the latest on pdpm and value-based transformation · source: dhhs, cms medicare program; pps and...
TRANSCRIPT
© HDG 2019
The Latest on PDPM and Value-Based TransformationLeadingAge New Jersey and New Jersey Hospital AssociationNavigating Your Path to Success Under the SNF PDPMJune 27, 2019
© HDG 2019
Presentation Topics
Value-Based Context
PDPM Arrives October 1
Preparing for Change
1
© HDG 2019
Value-Based Context
2© HDG 2019
© HDG 2019
ValueVolume
3
© HDG 2019
PDPM—Part of Larger Policy Context of Refining Payment Systems to Drive Value
SNF Value-Based Purchasing Program
• Implemented October 1, 2018
Bundled Payments for Care Improvement Advanced
• Started October 1, 2018, with another round in process
Pathways to success reform of Medicare Shared Savings Program puts ACOs on quicker path to downside risk• Starting July 1, 2019
Home health Patient-Driven Groupings Model (PDGM)
• Starting January 1, 2020
4
Source: DHHS, CMS Medicare Program; PPS and Consolidated Billing for SNFs Final Rule for FY 2019, SNF VBP Program, and SNF Quality Reporting Program, 42 CFR Parts 411, 413, and 424 (August 8, 2018). Retrieved April 2017 from https://www.gpo.gov/fdsys/pkg/FR-2018-08-08/pdf/2018-16570.pdf
© HDG 2019
Medicare Part A Landscape Will Be Affected by Recent Policy Changes
Bundled Payments for Care Improvement Advanced (BPCI-A)
• Started October 1, 2018, for 1,100 hospitals and physician groups
• Six-month no-risk trial period ended March 2019, after which full risk is expected; round 2 RFP starts January 1, 2020
Pathways to Success Reforms Medicare Shared Savings Program (MSSP)
• Starts July 1, 2019
• 34 of 37 MSSP ACOs in NJ are currently in upside-only risk and will eventually be required to move to risk or terminate participation
• Opportunities for SNFs include 3-day waiver
5
Participants in both programs need effective partners
© HDG 2019
Current BPCI Advanced Participants inNew Jersey & Delaware: 340 Clinical Episodes
Organization DBA Name Role Type City State
AHS Hospital Corporation Convener ACH Morristown NJAHS Hospital Corporation Convener ACH Morristown NJAHS Hospital Corporation Convener ACH Morristown NJAHS Hospital Corporation Convener ACH Morristown NJAtlantic Neurosurgical Specialists, Pa Participant PGP Morristown NJBeebe Healthcare Participant ACH Lewes DEHoly Name Medical Center, Inc. Participant ACH Teaneck NJHunterdon Medical Center Participant ACH Flemington NJMed-Metrix, LLC Convener Other Parsippany NJCapital Health System, Inc. Sole MB Convener Other Trenton NJShore Orthopedic University Associates, P.A. Participant PGP Somers Point NJSt. Luke’s Warren Hospital, Inc. Participant ACH Phillipsburg NJCooper University Health Care Participant ACH Camden NJRothman Institute Participant PGP Marlton NJThe Valley Hospital Participant ACH Ridgewood NJVirtua Memorial Hospital of Burlington County, Inc. Participant ACH Mount Holly NJVirtua West Jersey Health System Participant ACH Voorhees NJ
6
© HDG 2019
Round 2 of BPCI Advanced Announced:Applications Due for January 1, 2020, Start
7
© HDG 2019
Medicare Advantage Growing in New Jersey
8
Source: Centers for Medicare & Medicaid Services April 2014-2019 Enrollment
Geography Eligibles Enrolled PenetrationNew Jersey 1,717,463 476,916 27.77%United States 63,757,314 22,179,749 34.79%
Geography 2014 2015 2016 2017 2018 2019New Jersey 15.39% 15.34% 16.42% 21.47% 22.35% 27.77%United States 29.77% 31.49% 31.92% 33.58% 34.13% 34.79%
Source: Centers for Medicare & Medicaid Services April 2019 Enrollment
10.00%
16.00%
22.00%
28.00%
34.00%
40.00%
2014 2015 2016 2017 2018 2019New Jersey United States
© HDG 2019
9
Network Development and Risk Sharingon the Rise
Given importance of post-acute care to success of Advanced Alternative Payment Models (APMs), there will be continued growth in:
• Preferred networks
• Risk-based contracting
In NJ, there is significant participation in ACOs and BPCI, so pressures on LOS, 30-day readmissions, and quality metrics will continue
© HDG 2019
Value-Based Context for PDPM:Bottom Line…
• At the same time that PDPM is being implemented, the New Jersey marketplace will continue to undergo a shift to value-based care– Reach out to referring health systems now and ascertain their
future plans about ACOs and BPCI Advanced
– Adjust your value proposition accordingly
• PDPM and value-based transformation will place even greater emphasis on timely and complete transmission of information between hospitals and SNFs
10
© HDG 2019
Into the Mix Comes…
Patient-Driven Payment Model
11© HDG 2019
© HDG 2019
Patient-Driven Payment Model (PDPM) Starts October 1, 2019—Ready or Not!
