leading the change maximizing payment models melinda s. hancock, fhfma, cpa partner dhg healthcare...
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Leading the ChangeMaximizing Payment Models
Melinda S. Hancock, FHFMA, CPAPartnerDHG Healthcare2014-15 Chair Elect, HFMA
HFMA Lead #LikeAGirlNovember 14, 2014
"If your actions inspire others to dream more, learn more, do more, and become more, you are
a leader.” – John Quincy Adams
ACA Gains through 2019
Source:CBO and Joint Committee on Taxation, 2010 Projection
Amounts in Billions
Industry Tipping Point
4
Rev
enue
Time
• How do local market conditions impact timing considerations?• Can market-changing events create an urgent paradigm shift?• What is my step-change business model risk?• Do I have the financial tools to adequately analyze relevant states?
Payment Model & Increasing Risk Acceptance
5
Hierarchy of Risk and Payment Models
Alignment of Strategy and MetricsQuestions to Ask
• How many metrics am I tracking?• How many metrics are duplicated?
Do they have the same numerator and denominator? Source?
• Are they aligned with our results and strategic goals?
• What contracts are coming up for renewal that should have new metrics or should be at risk (mgd care, medical directorships, PMAs, etc.)
• What are we focused on?
Reform Timeline
Value Based Purchasing
VBP Shifting of Domain Weights
FY 2013 FY 2014 FY 2015 FY 2016
• Core Measures
• Patient Experience • Efficiency (MSPB)
• Outcomes
New NQS Based Domains for FY 2017
10
HCAHPS = 25%
Safety = 20%
MSPB = 25%
Clinical Care - Process = 5%
Clinical Care - Outcomes = 25%
VBP – FY13 Domain WeightsPerformance Period: July 1, 2011 – March 31, 2012Reimbursement Period: October 1, 2012 – September 30, 2013
Core Measures = 70%
VBP – FY14 Domain WeightsPerformance Period: April 1, 2012 – December 31, 2012Reimbursement Period: October 1, 2013 – September 30, 2014
Core Measures = 45%Outcomes = 25%
VBP – FY15 Domain WeightsPerformance Period: January 1, 2013 – December 31, 2013Reimbursement Period: October 1, 2014 – September 30, 2015
HCAHPS = 30%
Outcomes = 30% MSPB = 20%One Measure!!
Core Measures = 20%
VBP – FY16 Domain WeightsPerformance Period: January 1, 2014 – December 31, 2014Reimbursement Period: October 1, 2015 – September 30, 2016
HCAHPS = 25%
Outcomes = 40%
MSPB = 25%
Core Measures = 10%
15
HCAHPS = 25%
Safety = 20%
MSPB = 25%
Clinical Care - Process = 5%
Clinical Care - Outcomes = 25%
VBP – FY16 Domain WeightsPerformance Period: January 1, 2014 – December 31, 2014Reimbursement Period: October 1, 2015 – September 30, 2016
Value Based Purchasing
• Outcomes = Income
• Mandatory Pay for Performance Program
– 3,500 hospitals are included in this program across the country
• Reimbursement Determine Two Ways:
– Achievement
How we compare to National Top Decile (350 Hospitals)
– Improvement
How we measure against ourselves
Did we do better than a previously measured baseline period
Value Based Purchasing
• Percent of Medicare Reimbursement at Risk
• FY 2013 – 1.00%
• FY 2014 – 1.25%
• FY 2015 – 1.50%
• FY 2016 – 1.75%
• FY 2017 – 2.00%
• FY 2018 – 2.00%
• FY 2019 – 2.00%
• FY 20xx – refers to the Federal Fiscal Year (Oct. 1 – Sep. 30) when DRG
payments will be affected
VBP FY 2016 – New Measures
• Patient Experience
– No Change – Same HCAHPS Measures
• Core Measures
– 5 Dropped; 1 New
• Outcomes
– 3 New Measures
• Efficiency
– No Change
VBP – FY 2016 – Patient Experience
• HCAHPS
– Hospital Consumer Assessment of Healthcare Providers Survey
– An engagement survey CMS has mandated each hospital give to every
discharged inpatient
– Consists of 27 questions that lead to the 8 categories assessed for VBP
– Patients score each question on scale of 4
