isn’t going to get us there. According to the Department of Health & Human Services, healthcare spending could climb to $3.35 trillion by the end of 2016. That equates to $10,345 for every American, which dwarfs the per capita healthcare spending of every other nations.

Why and Why Now?

• Medicaid is continuing to reform. Many states are experimenting with Medicaid payment reform that will continue, or even accelerate, under the block‐grant proposals.

• Accountable care has legs well beyond Medicare and the ACA. Although the ACA introduced “accountable care” into the healthcare lexicon, commercial payers have run with the concept and show no signs of backing away. By some estimates, commercial payer “ACOs” now outnumber the original CMS version by 4 or 5 to 1. In other words, the proverbial toothpaste is already out of the tube.

Why and Why Now?• Healthcare consumers want value. As in other industries, consumers want

to know that there is value in the services they are purchasing, be that in the form of cost, quality, convenience, experience, or a combination. Consumerism is not a partisan issue.

• It’s simply the right thing to do. The payment innovation of the last half‐decade has created many headaches, but it has also given providers permission to do the right thing – providing accessible, cost‐effective, and high‐quality care.

RIGHT CARE, RIGHT PLACE, RIGHT TIME

Independent External• Physician Organization

• Lee Physician Group and Lee Physician Hospital Organization

• New contracting mechanisms with hospital based providers

• Care Delivery Enhancements• Epic Implementation

• Lee Community Healthcare

• Clinical programs, ambulatory care and virtual

• Lee Health employee health plan

• Continuum of Care assets (e.g. DME, home health, SNF, etc)

• Children’s health services

• LPG PCMH Level III

• Palliative Care Telemedicine

• Talent• Chief Population Health Officer

• Medical Director of Quality Initiatives and Informatics

The Way Forward

Assessment, Situation Analysis and Implications

“A National View”

Medicare & Medicaid FFS Rate Pressure

Why value based reimbursement model strategy is so important….

Hospital Pricing

Sites of Care Shifting

Outpatient Growth Rate

Patients Syphoned Away From Hospitals

Assessment, Situation Analysis and Implications

“A Lee Health View”

Projected MedicaidFee-For-Service Reimbursement & Margin

*AHCA Pressure on Hospital Medicaid rates will increase losses $16 million over next 4 years

FY 2016 2017 2018 2019 2020Cases 110,163 112,366 114,614 114,614 116,906 Payments 82,886,947 82,853,792 82,820,651 81,164,238 81,131,772 Payment per Case (‐2% per year) 752 737 723 708 694 Total Operating Costs 126,219,787 130,034,255 133,977,132 136,656,674 140,814,152

Gain/(Loss) (43,332,840) (47,180,463) (51,156,481) (55,492,437) (59,682,380) Margin ‐52% ‐57% ‐62% ‐68% ‐74%

Medicaid HMO

Projected MedicareFee For Service Reimbursement and Margins

*Medicare losses expected to increase by $17 million over next 4 years

FY 2016 2017 2018 2019 2020Cases 261,596 269,444 277,527 277,527 285,853 Payments (+ 1/2% per year) 404,376,407 416,507,699 431,147,945 433,303,685 448,534,309 Payment per Case 1,546 1,546 1,554 1,561 1,569

Total Costs 457,837,311 474,205,058 491,265,036 501,090,336 519,230,544

Gain/(Loss) (53,460,904) (57,697,358) (60,117,091) (67,786,652) (70,696,235) Margin ‐13% ‐14% ‐14% ‐16% ‐16%

Projected

Medicare

Assessment and Situation– Lee Health Summary

STRENGTHS Medicaid Experience Investments in EPIC platform Lee Physician network and staff Lee County market strength Medicaid focused services: Federal Qualified

Health Centers, Lee Physician Group, Childrens Hospital and pediatric subspecialties

Patient Centered Medical Home certification Financial strength/Resources

OPPORTUNITIES Action Forcing Event ‐ RePosition LH for

Integrated Delivery model to take Risk and Improve community health

Accountable for 100% of premiums and Care Cost Align Incentives Internally across LH and

