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PRELIMINARY DRAFT Episode-Based Care Model Overview Tutorial November 2012 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Contents ▪ Introduction ▪ Description of Episode Based Payment ▪ How Incentive Payments are Calculated ▪ Reviewing an Example Episode: Upper Respiratory Infection ▪ Tools for Providers 1 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Today, we face major health care challenges in Arkansas ▪ The health status of Arkansans is poor, the state is ranked at or near the bottom of all states on national health indicators, such as heart disease and diabetes ▪ The health care system is hard for patients to navigate, and it does not reward providers who work as a team to coordinate care for patients ▪ Health care spending is growing unsustainably: – Insurance premiums doubled for employers and families in past 10 years (adding to uninsured population) – Large projected budget shortfalls for Medicaid 2 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE In the face of these realities, Arkansas aims to create a sustainable Focus of presentation patient-centered health system Objective Care delivery strategies Enabling initiatives Accountability for the Triple Aim ▪ Improving the health of the population ▪ Enhancing the patient experience of care ▪ Reducing or controlling the cost of care Population-based care delivery ▪ Risk stratified, tailored care delivery ▪ Enhanced access ▪ Evidence-based, shared decision making ▪ Team-based care coordination ▪ Performance transparency Episode-based care delivery ▪ Common definition of the patient journey ▪ Evidence-based, shared decision making ▪ Team-based care coordination ▪ Performance transparency Payment improvement initiative Health care workforce development Consumer engagement and personal responsibility Health information technology adoption SOURCE: State Innovation Plan 3 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE This presentation will give an overview of the payment improvement initiative Focus of presentation Examples 1 Medical homes 2 Health homes Populationbased care delivery 3a Retrospective episodes Episode-based care delivery Assessment 3b based episodes ▪ ▪ ▪ URI ADHD Perinatal ▪ ▪ LTSS DD 4 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Contents ▪ Introduction ▪ Description of Episode Based Payment ▪ How Incentive Payments are Calculated ▪ Reviewing an Example Episode: Upper Respiratory Infection ▪ Tools for Providers 5 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE The episode-based model is designed to reward coordinated, team-based, high-quality care for specific conditions or procedures DETAILS TO FOLLOW The goal Accountability Incentives Coordinated, team-based care for all services related to a specific condition, procedure, or disability (e.g., pregnancy episode includes all care prenatal through delivery) A provider ‘quarterback’, or Principal Accountable Provider (PAP) is designated as accountable for all pre-specified services across the episode (PAP is provider in best position to influence quality and cost of care) High-quality, cost-efficient care is rewarded beyond current reimbursement, based on the PAP’s average cost and total quality of care across each episode 6 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE The model rewards a Principal Accountable Provider (PAP) for leading and coordinating services and ensuring quality of care across providers PAP role Core provider for episode Episode ‘Quarterback’ Performance management What it means… ▪ Physician, practice, hospital, or other provider in the best position to influence overall quality, cost of care for episode ▪ Leads and coordinates the team of care providers ▪ Helps drive improvement across system (e.g., through care coordination, early intervention, patient education, etc.) ▪ Rewarded for leading high-quality, costeffective care ▪ Receives performance reports and data to support decision-making PAP selection: ▪ Payers review claims to see which providers patients chose for episode related care ▪ Payers select PAP based on physician with the main responsibility for the patient’s care NOTE: Episode and health home model for adult DD population in development. Model will utilize lead provider and health home to drive coordination 7 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Ensuring high quality care for every Arkansan is at the heart of this initiative, and is a requirement to receive performance incentives Two types of quality metrics for providers 1 Quality metric(s) “to pass” are linked to payment 2 Quality metric(s) “to track” are not linked to payment Description Core measures indicating basic standard of care was met Quality requirements