– For answers to count, patients must give hospitals a score of 4 or “Always”
VBP FY 2016 – Patient Experience
• Communication with Nurses
• Communication with Doctors
• Responsiveness of Hospital Staff
• Pain Management
• Communication about Medicines
• Cleanliness and Quietness of Hospital
• Discharge Information
• Overall Rating of Hospital
VBP FY 2015 – Core Measures
• AMI-7a• AMI-8a• HF-1• PN-3b• PN-6• SCIP-Inf-1
• SCIP-Inf-2• SCIP-Inf-3• SCIP-Inf-4• SCIP-Inf-9• SCIP-Card-2• SCIP-VTE-2
VBP FY 2016 – Core Measures
• AMI-7a
• PN-6
• SCIP-Inf-2
• SCIP-Inf-3
• SCIP-Inf-9
• SCIP-Card-2
• SCIP-VTE-2
• IMM-2
Note: IMM-2 Performance Period is only 6 MONTHS (Two 3 Month Periods)January 1, 2014 – March 31, 2014 AND October 1, 2014 –
December 31, 2014
VBP FY 2016 – Core Measures
Measure ID Benchmark
AMI-7a 100%
IMM-2 98.875%
PN-6 100%
SCIP-Inf-2 100%
SCIP-Inf-3 100%
SCIP-Inf-9 100%
SCIP-Card-2 100%
SCIP-VTE-2 100%
VBP FY 2016 – Core Measures
• AMI-7a
• PN-6
• SCIP-Inf-2
• SCIP-Inf-3
• SCIP-Inf-9
• SCIP-Card-2
• SCIP-VTE-2
• IMM-2
VBP FY 2017 – Clinical Care: Process
• AMI-7a
• IMM-2
• PC-01
PC-01 = Elective Delivery Prior to 39 Completed Weeks Gestation
VBP FY 2015 – Outcomes
• 30 Day Mortality – AMI
• 30 Day Mortality – HF
• 30 Day Mortality – PN
• AHRQ – PSI-90
• CLABSI
VBP FY 2016 – Outcomes
• 30 Day Mortality – AMI
• 30 Day Mortality – HF
• 30 Day Mortality – PN
• AHRQ – PSI-90
• CLABSI
• CAUTI
• SSI – Colon
• SSI – Abdominal Hysterectomy
VBP FY 2016 – Outcomes
Measure ID Benchmark
CAUTI 0.000
CLABSI 0.000
Surgical Site Infection
Colon 0.000
Abdominal Hysterectomy 0.000
VBP FY 2016 – Outcomes
Outcomes
• 30 Day Mortality – AMI
• 30 Day Mortality – HF
• 30 Day Mortality – PN
• AHRQ – PSI-90
• CLABSI
• CAUTI
• SSI-Colon
• SSI-Abdominal Hyster.
VBP FY 2017 – Clinical Care and Safety
Clinical Care- Outcomes
• 30 Day Mortality – AMI
• 30 Day Mortality – HF
• 30 Day Mortality – PN
• AHRQ – PSI-90
• CLABSI
• CAUTI
• SSI-Colon
• SSI-Abdominal Hyster.
Safety
• MRSA• C. Diff
Reform Timeline
Outcomes – 30 Day Mortality
• Currently in 3 Performance Periods
– FY 2016 ended June 30, 2014
– FY 2019 began July 1, 2014
• 30 Day Mortality Measures
– Assess deaths: AMI, HF, and PN that occur within 30 days after
admission; which, depending on the length of stay, may occur post-
discharge….
CMS 30 Day Risk-Standardized Mortality Rate Calculation
Facility Predicted Deaths
Facility Expected DeathsX
Measure (AMI, HF, PN) National Crude Rate
=
VBP FY 2016 - Efficiency
Medicare Spend Per Beneficiary (MSPB)
• Captures total Medicare Spending Per Beneficiary relative to a hospital stay,
bundling hospital sources (Part A) with post acute care (Part B)
– Bundles the cost of care delivered to a beneficiary for an episode across
the continuum of care:
3 Days Prior
Hospital Inpatient Stay
30 Days post Discharge
VBP: MSPBSample US
VBP: MSPB
36
PROPOSED MSPB Measures
37
• Additional Efficiency Measures proposed to be added
• Risk Adjusted similarly to MSPB
• Proposed to facilitate alignment with the Physician Value Based Payment
Modifier program
• Includes Part A and B and 3 days prior to admission and 30 days post discharge
Medical Surgical
Kidney/Urinary Tract Infection
Hip replacement/revision
Cellulitis Knee replacement/revision
Gastrointestinal hemorrhage
Lumbar spine fusion/refusion
SOURCE: May 1, 2014 Federal Register
System was penalized $376,003 in FY’15 VBP Program• Must acknowledge the amount UNEARNED• Of the programs dollars made available:– System did not capitalize on $6,187,541
Earned Back Unearned Available $$ % Earned
CGH $288,853 $540,406 $829,259 34.83%
$288,853
$0 $829,259 Chesapeake General Performance
VBP FY'13 TOTAL PERFORMANCE
