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Payment Models and
Provider Collaboration
SYNC: Transforming Healthcare
Leadership
September 16, 2016
Agenda
• Overview of Payment Model and Structure
• Mandatory Programs Across the Continuum
• Voluntary Programs
Overview of
Payment Model
Structure
HHS Goals
• January 2015, directional goals set for
advancing payment reform.
2016
2018
Value Based Payments
85%
30%
90%
Alternative Payment
50%
4
HCPLAN Framework: January 2016
Source: Alternative Payment Model Framework and Progress Tracking Workgroup, “Alternative Payment Model (APM) Framework”,
HCP-LAN. 12 Jan 2016. Web. 31 Jan 2016
.
5
Where Are We Going?
Source: Alternative Payment Model Framework and Progress Tracking Workgroup, “Alternative Payment Model (APM) Framework”,
HCP-LAN. 12 Jan 2016. Web. 31 Jan 2016
.
6
CMMI Programs
7
Continuum Emphasis
Acute
Post Acute
Ambulatory
8
Transparency Focus
•
•
•
•
Physician Compare
Star Ratings
Patient empowerment
State efforts
9
Mandatory
Programs Across
the Continuum
Mandatory Payment Reform is
Everywhere
VBP
PQRS/VM
SNF VBP
RRP
MU
HH VBP
HAC
MIPS/APM
CJR
Cardiac Bundles*
* These are in proposed form at this time.
11
Acute: VBP/RRP/HAC
Base of $100,000,000 of Medicare Part A Revenue
$7,000,000
$6,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$4
$0
($1,000,000)
Readmission
Hospital Acquired Condition
Value Based Purchasing
($1,000,000)
($2,000,000)
($2,000,000)
($3,000,000)
($3,000,000)
($4,000,000)
Current
Total Incentive
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Performance Periods
13
MACRA
• Known as the “SGR Fix”
• Created the Quality Payment Program
• Choice of two paths for each physician practice:
APM vs MIPS
– Most physicians in MIPS path by default
• Proposed rules have program starting in 2019
with performance period effective 1/1/17
• Recently offered flexibility in timing of
implementation
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What is MIPS?
9%
10%
7%
8%
6%
4%
4%
5%
2%
0%
-2%
2019
2020
2021
2022+
-4%
-6%
-4%
-5%
-8%
-7%
-10%
-9%
Upside
Downside
Source: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/MACRA-MIPSand-APMs/NPRM-QPP-Fact-Sheet.pdf
Decision Tree for QPP
Am I in an APM?
No
No
Neither
Yes
Yes
Is it an Advanced
APM?
Do I meet
minimum
criteria?
No
Yes
Do I meet the
volume or
revenue criteria?
No (Option of Partial Qualifying, if not, then MIPS Path)
Yes
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MIPS Optimization
A sample practice with $25M in Medicare fee schedule payments
Incentive
$2,500,000
Penalty
10% Bonus
$2,500,000
$2,500,000
$2,500,000
$2,250,000
$1,750,000
$1,250,000
$1,000,000
2019
2020
-$1,000,000
2021
2022
-$1,250,000
-$1,750,000
-$2,250,000
Does not include the adjustment factor of up to 3X per year
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Significant Strategic Implications
• What should you be doing now by type of
entity?
• How are you performing now on QRUR?
• How prepared are affiliation as well as
employed practices?
• What are your market dynamics?
• How does this tie to system wide initiatives?
18
Skilled Nursing VBP
• To start in 2019 with 2% of Medicare
reimbursement at risk
• 2014 SGR fix used part of the 2% to pay for
the fix so facilities can’t earn it all back
• Key metrics are readmissions
• Published on nursinghomecompare
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Home Health VBP
• 5 year pilot in 9 states: Virginia is not one of
them
• 4 domains with shifting metrics
• At risk reimbursement starts at 4% and goes
to 9% in 5 years
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Voluntary
Programs
ACOs
• Currently 434 Medicare Shared Savings
Programs
• Other Medicare ACOs: Pioneer ACO, ACO
Investment Model, Next Generation ACO
• Modifications continue to the models
• Annual classes of ACOs
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Financials: MSSP Track 2
$100,000,000
$98,000,000
$98,100,000
$96,900,000
$96,000,000
$95,000,000
$94,000,000
$93,400,000
$93,100,000
$92,000,000
$91,228,000
$90,000,000
$88,000,000
$86,000,000
Historical Spend
Actual Spend
Year 1 Q: 100%
2% Min Savings Rate
Year 2 Q:80%
Year 3 Q: 90%
2% Min Loss Rate
Assumes no changes in target or risk adjustments for simplicity
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Let’s Do The Math
Did the spend exceed the
MSR or MLR?
How much savings/loss
Year 1
Year 2
Year 3
Yes
No
Yes
$3,772,000
($3,100,000)
What is the quality score?
100%
90%
What is the share rate?