• New payment system starts October 1, 2019– CMS provided 14-month lead
time
– Only minor tweaks contained in FY 2020 proposed rule
• Result of years of research; represents major policy change
• Addresses long-standing concerns about RUGs system expressed by MedPAC & OIG
12
© HDG 2019
Current State of Play
• FY 2020 proposed rule made minor tweaks to PDPM: – Group therapy definition to change from “exactly 4” to permit
“from 2 to 6” – trade associations supportive
– Changed technical regulatory language to conform to last year’s final rule
– Comment period over; final rule expected late July 2019
• Advance copy of updated MDS RAI manual released in May
• Billing guidance expected soon
• Software testing by major EMR firms underway
13
© HDG 2019
Under PDPM, Markets Will Evolve and Nature of Competition Will Change
14
Ortho Patient
Complex Patient
Current
Delay
Hospital SNF Home
Hospital SNF Home
Ortho Patient
Complex Patient
Future
Hospital SNF Home
© HDG 2019
PDPM Changes Payments by Clinical CategoryNational averages, wage index = 1.0, FFY 2020 (proposed)
15
Refined Groups Total Patient Days PDPM Stays ALOS
Est. FFY 2020 National Average
RUGs Rate
Est. FFY 2020 National Average
PDPM Rate
Percent Change
Acute Infections 8,849,039 328,040 27 $562 $584 4%
Acute Neurologic 3,974,988 126,622 31 $584 $554 -5%
Cancer 417,703 20,642 20 $538 $531 -1%
Cardiovascular and Coagulations 5,738,656 232,510 25 $555 $568 2%
Elective Joint Replacement 1,400,492 93,580 15 $571 $557 -2%
Major Joint Replacement/Spinal Surgery 2,593,314 100,598 26 $579 $553 -4%
Medical Management 12,123,209 445,971 27 $557 $549 -1%
No prior acute or LTCH stay 3,598,107 118,268 30 $550 $509 -7%
Non-Orthopedic Surgery 6,213,171 243,661 25 $553 $592 7%
Other Orthopedic - Non Surgery 3,814,555 124,480 31 $573 $520 -9%
Other Orthopedic - Surgery 6,360,879 188,795 34 $569 $549 -4%
Pulmonary 5,499,210 215,722 25 $562 $606 8%
Total 60,583,323 2,238,889 27 $562 $562 0%
© HDG 2019 16
PDPM Helps Address Hospital Pain Points
Source: Dobson DaVanzo analysis of CMS Medicare claims data (Federal Fiscal Year 2017) includes Medicare Fee-for-Service and Cost Plan
Excess days over CMS’ geometric mean length of stay = opportunity for variable cost savings within the hospital
Due to Longer than Average Inpatient ALOS Example from State of New Jersey
PDPM Clinical CategoriesNo. Acute Hosp. Discharges to
SNF
Total Inpatient Days
Days over MS-DRG Mean LOS
Est. Potential Savings to
HospitalNon-Orthopedic Surgery 23,844 268,553 106,442 $47,898,900 Medical Management 36,587 228,542 88,775 $39,948,750 Acute Infections 28,152 214,084 83,084 $37,387,800 Cardiovascular and Coagulations 23,576 162,711 66,987 $30,144,150 Pulmonary 17,503 119,582 45,943 $20,674,350 Acute Neurologic 9,858 60,725 21,682 $9,756,900 Other Orthopedic - Surgery 12,903 83,212 20,683 $9,307,350 Cancer 5,946 47,894 20,324 $9,145,800 Major Joint Replacement/Spinal Surgery 6,211 35,758 13,183 $5,932,350 Other Orthopedic - Non Surgery 11070 51,974 12,139 $5,462,550 Elective Joint Replacement 6,700 20,141 1681 $756,450 Total 182,350 1,293,176 480,923 $216,415,350
© HDG 2019
PDPM Requires Understanding of How Costs Vary by Clinical Category
17
Legend: Red means cost per day for clinical category significantly higher than PDPM component average Green means cost per day for clinical category significantly lower than PDPM component average
Source: Adapted from Acumen, PDPM Technical Report, April 2018
Clinical Category Payment Group # of Stays % of Stays PT/day OT/day SLP/day NTA/day
Acute Neurologic Acute Neurologic 121,220 6% $68 $58 $35 $58Major Joint Replacement or Spinal Surgery
Major JR or Spinal Surgery 163,444 9% $88 $65 $8 $63