Breakeven Point: $451,333
Earned Back Unearned Available $$ % Earned
System $4,925,357 $6,187,541 $11,112,898 44.32%
$0 $11,112,898Overall Performance
VBP FY'15 TOTAL PERFORMANCE
$4,925,357Breakeven Point: $5,301,360
Earned Back Unearned Measure Value % Earned
Facility $381,643 $218,077 $599,720 63.64%
$381,643
$0 $599,720
Earned Back Unearned Measure Value % Earned
Facility $278,896 $620,704 $899,600 31.00%
$278,896
$0 $899,600
Core Measures
HCAHPS
Breakeven Point: $232,525
Breakeven Point: $348,788
Earned Back Unearned Measure Value % Earned
Facility $539,763 $359,837 $899,600 60.00%
$539,763
$0 $899,600
Earned Back Unearned Measure Value % Earned
Facility $59,974 $539,746 $599,720 10.00%
$59,974
$0 $599,720
Outcomes
Efficiency
Breakeven Point: $348,788
Breakeven Point: $232,535
Facility Bonus / (Penalty) Total Score State Average National Average National ΔFacility A $97,593 42.03 41.81933117 41.70169535 0.325577377
Measure Score
Amount Earned by Measure
Amount Unearned by
Measure
% of Measure Earned
Core Measures
AMI-8a 6 32,712$ 21,808$ 60.00%SCIP-Inf-1 9 49,068$ 5,452$ 90.00%SCIP-Inf-2 7 38,164$ 16,356$ 70.00%SCIP-Inf-3 5 27,260$ 27,260$ 50.00%SCIP-Inf-4 9 49,068$ 5,452$ 90.00%SCIP-Inf-9 5 27,260$ 27,260$ 50.00%HF-1 8 43,616$ 10,904$ 80.00%PN-3b 5 27,260$ 27,260$ 50.00%PN-6 8 43,616$ 10,904$ 80.00%SCIP-Card-2 3 16,356$ 38,164$ 30.00%SCIP-VTE-2 5 27,260$ 27,260$ 50.00%
Core Measures TOTAL 381,643$ 218,077$ 63.64%
HCAHPS
Comm. w/ Nurses 2 17,994$ 71,966$ 20.00%Comm. w/ Doctors 1 8,998$ 80,962$ 10.00%Resp. of Hosp. Staff 2 17,994$ 71,966$ 20.00%Pain Management 2 17,994$ 71,966$ 20.00%Comm. Re: Medicines 1 8,998$ 80,962$ 10.00%Clealiness & Quietness 2 17,994$ 71,966$ 20.00%Discharge Information 3 26,990$ 62,970$ 30.00%Overall Rating 1 8,998$ 80,962$ 10.00%
Consistency Score 17 152,933$ 26,987$ 85.00%
HCAHPS TOTAL 278,896$ 620,704$ 31.00%
Outcomes
AMI 10 179,920$ (0)$ 100.00%HF 3 53,980$ 125,940$ 30.00%PN 8 143,934$ 35,986$ 80.00%AHRQ PSI-90 9 161,928$ 17,992$ 90.00%CLABSI 0 0$ 179,920$ 0.00%
Outcomes TOTAL 539,763$ 359,837$ 60.00%
Efficiency
MSPB 1 59,974$ 539,746$ 10.00%
Efficiency TOTAL 59,974$ 539,746$
Facility TOTAL 1,260,277$ 1,738,363$ 42.03%
Drilldown on Outcomes…
Facility Bonus / (Penalty)Facility A $97,593 42.03 41.81933117 41.70169535 0.325577377
Core Measures
AMI-8a 6 32,712$ 21,808$ 60.00%SCIP-Inf-1 9 49,068$ 5,452$ 90.00%SCIP-Inf-2 7 38,164$ 16,356$ 70.00%SCIP-Inf-3 5 27,260$ 27,260$ 50.00%SCIP-Inf-4 9 49,068$ 5,452$ 90.00%SCIP-Inf-9 5 27,260$ 27,260$ 50.00%HF-1 8 43,616$ 10,904$ 80.00%PN-3b 5 27,260$ 27,260$ 50.00%PN-6 8 43,616$ 10,904$ 80.00%SCIP-Card-2 3 16,356$ 38,164$ 30.00%SCIP-VTE-2 5 27,260$ 27,260$ 50.00%
Core Measures TOTAL 381,643$ 218,077$ 63.64%
HCAHPS
Comm. w/ Nurses 2 17,994$ 71,966$ 20.00%Comm. w/ Doctors 1 8,998$ 80,962$ 10.00%Resp. of Hosp. Staff 2 17,994$ 71,966$ 20.00%Pain Management 2 17,994$ 71,966$ 20.00%Comm. Re: Medicines 1 8,998$ 80,962$ 10.00%Clealiness & Quietness 2 17,994$ 71,966$ 20.00%Discharge Information 3 26,990$ 62,970$ 30.00%Overall Rating 1 8,998$ 80,962$ 10.00%
Consistency Score 17 152,933$ 26,987$ 85.00%
HCAHPS TOTAL 278,896$ 620,704$ 31.00%
Outcomes
AMI 10 179,920$ (0)$ 100.00%HF 3 53,980$ 125,940$ 30.00%PN 8 143,934$ 35,986$ 80.00%AHRQ PSI-90 9 161,928$ 17,992$ 90.00%CLABSI 0 0$ 179,920$ 0.00%
Outcomes TOTAL 539,763$ 359,837$ 60.00%
Efficiency
MSPB 1 59,974$ 539,746$ 10.00%
Efficiency TOTAL 59,974$ 539,746$
Facility TOTAL 1,260,277$ 1,738,363$ 42.03%Variation within the Domain:
Maxed out on AMI Mortality and then got a 0 on CLABSI
Opportunities – VBP: Outcomes
42
FY14 ∆ FY14 ∆ FY14 ∆Performance 87.40% Performance 83.81% Performance 85.21%
