vbp, mips, apms, and acos: where do physiatrists fit? creating a successful practice under...

VBP, MIPS, APMs, and ACOs:Where Do Physiatrists Fit?

Creating a Successful Practice Under Value-Based Payment Systems

Harold D. MillerPresident and CEO

Center for Healthcare Quality and Payment Reform

www.CHQPR.org

I Have Nothing to Disclose

3© 2009-2015 Center for Healthcare Quality and Payment Reform www.CHQPR.org

A Short Quiz


A Short Quiz

QUESTION #1:Which U.S. industry

has not given its key employees a raise in a decade,

and has told employees every year that their pay

may be cut by 25%regardless of how well

they’ve performed?


A Short Quiz

QUESTION #1:Which U.S. industry

has not given its key employees a raise in a decade,

and has told employees every year that their pay

may be cut by 25%regardless of how well

they’ve performed?

ANSWER:Health Care


Medicare SGR Is Now Gone, But Physician Pay Has Been Flat

PhysicianPractice Costs

PhysicianPaymentIncreases

If SGR CutHad Been

Made

23% EffectiveReduction


A Short Quiz

QUESTION #2:In which U.S. industry

can one set of employeesonly get a raise if other

employees take a pay cut,even when the business is

performing well?


A Short Quiz

QUESTION #2:In which U.S. industry

can one set of employeesonly get a raise if other

employees take a pay cut,even when the business is

performing well?

ANSWER:Health Care


Even Without the SGR, PhysicianPay Must Be “Budget-Neutral”

PCP Payments

SpecialtyPayments

PCPPayments

SpecialtyPayments

Physician Payment Budget Neutrality


A Short Quiz

QUESTION #3:In which U.S. industries does government policyfavor large businessesover small businesses?


A Short Quiz

QUESTION #3:In which U.S. industries does government policyfavor large businessesover small businesses?

ANSWER:Health Care


Unlike Physicians, Hospitals Have Received Pay Increases

Physicians

Hospitals

Inflation


A Short Quiz

QUESTION #4:In which U.S. industries

are businessesonly able to sell

their products and servicesthrough an intermediary who demands large discounts andincreases prices by 18-25%?


A Short Quiz

QUESTION #4:In which U.S. industries

are businessesonly able to sell

their products and servicesthrough an intermediary who demands large discounts andincreases prices by 18-25%?

ANSWER:Health Care


We Spend As Much on Health Insurance Admin/Profit as on Drugs

Admin: $110 billion

Drugs: $117 billion


A Lot of a Physician’s Pay Goes To Costs of Dealing with Health Plans

Admin: $110 billion

Drugs: $117 billion

Admin: $30 billion


A Short Quiz

QUESTION #5:Who is to blame forthe way physicians

are paid andmicromanaged?


A Short Quiz

QUESTION #5:Who is to blame forthe way physicians

are paid andmicromanaged?

ANSWER:Physicians


The Blame Rests With Physicians

• Physicians haven’t defined solutions to control healthcare costs without rationing

• Physicians have allowed themselves to be seen as the causes of higher spending

• Physicians haven’t defined payment models that will support lower-cost, higher-quality care and maintain financial viability for physician practices

• Physicians aren’t organized to manage and deliver high-value population health care to purchasers and patients


Three Paths to the Future:Which Door Will Doctors Choose?

TODAY

FUTURE #1

FUTURE #2

FUTURE #3


Door #1: “Value-Based Purchasing”(i.e., Pay for Performance)

TODAY

PAYER-DESIGNEDPAY FOR PERFORMANCE


The Dominant Approach to “Payment Reform” Today is P4P

QUALITYMEASURES

• Mammograms• Colon Cancer Screening

• HbA1c Control• LDL

P4P Bonus

FFS


P4P Hasn’t Worked Terribly Well

QUALITYMEASURES



P4P Bonus

FFS

• A small bonus may not be enough to pay for the added costs of improving quality

• A small bonus may not be enough to offset loss of fee-for-service revenuefrom healthier patients or lower utilization

• A small bonus may not be enough to offset the costs of collecting and reporting the quality data


More Measure Burden Each Year,With the Same Small Bonuses

QUALITYMEASURES


• Flu Vaccine• Tobacco Counseling

• Hypertension Control

• HbA1c Control• LDL• Eye Exams• Aspirin Use

P4P Bonus

P4P Bonus

FFS FFS

QUALITYMEASURES




Bonuses Turn to Penalties With No Way to Support Better Care

P4P Bonus

P4P Bonus

QUALITYMEASURES


• Flu Vaccine• BMI Screens• Tobacco Counseling

• Fall Risk Assessment



P4P Penalty

FFS FFS FFS

QUALITYMEASURES


• Flu Vaccine• Tobacco Counseling



QUALITYMEASURES




The End of Collaboration?

• In the CMS Value-Based Payment Modifier, bonuses are only paid to physicians who have above average quality if penalties are assessed on other physicians with below average quality

• To maintain budget neutrality, the size of bonuses depends on the size of penalties

• Under this system, why would high-performing physicians want to help under-performing physicians to improve?


Over-Emphasis on Narrow Quality Measures Can Harm Patients

Hypoglycemia1 Yr Mortality: 19.9%

30 Day Readmits: 16.3%

Hyperglycemia1 Yr Mortality: 17.1%

30 Day Readmits: 15.3%

Source: National Trends in US Hospital Admissions for Hyperglycemia and HypoglycemiaAmong Medicare Beneficiaries, 1999 to 2011 JAMA Internal Medicine May 17, 2014


Providers May Be Penalized forHaving Patients With Higher Needs

JAMA Intern Med. Published online September 14, 2015. doi:10.1001/jamainternmed.2015.4660


Current Regulations Are Increasing P4P Penalties Over Time

FFS+

PQRS+

MU+

VBM

$-4.5%+x%

FFS+

PQRS+

MU+

VBM

-6%+x%

FFS+

PQRS+

MU+

VBM

-9%

+x%

FFS+

PQRS+

MU+

VBM

-10%

+x%

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024


MACRA (SGR Repeal) Slowed,Simplified, and Balanced This

FFS+

PQRS+

MU+

VBM

$-4.5%+x%

FFS+

PQRS+

MU+

VBM

-6%+x%

FFS+

PQRS+

MU+

VBM

-9%

+x%

FFS+

PQRS+

MU+

VBM

-10%

+x%

FFS+

MIPS

-4%+4%

FFS+

MIPS

-5%

+5%

FFS+

MIPS

-9%

+9%

FFS+

MIPS

-9%

+9%

FFS+

MIPS

-9%

+9%

FFS+

MIPS

-7%

+7%

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024


But MIPS is P4P on Steroids

MIPS“Merit-Based

IncentivePaymentSystem”

Quality

Resource Use

“Clinical Practice Improvement Activities”

EHR “Meaningful Use”