Providers 340B pricing Gain Med Econ/Analytics expertise Network development assistance Rescale capital programs investments Mitigate Medicaid losses and chairty care

THREATS• Limited Medicaid Contracted Organization

Operating Experience• Adequate non‐acute care access• Unaligned Independent Providers Potential for Financial Losses: Medical Loss>100% Fluid legislative environment and future of

Provider Service Network enhancements Financial risk outside of Lee County Uncertainty of State/ACHA approach to Medicaid

WEAKNESSES

• Strategic Plan and Alignment/Appetite to taking Full Risk

• Operating Pace and Cadence• Lack of/use of actionable data analytics • Clinically Integrated Network ‐ Fee For Service culture

with modest engagement• Medicaid provider shortage • Very limited service offerings outside of Lee County• Public agency limitations on Joint Ventures• Network gaps for pharmacy, transportation, dental,

behavioral etc..

S W

TO

Implications and Opportunities for Lee Health1. Segment and Stratify Patient Population based on Clinical and Social engagement

determinants

2. Align “Service Portfolios” to population health incentives. Sensitized to patient severity/health condition, future risk assessment and revenue accuracy

3. Establish a “Tiered Case Management System” based on patient risk factors (Moderate to Severe)

4. Engage Physicians in “Complete Care”: patient acuity, clinical pathway, cost and quality outcomes

5. Control avoidable over-utilization and establish effective patient engagement strategies to amplify the physician/patient relationship

6. Eliminate variation with standardized, cross-system process and enabling technology

7. Achieve fast-track alignment via new operating model and key performance indicators tied to payment outcomes

A Population Health “System of Care”Enables

Better Patient Outcomes and Value

Population Health Achieves Value Based Care

“Overcoming Fend for Self Medicine”

Population Health Drives Value Based Care

FFS DRG with

No Quality Link

Pay for ReportingPay for Performance

HEDISSTARS

APM’s Built off FFSBundled Payments

for Episodes of Care

Upside Gain Sharing and Downside Risk

CardiacCJR

Oncology

Population Based PaymentsCapitation

Shared Savings/Shared RiskCondition Specific

Comprehensive Care Pathway

Potential for Improved Quality and Payments

Degree

of C

omplexity

and

Alignm

ent

The movement from FFS is required and Pay for Performance is within Reach

LH

Value Based Models of CareThe Payer Marketplace is moving quickly to “Outcome Based Incentives”

Value Based Care is advancing and creating alignment to outcomes

• Focused alignment: Wellness/Preventative, Acute, Post Acute, Home Care, Behavioral, Rx, Device

• Physician Providers engaged via MIPS and MACRA - (PCP and Specialists)

• Medicare is leading, driving and seeking to bring Medicaid in as a “fast follower”

• Commercial Payers are taking “Best Practices” from Medicare into Commercial Employer Contracts

Medicare Medicaid Commercial

Population Management = VBC SuccessBuild and Deliver – “Right Care, Right Place, Right Time with the Right Culture”

• Know that 5% of Patients drive 50% of the spending

• Know that 70% of spending happens outside of the acute settings

“To be successful in VBC models we no longer can we be obsessed with Acute costs we must run fast and solve community care costs or get run over”

CEO of Medicare Advantage Payer

Population Health Transformation

3 Year Transition Plan‐ Strategic Implications‐ Objectives‐ Operating Model‐ Change Management

Population Health ‐ Implications

Healthcare is moving away from brick & mortar

Physicians are aligning based on value proposition

Hospitals no longer set the agenda for health care

delivery

What we are doingWhat we know

• Adapt to policy changes such as MACRA that reward physicians for quality and participation in Advanced Alternative Payment Models (APM)

• Invest in primary care, ambulatory care and alternative sites of care (e.g., virtual)

• Lock down and grow network through a viable value proposition to physicians

Population Health ‐ Implications• Surveillance - establish population monitoring to predict unmet health needs:

Behavioral, Medical, Medications

• Stratify – continuously profile patient risk at all points of engagement and benchmark against “Community Risk Determinants”

• Build a Patient Dossier• Quantify predictive risk and not just current treatment or historical disease state

• Engagement – deploy a tiered, population health, model of care that uses appropriate points of service and intensity of engagement to drive targeted outcomes

• Lee Health needs an enhanced Operating Model that creates a system of care• Alignment of Preventative, Acute and Non‐acute delivery of care and Health Optimization

• Manage - all levels of risk, especially moderate and low to prevent escalation. Apply disease management models for chronic/complex cases

• Repurpose existing strategic initiatives, resources and IT infrastructure• 1:1 patient relationship with dedicated Case Managers• New operating alignment and internal agreements

Strategic ObjectivesPopulation Health Center of Excellence

Objective 1Build Population Pathways

Objective 2Align Provider Community

Objective 3Performance Based Management

2017 Define and Build

2018Build and Refine


End State Operating Model / Organization and Culture‐ Right Care, Right Place, Right Time: First and the revenue will follow ‐ Inculcated across the “Continuum of Care” ‐ Compliance process and governance established to support Medicare and Medicaid APM’s

Fully Integrated Services ‐ Geriatric ‐ Psych/Family Counseling ‐ Oncology‐ Co‐Morbid ‐ RX – Medication Adherence ‐ Orthopedic‐ Pediatric ‐ Gastroenterology ‐ Cardiac‐ Primary Care ‐ Dermatology ‐ Neurology

Patient Centered Care Model‐ Improved Patient Engagement, measured satisfaction and clinical outcomes‐ Focused Factory: Team Based Care ‐ Internally and with Outpatient Providers (LPG and PHO)‐Measure d quality and outcomes via Medical Economics and Actuarial Sciences

Population Management Operating Models‐ New Operating Model to align and clarify cross discipline care journeys with focused factories on

Tiered Case Management from moderate , at risk and chronic cases ‐ Best in Class Home Based care with Medication adherence, Behavioral and Bio‐Metric Integration‐ Predictive Surveillance of Community Risk to guide proactive interventions

Population Management Standards and Practices‐ Regional Benchmarking and National Standards‐ Accreditation and certification process to force external benchmarking‐MA Stars, HSTARS, MACRA, MIPS, NCQA, ‐ Drives positive performance against the market forces

Objective 1Build Population Pathways

How

Optimized Performance via Alignment‐ Staffing with case management experience , PCMH orientation and community passion‐ Process Improvement– case load, capacity and utilization modelling to drive work flow productivity‐ Clinical Case Management (Buy or Build) Platform necessary to operationalize the change‐ Documentation and Reporting aligned with State and Federal regulatory requirements

Right Care, Right Place, Right Time• FIRST ‐ Quality and appropriate care• SECOND ‐ Revenue and performance

incentives will follow• THIRD – Regulatory Integrity is

mandatory

High Value Condition Cohorts• Cardiac• Oncology• Orthopedic• COPD• Neurology

What


Physician Activation Model‐ PUSH the PHO Hub and spoke outreach – Reestablish Shared Vision and Mission ‐ Build the Population Health Focused Factory to align PCP and Specialists‐ VBP motivations, incentives, rewards , infrastructure enhancement from LH‐ Plug into all new compensation models, contracting and accreditation processes

Patient Activation‐ Hub and spoke outreach to existing past and current LH Patients‐ Patients dissatisfied with current primary care, post acute and home based‐ Patients seeking convenience for Pediatric, Preventative, Personalized chronic Care plans‐ Educate on the value of PCMH

Boost Primary Care Value Proposition ‐ “Pre surgical optimizations” – Primary Care screening that opens up further collaboration‐ Integrative Medicine with case management of lifestyle changes to lower risk‐ “Post operative care” – Acute, Home to Ambulatory Care aligns to ultimate outcomes

Strategic Approach to Network Fortification and Development‐ Begin with our greatest control points – LPG, PCMH‐ Rapid deployment and socialization process in LPG and then to PHO‐ Unifying massage and value proposition – “What is in it for the physicians”‐ Data Governance and practice confidentiality