Baseline 89.58% -2.18% Baseline 84.76% -0.95% Baseline 88.94% -3.73%Threshold 88.18% -0.78% Threshold 84.77% -0.96% Threshold 88.61% -3.40%
Benchmark 90.21% -2.81% Benchmark 86.73% -2.92% Benchmark 90.42% -5.21%Score 0 Score 0 Score 0
Improvement Dollar Value Score Improvement Dollar Value Score Improvement Dollar Value Score+1% 13,209$ 1 +1% 13,209$ 1 +1% -$ 0
+1.5% 52,836$ 4 +1.5% 39,627$ 3 +1.5% -$ 0+2.5% 105,673$ 8 +2.5% 105,673$ 8 +2.5% -$ 0+3.5% 132,091$ 10 +3.5% 132,091$ 10 +3.5% 13,209$ 1+4.5% 132,091$ 10 +4.5% 132,091$ 10 +4.5% 79,254$ 6+5.5% 132,091$ 10 +5.5% 132,091$ 10 +5.5% 132,091$ 10+6.5% 132,091$ 10 +6.5% 132,091$ 10 +6.5% 132,091$ 10+7.5% 132,091$ 10 +7.5% 132,091$ 10 +7.5% 132,091$ 10+8.5% 132,091$ 10 +8.5% 132,091$ 10 +8.5% 132,091$ 10
1 2 330 Day Mortality Rate - AMI 30 Day Mortality Rate - HF30 Day Mortality Rate - PN
Top 50th = Δ1 Patient
Top 10th = Δ3 Patient
Top 50th = Δ1 Patient Top 50th = Δ8 Patients
Top 10th = Δ11 PatientsTop 10th = Δ3 Patient
VBP – CMS Proposed Future Measures
• FY 2018 Program (Performance Period: CY 2016)
– Patient Experience: Care Transition
• FY 2019 Program (Performance Period: CY 2017)
– Surgical Complication: Total Hip and Total Knee Arthroplasty
FY 19 New Measure
• Added THA/TKA for 30 month performance period.
– January 1, 2015-June 30, 2017
– Baseline of July 1, 2010-June 30, 2013
• Risk standardized measure for complications after Total Hips and Knees
surgeries for up to 90 days post surgery
– One of eight complications: AMI, pneumonia, sepsis, SSI, PE, death,
mechanical complication or periprosthetic joint infection/wound infection.
– Each has a defined time frame
– Each is a ‘Yes’ or ‘No
– Risk adjusted for patient age, sex and comorbidities
44
SOURCE: August 2014 Proposed Rules Federal Register
Readmission Reduction Program
Reform Timeline
Readmission Reduction Program• 9% of Current and Future Medicare Reimbursement at Risk
– 3% penalty of Medicare Reimbursement at risk each program year
– Measured Populations 30 days from DISCHARGE
• AMI, HF, PN, COPD, THA & TKA
• August 2014: CABG Added to FY 2017
• Performance Periods: 3 Year Rolling Program
– FY’15: July 1, 2010 – June 30, 2013 – 3%
– FY’16: July 1, 2011 – June 30, 2014 – 3%
– FY’17: July 1, 2012 – June 30, 2015 – 3%
– FY’18: July 1, 2013 – June 30, 2016 – 3%
– FY’19: July 1, 2014 – June 30, 2017 – 3%
Currently participating in 3 performance periods simultaneously
How are Readmissions Measured?• Scoring Index based at 1.0• Calculate Excess Readmission Ratio
• Excess Readmission Ratio > 1 = BAD• Excess Readmission Ratio < 1 = GOOD
Facility Predicted Value
Facility Expected Value
Wisconsin RRP By Facility: FY 13- FY 15
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
1.60%
1.80%RRP %
FY 13 FY 14 FY 15
Hospital Acquired Conditions
Reform Timeline
Hospital Acquired Conditions (1% at Risk*)
• 12 Hospital Acquired Conditions Identified
– Divided in to 2 Domains
• If a hospital is in the BOTTOM QUARTILE (worst performing 25% in the country), it will be penalized a FULL 1% of Medicare Reimbursement
• Penalties will begin FY’15 (beginning October 1, 2014)
*1% After DSH, Uncompensated Care, and IME
SAMPL IPPS Reimbursement LetterPPS EFFECTIVE 10/1/2014 DRG Weight 1.00
Facility CMI 1.54OPERATING INFORMATION
Federal National Standardized Labor Rate 3,329.57Wage Index 0.8994Labor Rate x Wage Index 2,994.62Federal National Standardized Non-Labor Rate 2,040.71PPS Blended Rate 5,035.33FY 2015 Hospital Readmissions Reduction (HRR) Adjustment Factor 0.9994 5,032.30 ($3.02) RRP ReductionFY 2015 Value-Based Purchasing (VBP) Adjustment Factor 0.994348 5,003.86 ($28.44) VBP Reduction
($31.46) Per DRG Reduction
($31.46) x 1.54