50% -> 30%

10% -> 30%

25%

15%

FFS+

PQRS+

MU+

VBM

$-4.5%+x%

FFS+

PQRS+

MU+

VBM

-6%+x%

FFS+

PQRS+

MU+

VBM

-9%

+x%

FFS+

PQRS+

MU+

VBM

-10%

+x%

FFS+

MIPS

-4%+4%

FFS+

MIPS

-5%

+5%

FFS+

MIPS

-9%

+9%

FFS+

MIPS

-9%

+9%

FFS+

MIPS

-9%

+9%

FFS+

MIPS

-7%

+7%

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024


Door #1: Accountability Without Resources or Flexibility

TODAY


• Accountability for:• Quality Measures• Total Spending on Patients• “Practice Improvement”• “Meaningful Use

• No Change in What You’re Paid Foror How You’re Paid


Door #2: Alternative Payment Models

TODAY


ALTERNATIVE PAYMENT MODELS


MACRA Incentives to Participate in Alternative Payment Models

FFS+

PQRS+

MU+

VBM

$-4.5%+x%

FFS+

PQRS+

MU+

VBM

-6%+x%

FFS+

PQRS+

MU+

VBM

-9%

+x%

FFS+

PQRS+

MU+

VBM

-10%

+x%

FFS+

MIPS

-4%+4%

FFS+

MIPS

-5%

+5%

FFS+

MIPS

-9%

+9%

FFS+

MIPS

-9%

+9%

FFS+

MIPS

-9%

+9%

FFS+

MIPS

-7%

+7%

FFS+

PQRS+

MU+

VBM

$

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

-4.5%+x%

FFS+

PQRS+

MU+

VBM

-6%+x%

FFS+

PQRS+

MU+

VBM

-9%

+x%

FFS+

PQRS+

MU+

VBM

-10%

+x%

FFS+

25%APM

+5%

FFS+

25%APM

+5%

FFS+

50%APM

+5%

FFS+

75%APM

+5%

FFS+

75%APM

+5%

FFS+

50%APM

+5%


HHS Announced Its Intent to Move Away From VBP & FFS+P4P

FFS

AlternativePayment Models

“Built on FFSArchitecture” &

Population-BasedPayment

FFS - No Link to Qualty

Fee forService –

“Link to Quality”

15%

55%

30% AlternativePayment Models




Fee forService –


10%

40%

50%

2016 2018PAST


HHS Announced Its Intent to Move Away From VBP & FFS+P4P

FFS

AlternativePayment Models




Fee forService –


15%

55%

30% AlternativePayment Models




Fee forService –


10%

40%

50%

2016 2018NOW

What the heck is an“Alternative Payment ModelBuilt on FFS Architecture?”

And is that better thanFFS+P4P?


CMS “Alternative Payment Models”Announced To Date

TYPE OF PROVIDER CMS PROGRAM PAYMENT STRUCTURE

Health Systems,Multi-Specialty Groups,

PHOs, and IPAs

Accountable Care Organizations

(MSSP & Pioneer)

FFS+

Shared Savings on Attributed Total Spending

Primary Care Comprehensive Primary Care Initiative

FFS +

PMPM $ for Attributed Patients+

Shared Savings onAttributed Total Spending

(for State or Region)

Specialty Care Oncology Care Model

FFS+



(for 6-month window)

Hospitals and Post-Acute Care

Comprehensive Carefor Joint Replacement

FFS+

Bonuses/Penalties on Attributed Total Spending


CMS “Alternative Payment Models”Don’t Change Current Payments



PHOs, and IPAs


(MSSP & Pioneer)

FFS+



FFS +





FFS+






FFS+

Hospital Bonuses/Penalties for Attributed Total Spending


Some Provide Additional Upfront Resources to Physicians…



PHOs, and IPAs


(MSSP & Pioneer)

FFS+



FFS +





FFS+






FFS+

Hospital Bonuses/Penalties forAttributed Total Spending


…Most Only Provide More $ After Other Spending is Reduced



PHOs, and IPAs


(MSSP & Pioneer)

FFS+



FFS +





FFS+






FFS+



Problems With “Shared Savings”

• Physicians receive no upfront resources to improve care management for patients

• Already efficient providers receive little or no additionalrevenue and may be forced out of business

• Providers that have been practicing inefficiently or inappropriately are paid more than already-efficient providers

• Providers could be rewarded for denying needed care as well as by reducing overuse

• Providers are placed at risk for costs they cannot control and random variation in spending


Higher Payment Only for Patients “Attributed” to Physician/Provider



PHOs, and IPAs


(MSSP & Pioneer)

FFS+



FFS +





FFS+

PMPM $ for Treated Patients+





FFS+



Models Hold Individual Physicians Accountable for Total Cost of Care



PHOs, and IPAs


(MSSP & Pioneer)

FFS+



FFS +





FFS+

PMPM $ for Treated Patients+





FFS+



CMS Tries to Make Each ProviderAccountable for Total Spending

Spending onAll

Servicesthe

ACO’sPatientsReceive

Hea

lthca

re S

pend

ing

Paymentsto

ACOs

ACOs

Spending onAll

Servicesthe

Oncologists’PatientsReceiveDuringChemo

Treatment

Paymentsto

Oncologists

OncologyCare

Model

Spending onAll

ChronicDisease

CareandCare

Related toJoint

SurgeryAfter

Discharge

Paymentsto

Hospitals

ComprehensiveCare for

Joint Replacement

Spending onAll

Servicesthe

PCP’sPatientsReceive

Paymentsto

PCPs

ComprehensivePrimary Care

Initiative


CMS Proposed “ComprehensiveCare for Joint Replacement”

PATIENT Hospital Costsfor Surgery

Post-Acute Care(IRF, SNF, HH)Readmits

EPISODE PAYMENT FOR SURGERIES


Principal Goal of CMS ProposalIs Reducing Post-Acute Care Cost



Hospital Costsfor Surgery

Post-Acute CareReadmits SAVINGS



Proposed Structure EncouragesLower Spending, Not Better Care






• No risk adjustment – target spending amount is the same for high-risk, poor functional status patients as low-risk patients

• No flexibility to deliver different types of post-acute care orto be paid differently – no change in current payment systems


Under CMS Proposal, HospitalsGet the Savings, Not Physicians



CMS

Hospital

Physicians






• All savings go to hospital; hospital is at risk for higher post-acute care spending


Over Time, CMS Keeps Moreand More of the Savings






CMS

Hospital

Physicians



• All savings go to hospital; hospital is at risk for higher post-acute care spending

• Target spending is reduced every year to match lower FFS spending


Door #2: Accountability Without Flexibility or Resources

TODAYPAYER-DESIGNED

ALTERNATIVE PAYMENT MODELS

• Accountability for Total Spending

• No Change in What You’re Paid Foror How You’re Paid


What’s Behind Door #3?