Develop a coordinated APM message for all Community Care providers‐MACRA/MIPS‐ Bundles/ACO‐Medicaid MCO

Objective 2Align Provider Community

How

NETWORK TEAM ‐ Comprehensive and Precision Contracting ‐ Refresh and Fortify Physician Network with new payment models, technology investments and MACRA‐ Network Fortification and development with disciplined account management approach‐ Onboarding Communications and training certification‐ Performance management tied to Provider Performance Dashboards

Region 8 Providers

PHO

LPG

LPG‐PCMH

{Momentum = Mass (X) Velocity}

“ We need alignment to purposeand a heightened operating urgency”

What


VBP Operating Model –‐ National Best Practices Model – Vendor to Enable our Transformation‐ Next Generation ACO and Medicare Bundled Payment Leadership‐ Accredited and Proven Transformation Models‐ Experience with Leveraging EMR (Electronic Medical Records)

Select 2017 Populations for Centralized and Tiered Case Management‐ Leverage Lee County clinical footprint of existing transformation efforts‐Medical/Clinical saturation analysis and Development of Care Pathways‐ Potential outcome improvements‐ Focus on Existing VBP Arrangements and Contracts

Business Case for ACO and CMS Bundles Expansions‐ Financial models‐ Clinical Case Management pro‐formas and P&L’s‐ Provider development and patient engagement plans‐ IT and Analytic Governance Process

Objective 3Performance Based Management

How

Imperatives Corporate Operating Discipline Regulatory/Compliance IT and Capital Discipline Fixed Cost Leverage Expense Governance Revenue and Provider Performance

Revenue Cycle Management‐ New Risk Adjustment Process – Need to accelerate ambulatory HCC coding‐ Payer relations and contracting – push and accept expanded risk arrangements (MA and Commercial)‐ Collections and accounts receivable, coordination of benefits and subrogation‐ Provider Payment and Reconciliation Process – flow more savings down stream

Employee Activation‐ Transform Operating Environment with Change Management Agenda‐ Executive outreach – Sense of Urgency, Shared Vision, Coalition‐ Empower with New Partnerships, Communicate Wins, Eliminate Obstacles‐ Sustain Change with emphasis on new techniques and duplicate

Delivery, Resources, Infrastructure

Capitalization and OPEX Prioritization‐ Business Cases for Ambulatory Care, Community Alignment, Home Care‐ Rationalization of Real Estate footprints and service line delivery‐ Align to CMS Bundles and Medicaid MCO models‐

Business Intelligence, Medical Economics and Data Governance‐ New Risk Adjustment Process – Need to accelerate ambulatory HCC coding‐ Payer relations and contracting‐ Collections and accounts receivable, coordination of benefits and subrogation‐ Provider Payment and Reconciliation Process – flow more savings down stream

What

Population Surveillance Risk Detection Revenue Management

Population SegmentationMore Individuals, Lower Cost Fewer Individuals, Higher Cost

Active/Healthy Episodic Care Significant Diagnosis Co‐Morbid

Healthy Moderate At Risk Acute ChronicWellness and Prevention

Proactive WellnessPrevention Campaigns

CommunityHealth OptimizationPersonalization

Rewards

Provider Engagement

Tier 2 Case ManagementOutreach and EngagementProvider CollaborationHome Monitoring

Medication Adherence Specialized CaseManagement

Tier 3 Case ManagementSpecialized Staff

Narrow Provider NetworkComprehensive TreatmentMedication AdherenceCMS Care Bundles

Patient Education

Tier 1 Case ManagementTargeted EducationAlternative SupportCommunity Linkages

CCBT

High RiskCare Management

Disease ManagementLong Term Care

Daily Assisted LivingCaregiver Support

Lee Health’s Case Management Architecture that supports all pathway interactions designed with the patient in mind and focused

on improving outcomes not just managing activities

Wellness

Clinical Triage

Risk/RevenueScoringAlgorithm

Population – Care Pathways“Risk and Revenue” defined Care Pathway triggered by the physician, algorithmically scored and the

managed across the entire care continuum of Medical Sites of Care, Pharmacy and Behavioral supporting modalities.