($48.45)VBP & RRP Per DRG Red. CMI Adj
Disproportionate Share Adjustment (Operating) (Empirically Justified Amount 25%) 0.0691 0.02 5,090.43Disproportionate Share Adjustment (Operating) (Uncompensated Care Amount) 507.71 5,598.14Fully Loaded Operating Rate adjusted for CMI 8,346.97
FY 2015 Hospital Acquired Condition (HAC) Adjustment Factor 0.99 8,263.50($83.47)
HAC Per DRG CMI Adjusted
($131.92)Total Per DRG Reduction
Penalties & Your DRG Payment
Hospital Acquired Conditions: FY’15
First Domain: PSIsPerformance Period: 7/1/11-6/30/13
Second Domain: CDCPerformance Period: CY 2012 & 2013
Pressure Ulcer Rate CLABSI
Foreign Object Left in Body CAUTI
Iatrogenic Pneumothorax Rate
Postoperative Physiologic and Metabolic Derangement Rate
Postoperative Pulmonary Embolism and Deep Vein Thrombosis Rate
Accidental Puncture and Laceration Rate
HAC Domain Weightings: FY’15
CLABSI: 32.5%
CAUTI: 32.5%
Pressure Ulcer Rate: 8.33%
Foreign Object LeftIn Body: 8.33%
DOMAIN 1: 35% DOMAIN 2: 65%
Hospital Acquired Conditions: FY 2016
First Domain: PSIs25%
Second Domain: CDC75%
Pressure Ulcer Rate CLABSI
Foreign Object Left in Body CAUTI
Iatrogenic Pneumothorax Rate SSI Following Colon Surgery (FY 2016)
Postoperative Physiologic and Metabolic Derangement Rate
SSI Following Abdominal Hysterectomy (FY 2016)
Postoperative Pulmonary Embolism and Deep Vein Thrombosis Rate
Accidental Puncture and Laceration Rate
HAC Domain Weightings: FY’16
57
CLABSI: 32.5%
CAUTI: 32.5%
Pressure Ulcer Rate: 5.83%
SSI: 32.5%
DOMAIN 1: 25% DOMAIN 2: 75%
Hospital Acquired Conditions: FY 2017
First Domain: PSIs Second Domain: CDC
Pressure Ulcer Rate CLABSI
Foreign Object Left in Body CAUTI
Iatrogenic Pneumothorax Rate SSI Following Colon Surgery (FY 2016)
Postoperative Physiologic and Metabolic Derangement Rate
SSI Following Abdominal Hysterectomy (FY 2016)
Postoperative Pulmonary Embolism and Deep Vein Thrombosis Rate
Methicillin-Resistant Staphylococcus Aureus (MRSA) Bacteremia (FY 2017)
Accidental Puncture and Laceration Rate
Clostridium Difficile (FY 2017)
Dollars At Risk
Domain Weight At Risk On the Table
Medicare Spend Per Beneficiary 25% 745,471$ 1,562,507$
Outcomes 40% 1,192,753$ 2,500,011$ Patient Experience 25% 745,471$ 1,562,507$ Core Measures 10% 298,188$ 625,003$
TOTAL 100% 2,981,883$ 6,250,028$
VBP FY 2016
VBP FY 2016 – Sample Current $$ at Risk
Domain Weight At Risk On the Table
FY 2016
Medicare Spend Per Beneficiary 25% 745,471$ 1,562,507$ Outcomes 40% 1,192,753$ 2,500,011$ Patient Experience 25% 745,471$ 1,562,507$ Core Measures 10% 298,188$ 625,003$
FY 2017
Outcomes - 30 Day Mortality 25% 851,967$ 1,785,722$ Outcomes - AHRQ 3.75% 127,795$ 267,858$
FY 2018**
Outcomes - 30 Day Mortality 25% 851,967$ 1,785,722$
Outcomes - AHRQ 3.75% 127,795$ 267,858$
FY 2019**
Outcomes - 30 Day Mortality 25% 851,967$ 1,785,722$
TOTAL 5,793,374$ 12,142,911$
VBP Current Dollars At Risk (Active Performance Periods)
VBP – Sample Total Current $$ at Risk
All Reform – Sample Total Current $$ at Risk
Domain On the Table
FY 2016
Value Based Purchasing 6,250,028$ Readmissions COMPLETEHospital Acquired Conditions 1,703,933$ FY 2017
Value Based Purchasing 2,053,581$
Readmissions 5,111,800$ Hospital Acquired Conditions 1,703,933$
FY 2018**
Value Based Purchasing 2,053,581$
Readmissions 5,111,800$
FY 2019**
Value Based Purchasing** 1,785,722$
Readmissions 5,111,800$
TOTAL 30,886,178$
All Active Mandatory Reform
VBP – CMS Proposed Future Measures
• FY 2018 Program (Performance Period: CY 2016)
– Patient Experience: Care Transition
• FY 2019 Program (Performance Period: CY 2017)
– Surgical Complication: Total Hip and Total Knee Arthroplasty
FY 19 New Measure
• Added THA/TKA for 30 month performance period.