TODAY


PAYER-DESIGNEDALTERNATIVE PAYMENT

MODELS

FUTURE #3


Physicians Taking Charge ofPayment & Delivery Reform

TODAY



MODELS

PHYSICIAN-DESIGNEDCARE DELIVERY &

PAYMENT SYSTEMS


Instead of Payer Designed Payment Systems…

Medicare andHealth Plans

DefinePayment Systems

Physicians HaveTo Change Care

to Align WithPayment Systems

Patients andPhysicians

May NotCome Out Ahead

HOW PAYMENT REFORMS ARE DESIGNED TODAY


Physicians Should Design Payments to Support Good Care

Medicare andHealth Plans

DefinePayment Systems

Physicians HaveTo Change Care

to Align WithPayment Systems

Patients andPhysicians

May NotCome Out Ahead

Physicians Redesign Care

and IdentifyPayment Barriers

Payers ChangePayment to

Support Redesigned Care

Patients Get Better Care andPhysicians Stay

Financially Viable

THE RIGHT WAY TO DESIGN PAYMENT REFORMS

HOW PAYMENT REFORMS ARE DESIGNED TODAY

How Can Well-Designed

Alternative Payment Models Help Physicians Financially?


Most of the Money in HealthcareDoesn’t Go to Physicians

Physicians:16%


Medicare Payment Silos Pit Physicians Against Each Other

PCPPayment

SpecialistPayment

PCPPayment

SpecialistPayment

PhysicianPayment(Part B)


All Physicians Could Earn More By Lowering Other Healthcare Costs

PCP Payment

SpecialistPayment

PCP Payment

DrugCosts

Hospital &Post-AcuteCare Costs

SpecialistPaymentPhysician

Payment(Part B)

TotalHealthcare

Costs(Parts A,B, and D)

DrugCosts

(Part D)

Hospital &Post-AcuteCare Costs

(Part A)

SAVINGS

How Do You Definea Good Alternative Payment Model?


Starting With ALL Spending on a Physician’s Patients…

ServicesDelivered by

Physician

$

PhysicianPracticeRevenue

AllOther

Spendingon the

Physician’sPatients


…Identify the Spending the Physician Can Control/Influence


Physician

$


UnrelatedServices

(Other PatientConditions)

RelatedServices

(Deliveredby

OtherProviders

Which WereOrdered byor Related

to thePhysician’sServices)


Focus On Services the Physician Can Potentially Influence


Physician

$


UnrelatedServices

(Other PatientConditions)

RelatedServices

(Deliveredby

OtherProviders

Which WereOrdered byor Related

to thePhysician’sServices)


Step 1: Identify Opportunities to Reduce Related Spending

$


FFS

Opportunitiesto Reduce

RelatedSpending

RelatedServices

OPPORTUNITIES TO REDUCE OTHER SPENDING

• Avoidable Admissions and Readmissions• Unnecessary Tests• Use of Lower-Cost Settings

• Home care instead of facility-based care• More Efficient Delivery of Treatments

• Shorter inpatient stays• Preventable Complications of Treatment

• Infections, medication side effects


Physician


Step 2: Identify Barriers in Current Payments That Need to Be Fixed

$


FFS


RelatedSpending

RelatedServices







Physician

BARRIERS IN CURRENT FFS SYSTEM• No payment for non-face-to-face services• No payment for nurse care managers• No payment for telemedicine services• No payment for coordination calls with PCPs







Step 3: Develop APM to Remove Barriers & Achieve Opportunities

$


FFS


RelatedSpending

RelatedServices

BARRIERS IN CURRENT FFS SYSTEM• No payment for non-face-to-face services• No payment for nurse care managers• No payment for telemedicine services• No payment for coordination calls with PCPs

Alternative Payment ModelReduce Total Spending Without Harming Patients

Improve Payment for Physician Services


Physician

Opportunities for Higher Valuein Physiatry


Today: Many Patients Receive Inpatient Care + Post-Acute Care

InpatientTreatment

Payer(CMS orHealthPlan)

$$Post-Acute CarePATIENT


No Controls on Cost of Post-Acute Care or Complications of PAC

InpatientTreatment

HospitalReadmits

& AdditionalPost-Acute

Care


$$$$$$Post-Acute

CarePATIENT


Opportunity #1: Reduce Complications During PAC

InpatientTreatment

High Rates of Readmits& AdditionalPost-Acute

Care

Low Rates of Readmits

and PAC

Post-AcuteCare

Specialist $Payer

(CMS orHealthPlan)

Post-Acute CarePATIENT $


Opportunity #2: Reduce the Cost of Post-Acute Care

InpatientTreatment

Higher-CostPost-Acute

Care

Lower-CostPost-Acute

Care

$


Care


and PAC

Post-AcuteCare

Specialist$


PATIENT $


Opportunity #3: Treat Patient’s Condition Without Inpatient Care

InpatientTreatment


Care


Care

$

ConditionSpecialist

OutpatientTreatment

$


Care


and PAC

Post-AcuteCare

Specialist$


PATIENT $


Opportunity #4: Improve Overall Outcomes for Patient at Lower Cost

InpatientTreatment


Care


Care

$

OutpatientTreatment

$


Care


and PAC

Post-AcuteCare

Specialist

High-Value:Good

Outcomesat LowCost

Low-Value:Poor

Outcomesat LowCost

Low-Value:Good

Outcomesat High

Cost

$

ConditionSpecialist

PATIENT


One Overall Team Managing thePatient’s Condition for High Value

InpatientTreatment


Care


Care

$

OutpatientTreatment

$


Care


and PAC

High-Value:Good

Outcomesat LowCost

Low-Value:Poor

Outcomesat LowCost

Low-Value:Good

Outcomesat High

Cost

$ConditionManager& Team

PATIENT


Condition Management for Stroke

What Kind ofAlternative Payment Models

Support This?


There Are More Than Just 3 APMs

• Medical Homes• Hospital-Based Episodes• Accountable Care Organizations


Many Types of Alternative Payment Models

1. Payment for Specific Services That Reduce Avoidable Spending

2. Condition-Based Payment for Alternative Treatment Options Delivered by One Physician

3. Bundled Payment to Physician and Hospital or Site of Service Facility

4. Bundled Payment for Multiple Choices of Services and Providers

5. Warrantied Payment for Planned Services and Services to Treat Avoidable Complications

6. Episode Payments for a Procedure7. Condition-Based Payment for Management of Condition8. Global Payment for Management of Multiple Conditions

APM #1 Payment for Specific Services

That Reduce Avoidable Spending


Step 1:Identify Avoidable Services

E&M $

Procedure $

AvoidableServices

RelatedServices

$


FFS EXAMPLES OF AVOIDABLE SERVICES• Hospital readmissions during post-acute care• Unnecessarily long stays in post-acute care• Inpatient post-acute care for patients who

could return home• Inpatient treatment for patients who could be

managed on an outpatient basis


Step 2: Identify the Gaps in the Current Payment System

UnpaidServices

AvoidableServices

RelatedServices

$


FFS

EXAMPLES OF UNPAID SERVICES• No payment for short-term intensive rehab• No payment for nurse care managers• No payment for telemedicine services• No payment for coordination calls among

physiciansE&M $

Procedure $

EXAMPLES OF AVOIDABLE SERVICES• Hospital readmissions during post-acute care• Unnecessarily long stays in post-acute care• Inpatient post-acute care for patients who

could return home• Inpatient treatment for patients who could be

managed on an outpatient basis


APM Part 1: Pay for the Unpaid Services

UnpaidServices

AvoidableServices

RelatedServices

New Svc $

$


FFS Alternative Payment Model

E&M $

Procedure $

E&M $

Procedure $


Goal: Reduce the Avoidable Services

UnpaidServices

AvoidableServices

RelatedServices

AvoidableServices

New Svc $

Net Savings$


RelatedServices


E&M $

Procedure $

E&M $

Procedure $


“More Payment” is Not an APM;Accountability Is Also Needed

UnpaidServices

AvoidableServices

RelatedServices

AvoidableServices

New Svc $

Net Savings$


RelatedServices


Whatassurance

does the payerhave that thenew services

will be used toreduce

avoidableservices??