Tier 3 Intensive Case Management

Tier 2 Case Management

Tier 1 Case Management

HIGH

LOW

Episode

Episode

Case Acuity

Social

Life Style

Outcome – Provider IntegrationPopulation Health through “Aligned Providers” Focused on Complete Care

Lee PhysicianGroup

Acute Care Post –AcuteFacilities

PHO

Medical

Well

Diagnostics

Procedures

Scans

Acute

NutritionPhysicalTraining

Supplementation

Labs

Imaging

RX

GenomePhysicalTherapy

BehavioralChiro Homeopathic

HomeCare

SpecialtyCare

Population Health Opportunities

‐ State of FL Medicaid Procurement‐ Federal Medicare Next Generation ACO

Advancing and Unifying our EffortsLH has several “Marketplace Events” that will create additive opportunity.

FL Medicaid Re‐Procurement

ACO Next Generation

CMS Payment Bundles

ASOEmployer

Improvement to Margin (Loss)

Risk and

Com

plexity

Building Upon Each Other

• Medicaid is the Foundation and also the most urgent margin improvement need

• Success in Medicaid will prepare LH to apply for and achieve ACO Status for Medicare

• Success with ACO and Payment Bundles together will drive better Medicare Reimbursement and Align Preventative, Wellness, Acute and Population Health

• Aligned Population Health will Drive ability to serve Regional Self Insured Employers

Opportunity – “The What”

Lee Health holds 52% of the total Medicaid discharge volume across all 7 counties in Region 8

Underwriting margin, system contribution from more appropriate reimbursement and asset value of health plan

Hedge for rate cuts, diversification into insurance business and economies of scale

Spurs innovation, encourages population health and fosters deeper community relationships

State of FL is initiating a rebid of Medicaid. Provider Service Networks are encouraged to submit bids Lee Health is the dominant PSN in Region 8/E – is advantaged Non participation locks LH into payment declines through 2024

The NextGen ACO program is an advanced alternative payment model under MACRA, which enables Lee to qualify for automatic 5‐15% FFS bonus as well as shared savings based on effectively managing risk for Medicare patients

Medicaid PSN Opportunity NextGen ACO Opportunity

Assessment

Definition

Impactto

Lee Health

ROI positive opportunity that satisfies MACRA Requirements for Advanced APM

Provides an attractive value proposition to recruit independent Physicians for network expansion

Provides a credible assessment by CMS of provider’s population health capabilities and ability to build a broader platform for other populations

Lee Health just completed a due diligence process using a national enablement leaderOur system readiness was assessed for current state and capacity to be successful in both opportunities

Opportunity Background and Details

Lee Health Opportunities – “The How”

Capability Review: Consolidate inventory of Lee capability strengths and gaps

around opportunities critical to NG success (e.g., Quality, RAF, CM, Network)

Business Case: Review preliminary business case, financial mechanics and

assumptions including medical expense, efficiency adjustments, impacts of Quality and RAF, clinical / network savings and membership

Business Case: Reviewed preliminary P&L and capital requirements with Ben,

Anne, and Marlon Network: Researched OIR and AHCA facility and provider adequacy

standards Collected data on LPG & PHO physicians’ panel size &

composition Ran network adequacy reports on Lee facilities and providers Researched network partners in Lee County and across Region E

Medicaid PSN Opportunity NextGen ACO Opportunity

Interviews

Current Effort

Next Touchpoint

Finalized business case Network scenarios and recommendations Stakeholder relationship mapping (e.g., OIR, AHCA, advocacy

associations, etc.) PSN licensure requirements and work plan Partnership discussion (governance, capitalization, etc.)