– January 1, 2015-June 30, 2017
– Baseline of July 1, 2010-June 30, 2013
• Risk standardized measure for complications after Total Hips and Knees surgeries for up to 90 days post surgery
– One of eight complications: AMI, pneumonia, sepsis, SSI, PE, death, mechanical complication or periprosthetic joint infection/wound infection.
– Each has a defined time frame
– Each is a ‘Yes’ or ‘No
– Risk adjusted for patient age, sex and comorbidities64
SOURCE: August 2014 Proposed Rules Federal Register
Bundled Payments
Description of Models 1 - 4
66
Models 2 and 3 are the most popular by far-
retrospective vs prospective models that include the post
acute care components
Acute
LTACH/SNF/
IRF
HHHome
Readmission
67
Bundled Payments
Model 1 and 4Model 1 is Retrospective and is all DRGsModel 4 is Prospective
Acute
LTACH/SNF/
IRF
HHHome
Readmission
68
Bundled Payments
Model 2Model 2 is RetrospectiveFor 30-60-90 days
Acute
LTACH/SNF/
IRF
HHHome
Readmission
69
Bundled Payments
Model 3Model 3 is RetrospectiveFor 30-60-90 days
70
The Episodes• CMS created 48 Episodes, each with up to 15 individual MS-DRG codes
• We categorized Episodes into 9 Service Lines; illustrative purposes only
• Model 2, 3, or 4 applicants may select 1-48 Episodes for testing
Spine (5) Cardiac Services (12)
Vascular Services (3)
Orthopedics (10)
Neurology (2)
Oncology / Hematology
(1)
Pulmonology (3)
General Surgery (2)
General Medicine / Internal
Medicine (10)http://innovation.cms.gov/initiatives/bundled-payments/
Advantages of Participation
• Improved quality of care for patients
– Reduced complications, readmissions, and cost
• Improved ability to work with hospitals, physicians, nursing homes, home health, rehab centers, and other providers to improve overall care quality and service
• Potential competitive advantage within market with physicians and post-acute care
• Opportunity to receive payment aligned with these goals and based on outcomes
71
http://innovation.cms.gov/initiatives/bundled-payments/
72
MEDICARE: Cohort 1 COMMERCIAL as of July 2014
Where are the Bundled Payments?
Early Results of BPCI Cohort 2• Tremendous increase in the
number of applications in the most recent open enrollment in April 2014: Nearly Triple!
• Models 2,3,4 were open for enrollment
• Currently in the Phase 1 period which is the non risk, decision making period. Phase 2 is when the Episode Initiator starts to accept risk
Changes In the Cohort 2 Timeline: 7/31/14
Event Original Date Revised Date*
Historical Claims & Target Pricing
Late Summer 2014
November 2014
Go/No Go Decision to Participate
November 1, 2014 January 11, 2015
Go Live with Risk January 1, 2015 April 1, 2015
Other significant changes: ADDITION OF EPISODES: You can now add episodes in
July 2015 and October 2015: only 1 episode is required for April 1, 2015. Phase 1 ends in October 2015
B-CARE: B-CARE quality data wont be collected until Spring 2015
Option for Delayed Reconciliation: Will offer a 4 quarter timeline for reconciliation.
* Revised again in October 2014
75
Readiness: Risk Capability
• What are your data analytics and capabilities and
ability to operationalize your quality data
• What is the maturity of your physician network and
post acute care network? What do you know about
each? What don’t you know?
• How are you doing on the VBP and RRP that are
building blocks for this? How are you going to
manage the gain sharing
• What quality metrics are you tracking and need to
improve that can be built into this program
• What internal cost sharing could you roll out with
this?
Strategic Planning: How does it all tie in?
System/Facility Strategic Plan
Clinically Integrated Networks/Post Acute Care Networks
Payment Models
MSSP/BPCI/VBP/RRP/HAC Managed Care/Direct to Employer Opportunities
76
MD• Home Health• SNF• IRF• Outpt. Rehab
Readmission
Home
$3,207 $10,129
$8,965 $616+ + + = $22,927
x 98%
$22,468
DRG Inpatient and PACS Fee for Service Model
$22,468Bundled Episodic Model
DRG 470 Total Joint Replacement w/out CCModel 2
Note: any CMI aggregate charges lower than $22,468 can be shared with providers via gain sharing model
Episodic period for model 2: 3 days prior to admission to 90 days post discharge from hospital
Gain Sharing Model
Physician
Surgeon
Anesthesiologist
Hospitalist
Outpatient Physician
Setting
Hospital
SNF
Home Health
78
Shared Reward($$)
Bundled Payment Episode Pricing and Gain Sharing
79
Target Price$13,647
Historical Cost Per Episode
$12,500
Actual FFS Cost during
Performance Period
$13,400
Settlement(Per Case)
$247
BPLNEpisode
Definitions Risk
Adjustment
Environment of Care - Hospital
(40%)$99
Physicians (35%)$86
Update factor
For illustration:3% inflation/yrDiscount = 3%
2008-2009 2013
Environment of Care - Post-acute
(25%)$62
Quality Metrics
Quality Metrics
Quality Metrics
BPCI Multiple Bonus Payments: Physicians
• 2 opportunities for Physicians to be awarded Bonuses
1. Internal Cost Savings Pool
2. Bundled Payment Savings Pool
• Both have required Quality Metrics and Cost Savings to be met
• Cost Savings MUST be directly attributed to Quality Improvement and Care
Redesign
80
Outpatient Bundling…coming soon?In February 2014, CMMI issued a Request for Information on a new bundled
payment program to expand to outpatient.