set for these metrics, a provider must meet required level to be eligible for incentive payments In select instances, quality metrics must be entered in portal (heart failure, ADHD) Key to understand overall quality of care and quality improvement opportunities Shared with providers but not linked to payment 1 There are 5 or fewer per episode 8 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE How episodes work for patients and providers (1/2) 1 Patients and providers deliver care as today (performance period) Patients seek care and select providers as they do today 2 3 Providers submit claims as they do today Payers reimburse for all services as they do today 9 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE How episodes work for patients and providers (2/2) 4 Calculate incentive payments based on outcomes after performance period, typically 12 months long Review claims from the performance period to identify a ‘Principal Accountable Provider’ (PAP) for each episode 5 Payers calculate average cost per episode for each PAP1 Compare average costs to predetermined ‘’commendable’ and ‘acceptable’ levels2 6 Based on results, providers will: ▪ Share savings: if average costs below commendable levels and quality targets are met ▪ Pay part of excess cost: if average costs are above acceptable level ▪ See no change in pay: if average costs are between commendable and acceptable levels 1 Outliers removed and adjusted for risk and hospital per diems 2 Appropriate cost and quality metrics based on latest and best clinical evidence, nationally recognized clinical guidelines and local considerations 10 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Contents ▪ Introduction ▪ Description of Episode Based Payment ▪ How Incentive Payments are Calculated ▪ Reviewing an Example Episode: Upper Respiratory Infection ▪ Tools for Providers 11 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Guiding principles that payers use to determine cost levels (e.g., ‘commendable’ and ‘acceptable’ thresholds) and incentive payments 1. Reward high quality, efficient delivery of clinical care 2. Promote fairness by considering patient access, provider economics, and changes required for improvement 3. Acknowledge that poor performance is a reality and should not be rewarded 4. Protect quality and access by setting a gain sharing limit at a reasonable, achievable level 5. Sustain thresholds for reasonable period to allow for adjustment and learning 12 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Here’s how the payment system works In addition to your normal payments… There will be a commendable threshold ▪ If your average costs are below the commendable threshold and quality standards are met, you share in the savings There will be an acceptable threshold ▪ If your average costs are above this threshold, you will have to share the additional costs There will be a gain sharing limit ▪ If your average costs are below the gain sharing limit and quality standards are met you will receive a share of the savings up to this limit 13 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE What does this mean for you as a provider? There can be many winners ▪ Aim is to have as many providers receive rewards as possible ▪ Risk/reward levels are set so as to make this a reality 14 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Each payer assesses historic provider average costs for an episode… Year 1: Preparatory period Year 1: Distribution of provider costs 15 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE … then selects thresholds to promote high quality, guideline-based and cost effective care Year 1: Preparatory period Year 1: Distribution of provider costs High Acceptable Commendable Gain sharing limit Low Individual providers, in order from highest to lowest average cost 16 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Selected thresholds applied to provider performance in the following year… even though we expect that cost effectiveness will have improved Year 2: Performance period Year 1: Distribution of provider costs Year 2: Distribution of provider costs High Acceptable Commendable Gain sharing limit Low Individual providers, in order from highest to lowest average cost 17 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Providers that meet quality standards and have average costs between commendable and the gain sharing limit share in the savings Shared savings Year 2 performance High Acceptable Average cost per episode for each provider Commendable Gain sharing limit Low Individual providers, in order from highest to lowest average cost 18 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Providers with average costs between commendable and acceptable Shared savings receive