Finalized business case Address any open items / questions (as needed) Partnership discussion Begin preparing materials for review with Senior Leadership

– Anne Rose– Marlon Tyson

Conducted deep‐dive interviews with Lee Health leadership:– Dr. Scott Nygaard– Kris Fay

– Ben Spence– Dr. Leah Lynch

– Dr. Joby Kolsun– Mike Smith

Medicaid PSN Opportunity

Medicaid PSN Opportunity SummaryWhat is the opportunity?

Why is it important for Lee Health?

What have we done so far?

What are next steps?

• Respond to AHCA’s upcoming Invitation to Negotiate (ITN) for Medicaid Managed Care in Florida’s Region E in order to launch aProvider Service Network (PSN) for some portion of the 200K+ lives in Lee County and the surrounding 6 counties

• Current legislation allows for 4 plans in Region E, including a dedicated slot for a PSN

• In addition to health plan economics, a PSN would enable Lee to defend against future rate cuts, spend more premium dollar onmedical expenses vs. administrative overhead, and drive contribution margin through improved FFS rates and quality incentives

• Lee Health, like many other health systems in Florida, have endured persistent rate cuts that cut into the contribution margin for Medicaid; therefore, starting a PSN could provide an important defensive strategy

• Lee Health has built a strong LPG and PHO structure and put many of the building blocks in place for population health and value based care; Medicaid PSN would enable the system to monetize its investments

• Developed a 5‐year health plan business case, including capital requirements

• Conducted network assessment and identified gaps both within Lee County and outside

• Shared process to obtain PSN / HMO license

• Shared process to prepare for ITN response, including ways to influence local stakeholders

• Partner reference calls and Lee Health assessment of Evolent capabilities

• Continue to refine work‐plan for pre‐ITN (license, network development, ITN response)

• Board approve term sheet by early April, sign partnership agreement by end of April 2017

• Respond to ITN (to be released late June 2017, with responses due within 60 days)

Medicaid Procurement Options

Business Models

1. Decline to Respond

2. Build with Vendor (s) and Operate with 100% LH Ownership

3. Build with existing PSN Partner

4. Build with National MCO as a High Performing Network

PROS

Keeps focus on In Flight Initiatives

Subject Matter Expertise with lower operational and financial risk

Moderate Risk reduction and a knowledgeable FL Medicaid Operator

Downside Risk reduced due to direct contract exposure and FL State collaboration

CONS

5 Year Lockout with certain FFS decline

Not LH People with our success dependentupon partnership teams and SLA’s

Only 1 operating PSN in FL currently. Due diligence suggest operating platform is maturing

At the mercy of a national contracting partner demands with limits on upside financial gains attributed to performance

5‐year Business Case for PSN in Region 8

37

1 – Includes minimum net worth, incremental reserves based on 300% of RBC assuming full MLR capitation2 – Reserves in Excess/(Deficit) = Margin of the Plan + Incremental Reserves

Base Case ($M) Pre‐Launch Y1 Y2 Y3 Y4 Y5

Membership ‐ 21.5 K 32.9 K 44.6 K 56.9 K 58.0 K

Market Share % ‐ 10% 15% 20% 25% 25%

Net Premium ‐ $75.7 $120.4 $170.1 $225.4 $238.8

Medical Expense ‐ $67.1 $106.7 $150.7 $199.7 $211.7

MLR % ‐ 88.6% 88.6% 88.6% 88.6% 88.6%

ALR ‐ $7.1 $11.3 $16.0 $21.1 $22.4

ALR % ‐ 9.4% 9.4% 9.4% 9.4% 9.4%

Implementation TBD ‐ ‐ ‐ ‐ ‐

Margin TBD $1.5 $2.4 $3.4 $4.5 $4.8

Incremental Reserves1 ‐$1.5 ‐$3.7 ‐$1.4 ‐$2.4 ‐$2.7 ‐$0.6

Reserves in Excess / (Deficit)2 TBD ‐$2.2 $1.0 $1.0 $1.8 $4.1

PRELIMINARY

Lee Health Has Several Current State Gaps That Partner Would Fill Before Launching PSN

38

PSN CAPABILITY READINESS DASHBOARD

Network Licensure ITN Response Clinical Programs Risk Adjustment Health Plan Operations