Focus is Specialty Physicians and on
(1) Procedures and (2) complex chronic care
• Highlighted colonoscopy, cataract surgery, & radiation therapy for
procedural options.
• Regarding the chronic care, “CMS is considering development of a model
that would incentivize specialists to more efficiently manage the care
provided to beneficiaries with complex or chronic medical conditions over
the period of time that corresponds to the specialty practitioner’s long term
involvement with managing the beneficiary’s care.”
• Was seeking responses until March 13
Outpatient Bundling
• Referred to by CMS as: “Comprehensive Ambulatory Payment Classification
(APC)”
• Finalized in the CY 2014 OPPS/ASC Final Rule
• Affect payments to 4,000 hospitals and 5,300 ASC’s
• Delayed implementation to January 1, 2015 instead of the traditional outpatient
October 1 implementation date
– Extra time allowed the Agency, hospitals, and physicians more time to evaluate
and comment on the policy
Outpatient Bundling – Comprehensive APC’s
• Single Medicare payment rather than individual APC payments throughout the episode
• 25 Bundled Outpatient Procedures• Proposed Payment could include all hospital
services reported on the claim covered under Medicare Part B for up to a proposed 6 Month Period– Few exceptions resulting in a single
beneficiary copayment per claim
Outpatient Bundling – Proposed Procedures
No.Clinical Family
Proposed CY 2015 APC
APC Title
Proposed CY 2015 APC Geometric Mean Cost
1 AICDP 0090 Level II Pacemaker and Similar Procedures $ 6,961.45 2 AICDP 0089 Level III Pacemaker and Similar Procedures $ 9,923.94 3 AICDP 0655 Level IV Pacemaker and Similar Procedures $ 17,313.08 4 AICDP 0107 Level I ICD and Similar Procedures $ 24,167.80 5 AICDP 0108 Level II ICD and Similar Procedures $ 32,085.90 6 BREAS 0648 Level IV Breast and Skin Surgery $ 7,674.20 7 CATHX 0427 Level II Tube or Catheter Changes or Repositioning $ 1,522.15 8 CATHX 0652 Insertion of Intraperitoneal and Pleural Catheters $ 2,764.85 9 ENTXX 0259 Level VII ENT Procedures $ 31,273.34
10 EPHYS 0084 Level I Eletrophysiologic Procedures $ 922.84 11 EPHYS 0085 Level II Eletrophysiologic Procedures $ 4,807.69 12 EPHYS 0086 Level III Eletrophysiologic Procedures $ 14,835.04 13 EYEXX 0293 Level IV Intraocular Procedures $ 9,049.66 14 EYEXX 0351 Level V Intraocular Procedures $ 21,056.40 15 GIXXX 0384 GI Procedures with Stents $ 3,307.90 16 NSTIM 0061 Level II Neurostimulator & Related Procedures $ 5,582.10 17 NSTIM 0039 Level III Neurostimulator & Related Procedures $ 17,697.46 18 NSTIM 0318 Level IV Neurostimulator & Related Procedures $ 27,283.10 19 ORTHO 0425 Level V Musculoskeletal Procedures Except Hand and Foot $ 10,846.49 20 PUMPS 0227 Implantation of Drug Infusion Device $ 16,419.95 21 RADTX 0067 Single Session Cranial Stereotactic Radiosurgery $ 10,227.12 22 UROGN 0202 Level V Female Reproductive Procedures $ 4,571.06 23 UROGN 0385 Level I Urogenital Procedures $ 8,019.38 24 UROGN 0386 Level II Urogenital Procedures $ 14,549.04 25 VASCX 0083 Level I Endovascular Procedures $ 4,537.95 26 VASCX 0229 Level II Endovascular Procedures $ 9,997.53 27 VASCX 0319 Level III Endovascular Procedures $ 15,452.77 28 VASCX 0622 Level II Vascular Access Procedures $ 2,635.35
Thank you!