New FFSPayments

E&M $

Procedure $

E&M $

Procedure $


APM Part 2: Modify Payments Based on Performance

UnpaidServices

AvoidableServices

RelatedServices

AvoidableServices

New Svc $

Net Savings$


AvoidableServices

New Svc $

Net Savings

RelatedServices

RelatedServices

FFS Alternative Payment ModelNew FFSPayments

AccountabilityP4P

E&M $

Procedure $

E&M $

Procedure $

E&M $

Procedure $


Components of APM #1 (Payment for Specific Services

That Reduce Avoidable Spending)

• Continuation of existing fee-for-service payments

• Billing for new services not previously paid for– Creation of new CPT codes

and/or– Authorization of payment for existing CPT codes

• Measurement of avoidable utilization– Focusing on the types of services to be reduced by the new services

• Measurement of quality/outcome– To ensure that the utilization avoided is truly unnecessary

• Adjustment of payment amounts for the new services based on performance on the utilization and quality/outcomes measures– “Pay for performance” focused on the new services– No effect on payment for existing services


Examples of APM #1 (Payment for Specific Services

That Reduce Avoidable Spending)

• Primary Care Medical Home– Allow primary care physicians to bill for care management services– Reduce ED visits/admits for patients with chronic disease

• Patient-Centered Oncology Payment (ASCO)– Pay oncologists for enhanced treatment planning and for

care management services during and after chemotherapy– Reduce ED visits/admits for complications due to toxicity– Reduce overuse of testing and expensive supportive drugs

• Safely discharging emergency room patients (ACEP)– Pay emergency physicians for discharge planning/coordination

services– Reduce hospital admissions for patients who could be discharged

• Implementing appropriate use criteria for diagnostic testing (ACC – SMARTCare)– Pay PCPs and cardiologists to implement AUC– Reduce unnecessary testing and unnecessary interventions

APM #4 Bundled Payment for Treatment Options

Ordered From Different Providers


Today: Patient Receives Services from Physician & Other Providers

$


OtherRelatedServices

ServicesDelivered byProvider A

FFS

E&M $

Procedure $


No Ability or Reward for Physician to Use Lower Cost Provider

$


OtherRelatedServices Other

RelatedServices

ServicesDelivered byProvider A

ServicesDelivered byProvider B

Savings

FFS FFS

E&M $

Procedure $

E&M $

Procedure $


APM: Bundle the Physician & Other Provider’s Services

$

PhysicianPracticeRevenue E&M $


BundledPayment toPhysician

for Procedureand Services

Ordered

Payer Savings

Alternative Payment Model


Now, Physician Has Flexibility to Deliver/Order Different Services…

$





Ordered

Payment toProvider A

E&M $


Physician CostsPhysician Margin

Payment toProvider B




Ordered

Payer Savings Payer Savings



…And Physician Can Keep Some of the Savings

$





Ordered

Payment toProvider A

E&M $



Payment toProvider B

Physician Costs

Physician Margin



Ordered

Payer Savings Payer Savings



Bundled Payment Needs toBe Stratified By Patient Acuity

$



E&M $



BundledPayment

forLow-NeedPatients

BundledPayment

forHigh-Need

Patients

E&M $


BundledPayment

forMedium-Need

Patients


Components of APM #4 (Bundled Payment for Treatment Options

From Multiple Providers)

• Single, bundled payment to physician to cover both the physician’s services and services delivered by other providers– Not all other services need to be included

• Bundled payment replaces current fee-for-service payments for the specific services included– Physician bills for the bundled payment– The other providers bill the physician (prospective)– The other providers’ bills are deducted from bundled payment

(retrospective)

• Financial management entity needed to manage payments to other providers– May be the physician practice, an IPA, a PHO, or a health system

• Payment amounts stratified based on patient needs

• Adjustment of payment amounts based on outcomes


Examples of APM #4 (Bundled Payment for Treatment Options

From Multiple Providers)• Bundled Payment for Transplant Surgery

– Transplant team receives one payment for all services to patients– Team has flexibility to allocate payment among all physicians and

providers based on their costs and contributions to outcomes

• Facility-Independent Payment Bundle for Colonoscopy (AGA)– Single payment for all services for a screening colonoscopy:

• Gastronenterologist• Anesthesiologist or Nurse anesthetist• Facility (hospital, physician office)

• Bundled Payment for Post-Acute Care Following a Hospitalization (CMS BPCI Model 3)– Physicians (or other entities) take responsibility for managing total cost

of post-acute care– Flexibility to deliver different kinds of post-acute care than are