neither risk-share nor gain-share Year 2 performance High Acceptable Average cost per episode for each provider Commendable Gain sharing limit Low Individual providers, in order from highest to lowest average cost 19 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Providers with average costs above the acceptable limit will have to share Shared savings in these costs Year 2 performance Shared costs High Acceptable Average cost per episode for each provider Commendable Gain sharing limit Low Individual providers, in order from highest to lowest average cost 20 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Providers meeting quality standards that have average costs below the gain sharing limit will share in the savings up to a limit to protect quality of Shared savings care Year 2 performance Shared costs High Acceptable Average cost per episode for each provider Commendable Gain sharing limit Low Individual providers, in order from highest to lowest average cost 21 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE What does this mean for you as a provider? Average costs are what count ▪ Extraordinary cases that exceed cost outlier thresholds are excluded ▪ Other extraordinary cases removed based on clinical exclusion criteria ▪ Where appropriate, remaining cases riskadjusted based on age, co-morbidities, and other factors 22 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Let’s take a look at an individual provider and see how we establish his or her performance level Year 2 performance Year 2 performance High Acceptable Average cost per episode for each provider Individual provider Commendable Gain sharing limit Low Individual providers, in order from highest to lowest average cost 23 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE For each Principal Account Provider, actual costs for each episode will vary according to patient needs and the cost effectiveness of delivery Unadjusted Year 2 performance Gain sharing limit Commendable Acceptable Number of episodes Low Cost per episode for an individual Principal Accountable Provider (unadjusted) High 24 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE At the end of the period, the payor performs a risk-adjustment to account for patient-specific factors… Unadjusted Year 2 performance Risk adjusted Gain sharing limit Commendable Acceptable Number of episodes Low Cost per episode for an individual Principal Accountable Provider (adjusted) High 25 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE …and outliers are removed Outliers removed Year 2 performance Gain sharing limit Commendable Acceptable Number of episodes Low Cost per episode for an individual Principal Accountable Provider (adjusted) High 26 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE A Principal Accountable Provider’s performance is assessed based on his or her adjusted cost averaged across all non-outlier episodes Outliers removed Gain sharing limit Commendable Acceptable Number of episodes Average adjusted episode cost Low Cost per episode for an individual Principal Accountable Provider (adjusted) High 27 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Contents ▪ Introduction ▪ Description of Episode Based Payment ▪ How Incentive Payments are Calculated ▪ Reviewing an Example Episode: Upper Respiratory Infection ▪ Tools for Providers 28 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Upper Respiratory Infection (URI) example: Patient care journey URI1 General (colds) and Sinusitis Patient experiences symptoms Patient contacts 1 doctor Patient visits doctor 2 3 Work-up Pharyngitis (sore throat) Patient experiences symptoms Patient contacts 1 doctor Antibiotics Patient visits doctor 3 2 Strep test Antibiotics Opportunities along patient journey 1 Cost-effective use of care settings and providers 2 Appropriate use of diagnostics 3 Appropriate use of prescriptions 1 Non-specific URI 29 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE URI example: Clinical opportunity to improve antibiotic prescription rates National guidelines Arkansas prevalence Antibiotic prescription rate, Arkansas Medicaid, SFY2010 % of general URI1 episodes resulting in filled antibiotic prescription Each extra prescription puts an Arkansan at risk and adds unnecessary costs to system Clinical evidence tells us: In 95% of cases, Antibiotics are not indicated for general URI 49% < 5% National Guidelines Arkansas Medicaid, SFY 20102 1 Non-specific URI; 2 For adults, age ≥ 18 SOURCE: Arkansas Medicaid claims, SFY2010 30 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE URI example: Distribution of provider average costs for general URI in SFY2010 Provider average costs for general URI episodes Average episode cost per principal accountable provider1 