60%
1-(60%*90%)=.46
Total savings/loss shared
$2,263,200
($1,426,000)
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Bundled Payments
• Prometheus (Provider payment Reform for
Outcomes, Margins, Evidence, Transparency,
Hassle Reduction, Excellence, Understandability
and Sustainability): 21 bundles
• State Medicaid Programs:
– Initiated as part of reform efforts: Arkansas, Ohio, Tennessee, and more under planning
stages.
• Commercial Programs
– Largely cardiac and orthopedic in nature and not pervasive geographically
• Medicare Programs:
– Bundled Payment for Care Improvement (BPCI): 48 bundles
– Comprehensive Care for Joint Replacements (CJR): 1 mandated bundle
Medicare Bundles (finalized)
Bundled Payment for Care
Improvement (BPCI)
Comprehensive Care for Joint
Replacement (CJR)
# of Providers Participating
Over 1500: Across providers
789 Hospitals
Voluntary/Mandatory
Voluntary
Mandatory
Diagnoses Covered
Up to 48 Choices of Episodes:
Currently over 14,000 live
Single Episode: Hips/Knees
Time Frame
3 years with extension
5 years
Price Determination
Historical Spending
Blend: Historical and Regional
What’s next?
On July 25, 2016 CMS issued proposed rules for two cardiac bundles and an
expansion of the CJR bundle. This is proposed to start on July 1, 2017.
Let’s Do the Math
$40,000
$35,000
$3,500
$30,000
$3,000
$25,000
$2,000
$20,000
$3,000
$1,000
$4,000
$1,000
$500
$3,000
$4,000
$5,000
$15,000
$8,000
$10,000
$3,000
$1,800
$12,000
$5,000
$8,000
$0
Episode 1
Acute
Physician
Episode 2
SNF
HH
IRF
OP
LTACH
Readmission
What if the target price is $25,000 for Episode 1 and $30,000 for Episode 2?
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New Cardiac & Expanded CJR
Bundles/EPMs
• New Acronym: Episode Payment Model= EPM
• Proposed Rules issued July 25, 2016 with
comment period open for 60 days.
• Cardiac: AMI (DRGs 280-282 and PCI DRGs 246251) & CABG (DRGs 231-236
• Orthopedic: SHFFT: Surgical hip/femur fracture
treatment excluding LEJR (DRGs 480-482)
• 90 day episodes and 5 year program with first
performance year truncated starting 7/1/17
through 12/31/17
EPMs continued…
• No downside risk the first performance year (7/1/1712/31/17)
– Downside risk starts in the 2Q in the second performance
year
• Settlement is retrospective and performed annually
• Discounts determined similarly to CJR starting at 3% for
unacceptable and acceptable quality down to 2% and
1.5% for good and excellent ratings respectively
AMI
CABG
SHFFT
• Quality metrics and weights:
Mort-30
50%
Excess Days
20%
HCAHPS
20%
Complications
Voluntary
75%
25%
40%
50%
10%
10%
EPMs Continued…
• Who is mandated for these EPMs?
– SHFFT: to expand in the 67 MSAs for CJR
– AMI and CABG: will be mandated 98 in MSAs out of 294
eligible MSAs (total n= 384)
• Hospitals are the episode initiators (at risk)
• 3 years historical information like
BPCI and CJR
• Pricing will phase to regional
like CJR:
• Regions= 9 US Census Divisions
Specialty Models
Oncology Care Model
• 6 month episode
• Oncology practice based
• Part A,B and some D
• 21 participants: April 2016
• 2nd class planned
• Shared savings model with target
prices based on historical spend by
type of cancer
Comprehensive ESRD Care Model
• Annual spend
• Two types: large dialysis and non
large dialysis organizations
• 2nd class applications due
7/15/16
• Shared savings model based on 3
year historical spend
Independence At Home
• Objective is to test effectiveness of delivering
comprehensive primary care services at home
specifically to patients with multiple chronic
conditions
• Currently 14 sites involved for 3 year program
• Tracked spending and quality measures
• 2nd year results announced 8/9/16
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Year 2 Results
6 of the Practices
Year 2 Target
Year 2
Expenditures
Incentive
Payment
Boston Medical Center
$4,148
$4,236
$-
Christiana Care Health System
$3,911
$4,450
$-
Cleveland Clinic Home Care
$3,619
$3,565
$-
Housecall Providers
$3,233
$2,393
$1,107,295
Mid Atlantic Consortium
$4,076
$3,576
$866,865
Northwell HealthCare
$3,276
$2,708
$874,151
All sites improved quality from first performance year.
An average of $1,010 per beneficiary for the 10,484 beneficiaries was saved.
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Post Acute Networks
• Formalizing preferred providers by post acute
provider type
• Hold preferred providers accountable based
on quality metrics/outcomes
• Share data on routine basis
• Partner on streamlined protocols
• Gain share or put dollars at risk
34