supported under current payment systems


Example: Better Management of Back Pain



CURRENT

$/Patient # Pts Total $

Primary Care

Evaluations $73 100 $7,300

Treatment ofBack Pain

• 100 patients with back pain visit PCP forevaluation



CURRENT


Primary Care


Non-Surg.Tx

Management $239 50 $11,950

Phys. Therapy $390 50 $19,500

Subtotal $31,450



• Physical therapy usedby 50% of patients



CURRENT


Primary Care


Non-Surg.Tx

Management $239 50 $11,950

Phys. Therapy $390 50 $19,500

Subtotal $31,450

Surgeon $1,655 50 $82,750

Hospital Pmt

Surgeries $23,500 50 $1,175,000




• Surgery performedon 50% ofevaluated patients



CURRENT


Primary Care


Non-Surg.Tx

Management $239 50 $11,950

Phys. Therapy $390 50 $19,500

Subtotal $31,450

Surgeon $1,655 50 $82,750

Hospital Pmt

Surgeries $23,500 50 $1,175,000

Total Pmt/Cost 100 $1,296,500







CURRENT


Primary Care


Non-Surg.Tx

Management $239 50 $11,950

Phys. Therapy $390 50 $19,500

Subtotal $31,450

Surgeon $1,655 50 $82,750

Hospital Pmt

Surgeries $23,500 50 $1,175,000






• 30% of surgeriesavoidable with betteroutpatient management


Under FFS, Poor Payment forDiagnosis & Treatment Planning

CURRENT


Primary Care


Non-Surg.Tx

Management $239 50 $11,950

Phys. Therapy $390 50 $19,500

Subtotal $31,450

Surgeon $1,655 50 $82,750

Hospital Pmt

Surgeries $23,500 50 $1,175,000



Under FFS, Poor Payment forNon-Surgical Options

CURRENT


Primary Care


Non-Surg.Tx

Management $239 50 $11,950

Phys. Therapy $390 50 $19,500

Subtotal $31,450

Surgeon $1,655 50 $82,750

Hospital Pmt

Surgeries $23,500 50 $1,175,000



Under FFS, Fewer Surgeries =Losses for Surgeons & Hospitals

CURRENT FUTURE

$/Patient # Pts Total $ $/Patient # Pts Total $ Chg

Primary Care


Non-Surg.Tx

Management $239 50 $11,950

Phys. Therapy $390 50 $19,500

Subtotal $31,450

Surgeon $1,655 50 $82,750 $1,655 35 $57,925 -30%

Hospital Pmt

Surgeries $23,500 50 $1,175,000 $23,500 35 $822,500 -30%



A P4P Bonus to the Surgeon Doesn’t Offset Loss of Revenue

CURRENT FUTURE


Primary Care


Non-Surg.Tx

Management $239 50 $11,950

Phys. Therapy $390 50 $19,500

Subtotal $31,450

Surgeon $1,655 50 $82,750 $1,721 35 $60,242 -27%

Hospital Pmt

Surgeries $23,500 50 $1,175,000


+4%


Is There a Better Way?

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 ?

Non-Surg.Tx

Management $239 50 $11,950 ?

Phys. Therapy $390 50 $19,500 ?

Subtotal $31,450

Surgeon $1,655 50 $82,750 ?

Hospital Pmt

Surgeries $23,500 50 $1,175,000 ?



A Better Way: Pay PCPs for GoodDiagnosis & Treatment Planning

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150

Non-Surg.Tx

Management $239 50 $11,950

Phys. Therapy $390 50 $19,500

Subtotal $31,450

Surgeon $1,655 50 $82,750

Hospital Pmt

Surgeries $23,500 50 $1,175,000

Total Pmt/Cost 100 $1,296,500Better Payment for Condition Management

• PCP paid adequately to help patient decide on treatment options


A Better Way: Pay Physiatrists for Non-Surgical Management

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150

Non-Surg.Tx

Management $239 50 $11,950 $500

Phys. Therapy $390 50 $19,500 $750

Subtotal $31,450

Surgeon $1,655 50 $82,750

Hospital Pmt

Surgeries $23,500 50 $1,175,000


• PCP paid adequately to help patient decide on treatment options• Physiatrist paid to deliver more effective non-surgical care


A Better Way: Pay AdequatelyFor the Necessary Surgeries

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150

Non-Surg.Tx

Management $239 50 $11,950 $500

Phys. Therapy $390 50 $19,500 $750

Subtotal $31,450

Surgeon $1,655 50 $82,750 $2,500

Hospital Pmt

Surgeries $23,500 50 $1,175,000


• PCP paid adequately to help patient decide on treatment options• Physiatrist paid to deliver more effective non-surgical care• Surgeon paid more per surgery for patients who need surgery


If That Results in 30% Fewer Surgeries…

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150 100

Non-Surg.Tx

Management $239 50 $11,950 $500 65

Phys. Therapy $390 50 $19,500 $750 65

Subtotal $31,450

Surgeon $1,655 50 $82,750 $2,500 35

Hospital Pmt

Surgeries $23,500 50 $1,175,000



Physicians Could Be Paid More…

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150 100 $15,000 105%

Non-Surg.Tx

Management $239 50 $11,950 $500 65 $32,500 172%

Phys. Therapy $390 50 $19,500 $750 65 $48,750 150%

Subtotal $31,450 $81,250 158%

Surgeon $1,655 50 $82,750 $2,500 35 $87,500 +6%

Hospital Pmt

Surgeries $23,500 50 $1,175,000



Physicians Could Be Paid More… ….While Still Reducing Total $

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150 100 $15,000 105%

Non-Surg.Tx

Management $239 50 $11,950 $500 65 $32,500 172%

Phys. Therapy $390 50 $19,500 $750 65 $48,750 150%

Subtotal $31,450 $81,250 158%

Surgeon $1,655 50 $82,750 $2,500 35 $87,500 +6%

Hospital Pmt

Surgeries $23,500 50 $1,175,000 $23,500 35 $822,500 -30%

Total Pmt/Cost 100 $1,296,500 100 $1,006,250 -22%


Win-Win-Win for Physicians, Payers, & Patients

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150 100 $15,000 105%

Non-Surg.Tx

Management $239 50 $11,950 $500 65 $32,500 172%

Phys. Therapy $390 50 $19,500 $750 65 $48,750 150%

Subtotal $31,450 $81,250 158%

Surgeon $1,655 50 $82,750 $2,500 35 $87,500 +6%

Hospital Pmt

Surgeries $23,500 50 $1,175,000 $23,500 35 $822,500 -30%

Total Pmt/Cost 100 $1,296,500 100 $1,006,250 -22%Physicians Win Payer Wins


Do Hospitals Have to Lose In Order for Physicians & Payers To Win?

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150 100 $15,000 105%

Non-Surg.Tx

Management $239 50 $11,950 $500 65 $32,500 172%

Phys. Therapy $390 50 $19,500 $750 65 $48,750 150%

Subtotal $31,450 $81,250 158%

Surgeon $1,655 50 $82,750 $2,500 35 $87,500 +6%

Hospital Pmt

Surgeries $23,500 50 $1,175,000 $23,500 35 $822,500 -30%

Total Pmt/Cost 100 $1,296,500 100 $1,006,250 -22%Physicians Win Payer WinsHospital Loses


What Should Matter to Hospitals is Margin, Not Revenues (Volume)


Hospital Costs Are Not Proportional to Utilization

$800$820$840$860$880$900$920$940$960$980$1,000

81828384858687888990919293949596979899100

$000

#Patients

Cost & Revenue Changes With Fewer Patients

.