Contact Information:
Melinda Hancock
(804) 474-1249
86
Affinity Groups
• Current
– Large System CFO Council
– Large System Revenue Cycle Council
– Strategic CFO Council
• Being Formed
– CMMI Bundled for Care Improvement Council
– Payer Focused Affinity Group
• Newly Formed and Actively Meeting
– Health Care Economics Professional Council
– Physician Group Practice Executive Council
– Strategy Executive Council
– Academic Medical Center CFO Council
87
Master Level Seminars
• Chicago, IL | Dec. 8-10, 2014
– Beyond Big Data: Developing a Business Intelligence and Analytics Practice
– Population Health Management and the Next Generation of Clinical Integration
• Washington, DC | Feb. 18-20, 2015
– Population Health Management and the Next Generation of Clinical Integration
– Transparency, Metrics, and Communication: Proven Practices for Revenue Cycle Strategies
• Seattle, WA | March 25-27, 2015
– Beyond Big Data: Developing a Business Intelligence and Analytics Practice
– Transparency, Metrics, and Communication: Proven Practices for Revenue Cycle Strategies
Improve the Billing and Payment Experience for Patients
88
hfma.org/dollars
89
Price Transparency Task Force
90
Enhance Price Transparency
• Clarifies basic definitions that are often misused
• Sets forth guiding principles
• Establishes roles for payers, providers, others
• Reflects consensus of key stakeholders
hfma.org/dollars
91
Demystify Price Information for Consumers
• Describes how to request price
estimates, step by step
• Clarifies what estimates may or
may not include
• Explains in-network and
out-of-network care
• Defines key terms
• Available for posting on your
website at no charge
• Hardcopies available for purchase
in bulk at a nominal price through
AHA’s online storehfma.org/transparencyahaonlinestore.org
Best Practices Address Key Issues
92
Provision of Care
Registration and Insurance
Verification
Financial Counseling
Patient Share
Prior Balances (if applicable)
Balance Resolution
93
Achieve Recognition as an Adopter of Best Practices
• Recognition demonstrates commitment to best practices in patient financial communications
• Based on HFMA review of an application and supporting documentation
• All provider organizations may apply
• Recognition valid for two years
• Adopters may use the phrase “Supporter of the Patient Financial Communications Best Practices” in their marketing materials
94
Leading the Change from Volume to Value
• Defining and delivering value
• Key organizational capabilities for building value
• Organizational road maps
hfma.org/valueproject
New Report Extends Value Resources to Reflect Industry Realignment
Acquisition and Affiliation Strategies
Acquisition andAffiliation Strategies
Current State & Future Directions of Value
Value InHealth Care
HMFA’s Value Project
Four Key Capabilities for Value
Building Value-DrivingCapabilities
HMFA’s Value Project
Defining &Delivering Value
Defining andDelivering Value
HMFA’s Value Project
Organizational Road Maps for Value-Driven Health Care
The Value Journey:Organizational Road Maps forValue DrivenHealth Care
HMFA’s Value Project
hfma.org/valueproject
96
Career StrategiesHFMA Resources
“Choose a job you love, and you will never have to work a day in your life.” Confucius
Take Advantage of HFMA Resources
97
98
Leadership…Your personal plan…what does it
really mean?
“Leadership has nothing to do with titles; it has everything to do with,
“Do you inspire other people? Do they want to follow you?
Do they want to be with you?”-Tom Atchison, author of
Followership: A Practical Guide to Aligning Leaders and Followers
99
Be an Exceptional Leader
• Well cultivated self awareness
• Compelling vision• A real way with people
• Masterful execution
100
Be “Great by Choice”
• 10ers are extremely disciplined– They use empirical data and
continually plan for the “what if”
• The take the 20 Mile March– Performance markers and self
imposed constraints
• Fire bullets instead of cannonballs. – Only shoot cannon balls after
testing.
• Show great financial constraint
• Zoom out – then zoom in.
“You cannot lead without knowing the needs of your people—what drives them, what makes them do what they do; then you can give them opportunities to succeed based on their own psychology of success.”
Kerry Gillespie, FHFMA, vice president, operations, Community Health System, Inc., Brentwood, TN, and
a member of HFMA’s Tennessee Chapter
101101
Develop Your Leaders…
102
Everyone Is a Leader….
Everyone in this room is a leader. I’m asking each of you to renew your commitment to leading our industry forward, to ensuring its long term viability and quality.Together, we CAN improve health care. Together, we can and we must• Mentor young professionals as we have been mentored,• Rise above the uncertainty and frustration of today, and• Work in partnership with our colleagues throughout the
industry to lead the change.Kari Cornicelli
HFMA National Chair 2014/2015
103
New Skills for A Leader
• Convening collaborative efforts
• Making decisions on behalf of your organization
• Commitment to move the alliance forward
• Confidence that the alliance will "get to its destination"
Trend Toward Collaboration Across Traditional Boundaries
1. A common pain (a shared problem)
2. A convener of stature (an influential leader)
3. Representatives of substance with authority to make
decisions
4. Leaders committed to move the alliance forward
5. A clearly defined purpose
6. Established rules
7. Confidence that the alliance will
"get to its destination"
8. A shared pool of reliable information
104
8 Key Elements Required for Successful Collaboration
Source: 2013. Mike Leavitt and Rich McKeown. Finding Allies, Building Alliances: 8 Elements That Bring…and Keep People Together
105
Leading Change- Summary