Average cost / episode Dollars ($) 150 125 100 75 50 25 0 Principal Accountable Providers 1 Each vertical bar represents the average cost and prescription rate for a group of 10 providers, sorted from highest to lowest average cost SOURCE: Arkansas Medicaid claims paid, SFY10 31 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE URI Example: Episode design specifics (1/2) ▪ A URI episode starts with patient’s first office, clinic or emergency department (ED) What is included in the episode? visit resulting in a primary diagnosis of acute ambulatory URI (Non-specific, Pharyngitis, or Sinusitis) ▪ Episode lasts for 21 days starting on the day of diagnosis ▪ Episode includes all services related to URI treatment delivered within the 21 day episode, in any setting, including – Initial visit(s) – Follow-up visits for cough – Labs, imaging, and other outpatient claims – Antibiotics, antivirals and corticosteroids commonly used for URI, filled during the episode ▪ Episode excludes – Non-prescription medications (e.g., over the counter) – Immunizations used for preventative care – Surgical procedures or transport ▪ The first provider to diagnose1 the URI is the Principal Accountable Provider Who is the PAP? (PAP)2,3, even if additional providers are seen during the episode duration 1 Primary diagnosis only ; 2 Medicaid enrolled clinician 3 Based on objective criteria; final PAP determination to be made by each payer independently 32 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE URI Example: Episode design specifics (2/2) How are we ensuring quality is at the core of the episode design? Which episodes are excluded when calculating PAP performance? ▪ Episode performance evaluation includes quality metrics1 – Directly related to payment ▫ Frequency of antibiotic use for patients with acute pharyngitis who do not receive a strep test – For reporting only ▫ Frequency of antibiotic usage ▫ Average number of visits ▫ Frequency of multiple courses of antibiotics during one episode ▪ To ensure the PAP’s results are clinically relevant and fair, we exclude episodes of care for select patients – Infants less than 1 year old – Patients without continuous coverage throughout episode – Inpatient stays or hospital monitoring during the episode – URI related surgical procedures (tonsillectomy, adenoidectomy) – Select comorbidities diagnosed at least twice within prior year (asthma, cancer, chronic URI, end-stage renal disease, HIV and immunocompromised conditions, post-transplant, pulmonary disorders, rare genetic diseases, sickle cell) – Select comorbidities diagnosed in episode (croup, epiglottitis, URI with obstruction, pneumonia, influenza, otitis media) 1 For quality metrics “directly related to payment,” PAPs must meet specified quality requirements to be eligible for gain sharing. “Reporting only” indicates quality measure included in PAP reports but not tied directly to payment. 33 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE URI example: Over time, if providers improve performance more will share in savings Illustrative provider average costs for general URI episodes Average episode cost per principal accountable provider1 ILLUSTRATIVE Year 3 average cost / episode Dollars ($) 150 125 100 - Pay portion of excess costs No change in payment to providers + Receive additional payment as share as savings 75 50 25 0 “Acceptable” “Commendable” Gain share limit PAPs 1 Each vertical bar represents the average cost for a group of 10 providers, sorted from highest to lowest average cost 34 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE Contents ▪ Introduction ▪ Description of Episode Based Payment ▪ How Incentive Payments are Calculated ▪ Reviewing an Example Episode: Upper Respiratory Infection ▪ Tools for Providers 35 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE PAPs will be provided new tools to help measure and improve patient care ▪ ▪ Overview of cost effectiveness (how a PAP is doing relative to cost thresholds and relative to other providers) Overview of utilization and drivers of a PAP’s average episode cost Medicaid Little Rock Clinic 123456789 July 2012 Performance summary (Informational) Upper Respiratory Infection – Pharyngitis Upper Respiratory Infection – Sinusitis Quality of service requirements: Not met Quality of service requirements: N/A Average episode cost: Acceptable Average episode cost: Commendable Your gain/risk share You are not eligible for gain sharing Your gain/risk share Medicaid $0 Little Rock Clinic 123456789 $x You will receive gain sharing July 2012 Summary – Pharyngitis Overview Upper Respiratory Infection – Perinatal Total episodes: 262 Non-specific URI Your gain/risk share < $70 to $100 cost: Average $70 episode Acceptable Gain/Risk share $0 You > $100 All provider average You are not eligible for gain sharing Quality requirements: Not met Average episode cost:Clinic Acceptable Little Rock Medicaid Your gain/risk share Cost summary $x Quality summary $0 You will not receive Quality and utilization detail gain or the risk sharing You did not meet minimum quality requirements Your average cost is acceptable You Quality metrics – linked to gain sharing Attention Deficit/ Hyperactivity Disorder (ADHD) Quality of service requirements: N/A Average episode cost: Acceptable % episodes with strep test when antibiotic filled $0 % episodes with 6% multiple courses of antibiotics filled July 2012 Metric with a minimum quality requirement Your total cost overview, $ Minimum quality requirement Average cost overview, $ 81 20,150 Percentile You 25th 50th 75th Metric 66% % of episodes You (nonYou that hadYou a strep 30% 5% adjusted) test when an anti-biotic(adjusted) was filled % episodes with at least one antibiotic filled 123456789 – Pharyngitis Quality metrics: Performance compared to provider distribution 25,480 84 48% Quality metrics – not linked to gain sharing Your gain/risk share You will not receive gain or risk sharing Total episodes excluded: 29 Quality of service requirements: Met Not acceptable Commendable Acceptable Average episode cost: Not acceptable You are subject to risk sharing Total episodes included: 233 Cost of care compared to other providers Quality of service requirements: N/A 64% 0 99% - % of episodes with at cost leastdistribution one Your episode 64% antibiotic filled 44% 60% 75% - % of episodes 50 with 23 15multiple courses of antibiotics filled 3% 80 100 $40 58% All providers 10% $40$55 29 $55– $70 6% $70– $85 45 23 10% $85$100 Percentile 50 25 81% Medicaid 123456789 Total episodes included = 233 You Utilization80 metrics: Performance compared to provider distribution # and % of episodes 60 3 Percentile Percentile with claims in care Care Metric You 25th 50th 75th 0 25 50 40 category category Average number of visits per episode All providers You July 2012 – Pharyngitis You did not meet the Cost minimum detail acceptable quality requirements Distribution of provider average episode cost Does not meet minimum quality requirements Minimum quality requirement 100 Little Rock Clinic - 18 20% 75 $100- >$115 $115 Cost, $ ▪ Overview of quality across a PAP’s episodes Example of provider reports # episodes Reports provide performance information for PAP’s episode(s): Commendable 1.7 1.1 Acceptable 1.3 2.3 Percentile Outpatient Not acceptable professional 89 75 Average cost per episode when care 100 category utilized, $ 49% 500 51% 600 All providers Total cost in care category, $ 10,625 9,492 Key utilization metrics Avg number of visits per episode % episodes with antibiotics You 48% 77 AllEmergency providers department 1.7 1.1 64% 3,000 52% 30% 221 Pharmacy 4 2,500 59 1,237 97% 51 1,307 Outpatient radiology / procedures 184 Outpatient lab 21 9% 194 11% 179 Outpatient surgery 16 7% Other 79% 81 1,321 77% 81 944 2,260 1,251 1,400 5% 12 3,865 3,409 95% 1,062 5% 62 3% 69 5 1,400 1,062 433 643 6 NOTE: Episode and health home model for adult DD population in development. Tools and reports still to be defined. 36 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE PAP performance reports have summary results and detailed analysis of episode costs, quality and utilization Details on the reports ▪ First time PAPs receive detailed analysis on costs and quality for their patients increasing performance transparency ▪ Guide to Reading Your Reports available online and at this event – Valuable to both PAPs and non-PAPs to understand the reports ▪ Reports issued quarterly starting July 2012 – July 2012 report is informational only – Gain/risk sharing results reflect claims data from Jan – Dec 2011 ▪ Reports will be available online via the provider portal NOTE: Episode and health home model for adult DD population in development. Tools and reports still to be defined. 37 PRELIMINARY WORKING DRAFT; SUBJECT TO CHANGE The provider portal is a multi-payer tool that allows providers to enter quality metrics for certain episodes and access their PAP reports Details on the provider portal Login to portal from payment initiative website ▪ Accessible to all PAPs – Login with existing username/ password – New users follow enrollment process detailed online ▪ Key components of the portal are to provide a way for providers to – Enter additional quality metrics for select episodes (Hip, Knee, CHF and ADHD with potential for other episodes in the future) – Access current and past performance reports for all payers where designated the PAP NOTE: Episode and health home model for adult DD population in development. Tools and reports still to be defined. 38