Acute Infections Medical Management 124,274 7% $65 $56 $17 $87
Cancer Medical Management 87,061 5% $64 $55 $20 $63Cardiovascular and Coagulations Medical Management 187,395 10% $68 $58 $16 $79
Medical Management Medical Management 579,044 31% $64 $55 $20 $72
Pulmonary Medical Management 154,989 8% $65 $56 $21 $93
Non-Orthopedic Surgery Non-Orthopedic Surgery 205,931 11% $68 $58 $15 $89
Non-Surgical Orthopedic/ Musculoskeletal Other Orthopedic 110,066 6% $73 $61 $14 $56
Orthopedic Surgery (Except Major JR or Spinal Surgery) Other Orthopedic 165,662 9% $74 $62 $13 $68
Total/Average 1,899,086 100% $69 $58 $18 $74
© HDG 2019
CMS PDPM Revenue Impacts Are Projections: Plan on Further Change!
• CMS projections are estimates, using proxies for some elements that were not available in 2017
• Rates are set to be budget neutral, based on what otherwise would have been spent under RUGs
• Future downward payment adjustments are possible if CMS determines “coding creep” has occurred
• Payment weights will be adjusted as relative cost of care changes (reflecting less therapy, more nursing)
18
Bottom line: A positive or break-even projected impact could easily evaporate
© HDG 2019
New Jersey PDPM Projected Revenue Gain (Absent Behavior Change)
Source: Centers for Medicare & Medicaid Services
• Majority of winners will see less than $100,000 in gains
• Six winners gaining over $500,000
19
© HDG 2019
New Jersey PDPM Projected Revenue Loss (Absent Behavior Change)
• Majority of revenue losses will be less than $200,000/provider
• 30 providers losing more than $500,000
Source: Centers for Medicare & Medicaid Services
20
© HDG 2019
PDPM Will Eventually Impact Medicare Advantage
Medicare Advantage plans payment options include:
• Copying or streamlining PDPM
• Moving to levels(1, 2, 3, 4)
• Eventually moving to episodic payment
21
© HDG 2019
Preparing for Change
Opportunities and Challenges
22© HDG 2019
© HDG 2019
PDPM Presents New Opportunities for Providers, but Comes with Challenges
• Complete and accurate coding of MDS at necessary time points
• Understanding how revenues and costs can/will shift as PDPM unfolds
• Mastering operational complexities; addressing staffing needs
• Greater ability to manage costs—particularly therapy
• Opportunity to expand into new service lines to drive occupancy
• Potential for alignment with value-based payors
23
Opportunities Challenges
© HDG 2019
Coding Becomes Even More Critical for PDPM
• Complete and accurate MDS & ICD-10 coding
• Mastering MDS section GG nuances in measuring functional impairment
• Non-therapy ancillaries – Multiple sections of MDS are
implicated
• Speech language pathology– Comorbidities and cognitive
function
24
© HDG 2019
A Fresh Look at Therapy
• Clinical pathway development
• Redefining roles for nursing and therapy
• Group and concurrent therapy
• Driving value(outcome ÷ cost to get there)
25
© HDG 2019
Enhancing Clinical Capabilities
• Address hospital “pain points”—previously hard-to-place patients
• Understand market niche of competitors
• Diversify service lines
• Manage additional costs of medically complex patients
26
© HDG 2019
PDPM Will Affect Wide Swath of Operations
• Admissions process• Clinical services• Medicare documentation• MDS & quality improvement
process
• ADLs & section GG• Therapy• Medicare meeting• Billing• Marketing
27
© HDG 2019 28
For More Information
Brian Ellsworth, MAVice President, Public Policy & Payment [email protected] 860.874.6169
[email protected]@HDGConsulting
© HDG 2019 29
Disclosure
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought.
HDG refers to Health Dimensions Group, an independently owned, for-profit entity.
© 2019 Health Dimensions Group