High performing Several opportunities identified Critical gaps identified

KEY STRENGTHS CRITICAL OPPORTUNITIES IDENTIFIED

Network –52% of Medicaid volume across all 7 counties in Region 8 (98% market share in Lee County); PHO/LPG would serve as base physicians; compensation model being modified

Licensure / ITN Response – Members of Lee Health leadership have health plan experience

Clinical/Risk Adjustment – Existing embedded care coordinators with some experience in coding; leadership support for improving and investing in new capabilities

Network – build hospital/physician network outside Lee County and contract with ancillary providers (e.g., dental) throughout Region 8

Physician Incentives – Develop compensation model for LPG, PHO, and network physicians

Clinical Programs – Tailor to Medicaid, use non‐NP level resources, measure ROI

Licensure/ITN Response – Identify partner to help Lee Health meet procurement requirements

Health Plan Ops – Identify full service health plan partner to provide ongoing ops

Florida’s Invitation to Negotiate (ITN) will occur late June 2017 for go‐live of January 1, 2019

39

• Expect AHCA to award four (4) plans, including one Medicaid Provider Service Network, in Region 8 (Charlotte, Collier, Desoto, Glades, Hendry, Lee, Sarasota) which has ~200K lives

• Leadership is focused on determining best approach ‐ all options 1 ‐ 4 are in consideration

Florida’s Expected ITN Schedule

Considerations

Complete response

~Sept. 1, 2017

Response Due

~Jan 2, 2018

Agency for Health Care Administration (AHCA) announces awards

Implementation

Jan 1, 2019

Go‐live

~June 27, 2017

ITN Released

Negotiations

~Nov 20 – Dec 29, 2017 ~March 30, 2018

Contract execution

MedicaidMedicaid

Medicare ACO Opportunity

NextGen ACO Opportunity SummaryWhat is the opportunity?

Why is it important for Lee Health?

What have we done so far?

What are next steps?

• The NextGen ACO program is an advanced alternative payment model under MACRA, which enables Lee to qualify for automatic 5% FFS bonus as well as shared savings based on effectively managing risk for Medicare patients

• Non‐binding application due on May 18th, Participant and Preferred Providers due June 9th

• The NextGen ACO model supports a structured transition to value based care paired with a material, performance‐based ROI

• Building the population health capabilities required to be successful in Next Gen enables Lee Health to build a broader value‐based platform for other populations

• By creating an ACO structure, Lee has the opportunity to expand its network before independent PCPs are aligned with other regional ACOs (e.g., Millennium)

• Developed a preliminary 3‐year pro forma

• Assessed Lee Health’s existing capabilities in the context of keys for success in NextGen (Quality, risk adjustment, clinical management, network, and technology)

• Began discussions around the possible organizational model needed to support the ACO

• Finalize business case and priority scenarios

• Partner reference calls and Lee Health assessment of Evolent capabilities

• Align on partnership model (including risk exposure) and estimated costs

• Develop value proposition to and recruit Independent PCPs

• Seek Board approval to file a NextGen application in early April and continue partnership negotiations

Next Gen ACO preliminary Lee Health pro forma with Evolent partnership model

1 Membership estimates based on 2015 QRUR report attribution and projected provider participation2 Based on 2014 medical expense in weighted ACO member counties trended forward based on Next Gen methodology3 Based on 2014 risk‐adjusted medical expense performance relative to regional and national average4 Assumes ACO achieves full 3% risk adjustment improvement on benchmark5 Assumes ACO achieves 85% quality rating in Years 2 and 3 (all ACOs receive 100% in Year 1 for reporting)6 Actual projected MedEx under management, that can be impacted by clinical/network savings7 Potential savings estimated based on starting point of ACO relative to target utilization benchmarks8 Sequestration reduction applied to gainshare payments from CMS (Budget Control Act of 2011)9 Represents total estimated cost to operate Next Gen ACO10 Assumes standard Evolent Next Gen ACO partner model.