Costs

20% reduction in volume

7% reduction in cost


Reductions in Utilization Reduce Revenues More Than Costs

$800$820$840$860$880$900$920$940$960$980$1,000

81828384858687888990919293949596979899100

$000

#Patients


Revenues

Costs

20% reduction in volume

7% reduction in cost

20% reduction in revenue


Causing Negative Marginsfor Hospitals

$800$820$840$860$880$900$920$940$960$980$1,000

81828384858687888990919293949596979899100

$000

#Patients


Revenues

Costs

Payers Will BeUnderpaying For

Care If Surgeries,

Readmissions, Etc. Are Reduced


But Spending Can Be Reduced Without Bankrupting Hospitals

$800$820$840$860$880$900$920$940$960$980$1,000

81828384858687888990919293949596979899100

$000

#Patients


Revenues

Costs

Payers CanStill Save $Without CausingNegative Marginsfor Hospital


We Need to Understand theHospital’s Cost Structure

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150 100 $15,000 105%

Non-Surg.Tx

Management $239 50 $11,950 $500 65 $32,500 172%

Phys. Therapy $390 50 $19,500 $750 65 $48,750 150%

Subtotal $31,450 $81,250 158%

Surgeon $1,655 50 $82,750 $2,500 35 $87,500 +6%

Hospital Pmt

Surgeries $23,500 50 $1,175,000 $23,500 35 $822,500 -30%

Total Pmt/Cost 100 $1,296,500 100 $1,006,250 -22%


Adequacy of Payment Depends On Fixed/Variable Costs & Margins

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150 100 $15,000 105%

Non-Surg.Tx

Management $239 50 $11,950 $500 65 $32,500 172%

Phys. Therapy $390 50 $19,500 $750 65 $48,750 150%

Subtotal $31,450 $81,250 158%

Surgeon $1,655 50 $82,750 $2,500 35 $87,500 +6%

Hospital Pmt

Fixed Costs $14,100 60% $705,000

Variable Costs $8,225 35% $411,250

Margin $1,175 5% $58,750

Subtotal $23,500 50 $1,175,000



Now, if the Number of Procedures is Reduced…

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150 100 $15,000 105%

Non-Surg.Tx

Management $239 50 $11,950 $500 65 $32,500 172%

Phys. Therapy $390 50 $19,500 $750 65 $48,750 150%

Subtotal $31,450 $81,250 158%

Surgeon $1,655 50 $82,750 $2,500 35 $87,500 +6%

Hospital Pmt

Fixed Costs $14,100 60% $705,000

Variable Costs $8,225 35% $411,250

Margin $1,175 5% $58,750

Subtotal $23,500 50 $1,175,000 35



…Fixed Costs Will Remain the Same (in the Short Run)…

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150 100 $15,000 105%

Non-Surg.Tx

Management $239 50 $11,950 $500 65 $32,500 172%

Phys. Therapy $390 50 $19,500 $750 65 $48,750 150%

Subtotal $31,450 $81,250 158%

Surgeon $1,655 50 $82,750 $2,500 35 $87,500 +6%

Hospital Pmt

Fixed Costs $14,100 60% $705,000 $705,000 0%

Variable Costs $8,225 35% $411,250

Margin $1,175 5% $58,750

Subtotal $23,500 50 $1,175,000 35



…Variable Costs Will Go Down in Proportion to Procedures…

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150 100 $15,000 105%

Non-Surg.Tx

Management $239 50 $11,950 $500 65 $32,500 172%

Phys. Therapy $390 50 $19,500 $750 65 $48,750 150%

Subtotal $31,450 $81,250 158%

Surgeon $1,655 50 $82,750 $2,500 35 $87,500 +6%

Hospital Pmt

Fixed Costs $14,100 60% $705,000 $705,000 0%

Variable Costs $8,225 35% $411,250 $8,225 $287,875 -30%

Margin $1,175 5% $58,750

Subtotal $23,500 50 $1,175,000 35



…And Even With a Higher Margin for the Hospital…

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150 100 $15,000 105%

Non-Surg.Tx

Management $239 50 $11,950 $500 65 $32,500 172%

Phys. Therapy $390 50 $19,500 $750 65 $48,750 150%

Subtotal $31,450 $81,250 158%

Surgeon $1,655 50 $82,750 $2,500 35 $87,500 +6%

Hospital Pmt

Fixed Costs $14,100 60% $705,000 $705,000 0%

Variable Costs $8,225 35% $411,250 $8,225 $287,875 -30%

Margin $1,175 5% $58,750 $64,625 +10%

Subtotal $23,500 50 $1,175,000 35



…The Hospital Gets Less Total Revenue But Higher Margin

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150 100 $15,000 105%

Non-Surg.Tx

Management $239 50 $11,950 $500 65 $32,500 172%

Phys. Therapy $390 50 $19,500 $750 65 $48,750 150%

Subtotal $31,450 $81,250 158%

Surgeon $1,655 50 $82,750 $2,500 35 $87,500 +6%

Hospital Pmt

Fixed Costs $14,100 60% $705,000 $705,000 0%

Variable Costs $8,225 35% $411,250 $8,225 $287,875 -30%

Margin $1,175 5% $58,750 $64,625 +10%

Subtotal $23,500 50 $1,175,000 35 $1,057,500 -10%



…And The Payer Still Saves Money

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150 100 $15,000 105%

Non-Surg.Tx

Management $239 50 $11,950 $500 65 $32,500 172%

Phys. Therapy $390 50 $19,500 $750 65 $48,750 150%

Subtotal $31,450 $81,250 158%

Surgeon $1,655 50 $82,750 $2,500 35 $87,500 +6%

Hospital Pmt

Fixed Costs $14,100 60% $705,000 $705,000 0%

Variable Costs $8,225 35% $411,250 $8,225 $287,875 -30%

Margin $1,175 5% $58,750 $64,625 +10%

Subtotal $23,500 50 $1,175,000 35 $1,057,500 -10%

Total Pmt/Cost 100 $1,296,000 100 $1,241,250 -4%


Win-Win-Win-Win for PatientsPhysicians, Hospital, and Payer

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150 100 $15,000 105%

Non-Surg.Tx

Management $239 50 $11,950 $500 65 $32,500 172%

Phys. Therapy $390 50 $19,500 $750 65 $48,750 150%

Subtotal $31,450 $81,250 158%

Surgeon $1,655 50 $82,750 $2,500 35 $87,500 +6%

Hospital Pmt

Fixed Costs $14,100 60% $705,000 $705,000 0%

Variable Costs $8,225 35% $411,250 $8,225 $287,875 -30%

Margin $1,175 5% $58,750 $64,625 +10%

Subtotal $23,500 50 $1,175,000 35 $1,057,500 -10%

Total Pmt/Cost 100 $1,296,000 100 $1,241,250 -4%

Physicians Win

Payer Wins

Hospital Wins


What Payment Model Supports This Win-Win-Win Approach?