2017 2018 2019 2020

Membership1 20,000 22,300 24,900

Baseline Trended MedEx (PMPM)2 $1,108 $1,137 $1,166

CMS Standard Discount -2.25% -2.25% -2.25%

CMS Efficiency Adjustment3 -0.40% -0.40% -0.40%

ACO Coding Improvement4 3.00% 3.00% 3.00%

ACO Quality Improvement5 1.00% 0.85% 0.85%

Total CMS Benchmark Adjustments 1.35% 1.20% 1.20%

NGACO Benchmark (PMPM) $1,122 $1,150 $1,179

ACO MedEx Under Management (PMPM)6 $1,108 $1,137 $1,166

ACO Care Mgmt and Network Savings7 3.60% 4.80% 6.00%

NGACO Actual Spend (PMPM) $1,068 $1,082 $1,096

NGACO Actual Spend (Total $M) $256.32 M $289.57 M $327.54 M

Total ACO Gainshare8 $12.77 M $17.72 M $24.40 M

OpEx % Benchmark9 0.69% 2.50% 2.50% 2.50%

EVH Portion of (Gainshare) / Loss10 $0.00 M ($0.47 M) ($1.36 M)

ACO Operating Profit / (Loss) ($1.79 M) $6.03 M $9.56 M $14.23 M

NPV (10% Discount Rate) = $22.3 M Cumulative Value = $28.0 M IRR = 382%

PRELIMINARY

Initial review of Lee Health capabilities indicates some strengths and readiness to move forward as well as key gaps to acknowledge

NextGen ACO Capability Readiness Dashboard

Quality Risk Adjustment Clinical Programs Network Tech

High performing

Several opportunities identifiedCritical gaps identified

Key Strengths Critical Opportunities Identified

Clear leadership support and buy‐in for improvement in population health and initial investments in new leadership, tools, and capabilities

Established network (PHO, SNF / Home Health / Rehab owned by Lee Health) and some network affiliations

Experience with CMS quality reporting (GPRO)

Existing embedded RN care coordination and coding staff

Advanced analytics and effective risk stratification of patients coupled with a dedicated clinical program suite and supportive workflow tools

Prioritization of initiatives vs. opportunity ROI, clear performance targets and aligned incentives

Stronger clinical workflow integration and role alignment across RAF, care management, physicians and practice teams

Broader and deeper physician education and engagement in population health efforts

Timeline for Application Requires Near Term ActionCM

S Deadlines Jan 17th

Released Request for Applications

(RFA)

Feb

Non‐Binding LOI Available

March

Application Available

Fall 2017

CMS Approval Decision

Partne

rship

Mileston

es

June 9th

Participant Provider List Due

March/April

• Mutual Due Diligence Completed

• Site visit to Evolent HQ

• Application Development

Jan 1st

Contract Go‐Live

Fall 2017

• Risk Adjustment Program Begins

• Load claims and configure Identifi

• Hire staff and build care management programs

Jan Feb March April May June July Aug Sept Oct Nov Dec

Next Generation ACO Launch

May

4th: Non‐Binding LOI Due

18th: Next Gen Application Due

Feb

• Decision to move forward with diligence

• Evolent to support non‐binding LOI to CMS

April/May

• Application Filed

• Partner/Evolent Definitive Agreement Finalized

THANK YOU!


General

Discussion (All Board Members)


Next Steps

(Sanford Cohen, M.D., Board Chairman)

ADJOURNMENT

DATE OF THE NEXT REGULARLY SCHEDULED

MEETING

QUALITY, SAFETY & EDUCATION AND FULL BOARD OF DIRECTORS

THURSDAY, April 13, 2017

1:00 P.M.

Gulf Coast Medical Center- Boardroom Medical Office Building

13685 Doctors Way Ft. Myers, FL 33912

Workshop: Pathway To Value Based Care Thursday, … To Value Based Care Thursday, April 6, 2017 1:00...

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Transcript of Workshop: Pathway To Value Based Care Thursday, … To Value Based Care Thursday, April 6, 2017 1:00...