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150 100 $15,000 105%

Non-Surg.Tx

Management $239 50 $11,950 $500 65 $32,500 172%

Phys. Therapy $390 50 $19,500 $750 65 $48,750 150%

Subtotal $31,450 $81,250 158%

Surgeon $1,655 50 $82,750 $2,500 35 $87,500 +6%

Hospital Pmt

Fixed Costs $14,100 60% $705,000 $705,000 0%

Variable Costs $8,225 35% $411,250 $8,225 $287,875 -30%

Margin $1,175 5% $58,750 $64,625 +10%

Subtotal $23,500 50 $1,175,000 35 $1,057,500 -10%

Total Pmt/Cost 100 $1,296,000 100 $1,241,250 -4%


Renegotiating Individual Feesis Impractical

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150 100 $15,000 105%

Non-Surg.Tx

Management $239 50 $11,950 $500 65 $32,500 172%

Phys. Therapy $390 50 $19,500 $750 65 $48,750 150%

Subtotal $31,450 $81,250 158%

Surgeon $1,655 50 $82,750 $2,500 35 $87,500 +6%

Hospital Pmt

Fixed Costs $14,100 60% $705,000 $705,000 0%

Variable Costs $8,225 35% $411,250 $8,225 $287,875 -30%

Margin $1,175 5% $58,750 $64,625 +10%

Subtotal $23,500 50 $1,175,000 $30,214 35 $1,057,500 -10%

Total Pmt/Cost 100 $1,296,000 100 $1,241,250 -4%


Pay Based on the Patient’s Condition, Not on the Procedures

CURRENT FUTURE


Primary Care


Non-Surg.Tx

Management $239 50 $11,950

Phys. Therapy $390 50 $19,500

Subtotal $31,450

Surgeon $1,655 50 $82,750

Hospital Pmt

Fixed Costs $14,100 60% $705,000

Variable Costs $8,225 35% $411,250

Margin $1,175 5% $58,750

Subtotal $23,500 50 $1,175,000

Total Pmt/Cost $12,695 100 $1,296,000


Plan to Offer Care of the Condition at a Lower Cost Per Patient

CURRENT FUTURE


Primary Care


Non-Surg.Tx

Management $239 50 $11,950

Phys. Therapy $390 50 $19,500

Subtotal $31,450

Surgeon $1,655 50 $82,750

Hospital Pmt

Fixed Costs $14,100 60% $705,000

Variable Costs $8,225 35% $411,250

Margin $1,175 5% $58,750

Subtotal $23,500 50 $1,175,000

Total Pmt/Cost $12,965 100 $1,296,000 $12,413 100 -4%


Use the Payment as a Budget to Redesign Care…

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 100 $15,000 105%

Non-Surg.Tx

Management $239 50 $11,950

Phys. Therapy $390 50 $19,500

Subtotal $31,450 65 $81,250 158%

Surgeon $1,655 50 $82,750 35 $87,500 +6%

Hospital Pmt

Fixed Costs $14,100 60% $705,000

Variable Costs $8,225 35% $411,250

Margin $1,175 5% $58,750

Subtotal $23,500 50 $1,175,000 35 $1,057,500 -10%

Total Pmt/Cost $12,965 100 $1,296,000 $12,413 100 $1,241,250 -4%


…And Let Physicians & Hospitals Decide How They Should Be Paid

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150 100 $15,000 105%

Non-Surg.Tx

Management $239 50 $11,950 $500 65 $32,500 172%

Phys. Therapy $390 50 $19,500 $750 65 $48,750 150%

Subtotal $31,450 $81,250 158%

Surgeon $1,655 50 $82,750 $2,500 35 $87,500 +6%

Hospital Pmt

Fixed Costs $14,100 60% $705,000 $705,000 0%

Variable Costs $8,225 35% $411,250 $287,875 -30%

Margin $1,175 5% $58,750 $64,625 +10%

Subtotal $23,500 50 $1,175,000 35 $1,057,500 -10%

Total Pmt/Cost $12,965 100 $1,296,000 $12,413 100 $1,241,250 -4%


Condition-Based Payment PutsProviders in Charge of Care

CURRENT FUTURE


Primary Care

Evaluations $73 100 $7,300 $150 100 $15,000 105%

Non-Surg.Tx

Management $239 50 $11,950 $500 65 $32,500 172%

Phys. Therapy $390 50 $19,500 $750 65 $48,750 150%

Subtotal $31,450 $81,250 158%

Surgeon $1,655 50 $82,750 $2,500 35 $87,500 +6%

Hospital Pmt

Fixed Costs $14,100 60% $705,000 $705,000 0%

Variable Costs $8,225 35% $411,250 $287,875 -30%

Margin $1,175 5% $58,750 $64,625 +10%

Subtotal $23,500 50 $1,175,000 35 $1,057,500 -10%

Total Pmt/Cost $12,965 100 $1,296,000 $12,413 100 $1,241,250 -4%


Patients Differ in Their Need for Surgery

LOWER-RISK PATIENTS HIGHER-RISK PATIENTS

# Pts # Pts

Primary Care

Evaluations 50 50

Non-Surg.Tx

Management 40 25

Phys. Therapy 40 25

Surgery 10 25

20% Need Surgery 50% Need Surgery


Stratify Condition-Based Payment Based on Patient Needs

LOWER-RISK PATIENTS HIGHER-RISK PATIENTS

$/Patient # Pts Total $ $/Patient # Pts Total $

Primary Care

Evaluations $150 50 $7,500 $150 50 $7,500

Non-Surg.Tx

Management $500 40 $20,000 $500 25 $12,500

Phys. Therapy $750 40 $30,000 $750 25 $18,750

Subtotal $50,000 $31,250

Surgeon $2,500 10 $25,000 $2,500 25 $62,500

Hospital Pmt

Fixed Costs $141,000 $564,000

Variable Costs $8,225 $82,250 $205,625

Margin $12,925 $51,700

Subtotal 10 $236,175 25 $821,325

Total Pmt/Cost $6,374 50 $318,675 $18,452 50 $922,575


Should Physicians Fear the Risks of Accountable Payment Models?

Risks Under Payment Reform•Will the bundled payment be adequate to cover the services patients need?

•Will risk adjustment be adequate to control for differences in need?

•How will you control the costs of other providers involved in the care in the bundled payment?

•What portion of payments will be withheld based on quality measures?

•Will you have enough patients to cover the costs of managing the new payment?


It’s Not More Risk Than Today, It’s Just Different Risk

Risks Under FFS•Will fee levels from payers be adequate to cover the costs of delivering services?

•What utilization controls will payers impose on your services?

•What “value-based” reductions will be made in your payments based on “efficiency” measures?

•What “value-based” reductions will be made in your fees based on quality measures?

•Will you have enough patients to cover your practice expenses?

Risks Under Payment Reform•Will the bundled payment be adequate to cover the services patients need?

•Will risk adjustment be adequate to control for differences in need?

•How will you control the costs of other providers involved in the care in the bundled payment?

•What portion of payments will be withheld based on quality measures?

•Will you have enough patients to cover the costs of managing the new payment?


Paths to the Future: Which Payment System Will You Choose?

FFS PAYMENT WITHP4P BONUSES &

PENALTIES

ALTERNATIVEPAYMENT MODELS

MACRA(SGR

RepealLaw)


Only Alternative Payment Models Allow Win-Win-Win-Win Solutions


PENALTIES

ALTERNATIVEPAYMENT MODELS

MACRA(SGR

RepealLaw)


Not Every Alternative PaymentModel is a Good Payment System


PENALTIES

PAYER DESIGNEDALTERNATIVE

PAYMENT MODELS

PHYSICIAN-LEDALTERNATIVE

PAYMENT MODELS

MACRA(SGR

RepealLaw)


Physicians Need to Take the LeadIn Redesigning Care and Payment


PENALTIES

PAYER DESIGNEDALTERNATIVE

PAYMENT MODELS

PHYSICIAN-LEDALTERNATIVE

PAYMENT MODELS

MACRA(SGR

RepealLaw)


Many Specialties Now Workingon Alternative Payment Models

Psychiatry

OB/GYN

OrthopedicSurgery

Opportunitiesto Improve Care

and Reduce Cost

Barriers inCurrent

Payment System

Solutions viaAccountable

Payment Models

• Reduce infectionsand complications

• Use less expensivepost-acute carefollowing surgery

• Reduce ER visitsand admissions forpatients withdepression andchronic disease

• Reduce use ofelective C-sections

• Reduce earlydeliveries and use of NICU

• Similar/lower payment forvaginal deliveries

• Condition-basedpaymentfor total cost ofdelivery in low-riskpregnancy

• Episode paymentfor hospital andpost-acute carecosts withwarranty

• No flexibility toincrease inpatientservices to reducecomplications &post-acute care

• Joint condition-based payment to PCP andpsychiatrist

• No payment forphone consults with PCPs

• No payment forRN care managers

Cardiology

• Use less invasiveand expensiveprocedures when appropriate

• Condition-basedpayment coveringCABG, PCI, or medicationmanagement

• Payment is basedon which procedure is used,not the outcomefor the patient


Examples from Other Specialties

Oncology

Radiology

Gastroenterology

Opportunitiesto Improve Care

and Reduce Cost

Barriers inCurrent

Payment System

Solutions viaAccountable

Payment Models

• Reduce unnecessarycolonoscopies andcolon cancer

• Reduce ER/admits forinflammatory bowel d.

• Reduce ER visitsand admissions fordehydration

• Reduce anti-emeticdrug costs

• Reduce use of high-cost imaging

• Improve diagnosticspeed & accuracy

• Low payment forreading images &penalty for 2x

• Inability to changeinapprop. orders

• Global paymentfor imaging costs

• Partnership in condition-basedpayments

• Population-basedpayment for coloncancer screening

• Condition-based pmtfor IBD

• No flexibility to focusextra resources onhighest-risk patients

• No flexibility to spendmore on care mgt

• Condition-basedpayment includingnon-oncolytic Rxand ED/hospitalutilization

• No flexibility tospend more onpreventive care

• Payment based onoffice visits, notoutcomes

Neurology

• Avoid unnecessaryhospitalizations forepilepsy patients

• Reduce strokes andheart attacks after TIA

• Condition-basedpayment for epilepsy

• Episode or condition-based payment forTIA

• No flexibility tospend more onpreventive care

• No payment tocoordinate w/ cardio


How Does All This Fit Into ACOs?


Patients Have Many Healthcare Needs

Heart Disease

Diabetes

Back Pain

PATIENTS

Pregnancy


Each Patient Should Choose & Use a Primary Care Practice…

Heart Disease

Diabetes

Back Pain

PATIENTS

Pregnancy

Primary Care Practice


MEDICARE, MEDICAID HEALTH PLAN

…Which Takes Accountability for What PCPs Can Control/Influence

Heart Disease

Diabetes

Back Pain

PATIENTS

Pregnancy


AccountableMedical

Home Accountability for:• Avoidable ER Visits•Avoidable Hospitalizations•Unnecessary Tests•Unnecessary Referrals



…With a Medical Neighborhoodto Consult With on Complex Cases

Heart Disease

Diabetes

Back Pain

PATIENTS

Pregnancy


AccountableMedical

Home

Endocrinology,Cardiology,Physiatry

AccountableMedicalNeighborhood

Accountability for:•Unnecessary Tests•Unnecessary Referrals•Co-Managed Outcomes



..And Specialists Accountable for the Conditions They Manage

Heart Disease

Diabetes

Back Pain

PATIENTS

Pregnancy


Neurosurg.PMR Group

OB/GYNGroup

CardiologyGroup

Heart Episode/Condition Pmt

Back SurgeryEpisode Pmt

PregnancyCondition Pmt

AccountableMedical

Home


Accountability for:•Unnecessary Tests•Unnecessary Procedures• Infections, Complications




That’s Building the ACOfrom the Bottom Up

Heart Disease

Diabetes

Back Pain

PATIENTS

Pregnancy


CardiologyGroup

Heart Episode/Condition Pmt

AccountableMedical

Home


ACO

Accountable PaymentModels

OB/GYNGroup



Neurosurg.PMR Group




Shared SavingsPayment

Primary Care

ACO

Orthopedics OB/GYNCardiology

Most ACOs TodayAren’t Truly Reinventing Care

Heart Disease

Diabetes

Back Pain

PATIENTS

Pregnancy

Fee-for-ServicePayment

Expensive IT Systems

PMR

Nurse Care Managers

Share ofShared SavingsPayment??



A True ACO Can Take a Global Payment And Make It Work

Heart Disease

Diabetes

Back Pain

PATIENTS

Pregnancy


ACOCardiology

GroupHeart Episode/Condition Pmt

AccountableMedical

Home

Risk-AdjustedGlobal Payment


OB/GYNGroup



Neurosurg.PMR Group



You Don’t Need a Big Health System to Manage Global Payment

• Independent PCPs & Specialists Managing Global Payments– Northwest Physicians Network (NPN) in Tacoma, WA is an IPA with 109 PCPs

and 345 specialists in 165 practices (average size: 2.4 MDs/practice). NPN accepts full or partial risk capitation contracts, operates its own Medicare Advantage plan, and does third party administration for self-insured businesses. www.npnwa.net

– North Texas Specialty Physicians, a 600 physician multi-specialty IPA in Fort Worth, set up its own Medicare Advantage PPO plan and uses revenues from the health plan and capitation contracts to pay its PCPs 250% of Medicare rates and provides high quality, coordinated care to patients. www.ntsp.com

• Joint Contracting by MDs & Hospitals for Global Payments– The Mount Auburn Cambridge IPA (MACIPA) and Mount Auburn Hospital jointly

contract with three major Boston-area health plans for full-risk capitation. The IPA is independent of the hospital; they coordinate care with each other without any formal legal structure. www.macipa.com

http://www.npnwa.net/

http://www.phpmcs.com/

http://www.macipa.com/


Three Paths to the Future: Which Will Physiatrists Choose?

TODAY



MODELS

PHYSICIAN-DESIGNEDCARE DELIVERY &

PAYMENT SYSTEMS


If You Want Door #3,What Should You Do?



1. Continue listening to PowerPoint presentations at AAPMR 2015, go back home, continue business as usual, and hope somebody else figures this out




2. Plan to retire before 2019




2. Plan to retire before 2019

3. Tell AAPM&R leadership that physician-driven payment reform is a top priority and you want to help


Learn More About Win-Win-WinPayment and Delivery Reform

www.PaymentReform.org

http://www.paymentreform.org/

For More Information:

Harold D. MillerPresident and CEO

Center for Healthcare Quality and Payment Reform

[email protected]

(412) 803-3650

www.CHQPR.org

www.PaymentReform.org

vbp, mips, apms, and acos: where do physiatrists fit? creating a successful practice under...

Documents

payment reform

healthcare quality

short quizquestion

pay cut

health care

key employees

health insurance adminprofit

medicare sgr