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experience support //
CPAs & ADVISORS
NAVIGATING PAYMENT BUNDLES AND MACRA WITH ACTIONABLE DATA
Andy Williams CPA Partner
Eric Rogers MEd.RT(R) Senior Managing Consultant
DISRUPTION AND INNOVATION: DATA
Health care policy update
Data analytics and bundled payments
MACRA
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Agenda
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Health Care Policy Update
• ACA: “Repeal-Delay-Replace”
• Sec. Health and Human Services Rep. Tom Price
• CMS Innovation Center
• ACOs
• Bundles
• CPC+
• Innovation models
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Health Care Policy Update
ACA Program
Payment &
Quality
• Bundled Payments: BPCI, CJR and EPM
• Shared Savings
• Value-Based Purchasing
• Readmissions Reduction Program
• Hospital-Acquired Condition Reduction
Delivery • ACOs
Coverage• Medicaid Expansion
• Health Insurance Exchange
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• Launched over 30 new payment models in six years
• Estimated 18 million patients impacted/received care through new payment models
• Invested in EMR and data analytics infrastructure
• More than 30% of FFS payments tied to value in 2016. On track for 50% by 2018.
• Partnered with Medicare, Medicaid and commercial payors to develop value-based models of care
• State Innovation Models and global payment arrangements: Maryland and Vermont
• Developing MACRA proposed/final rule
• $34 Billion spending reduction per CBO
CMMI Accomplishments
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Bundled Payment Popularity
Source: CMMI Website
0
200
400
600
800
1000
1200
ACOInvestment
Model
ACOAdvancedPayment
ACO ESRD ACO NextGen
ACONursing
Home VBP
ACOPioneer
ACO RHC BPCI 2 BPCI 3 CJR EPMs OncologyBundle
Comp.Primary
Care Init.
InnovationAwards
Participants in CMMI Payment Models
Bundling works but requires several key capabilities
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Data Analytics and Bundled Payments
1. Data governance and analytics
2. Activated steering team3. Post-acute partners4. Physician engagement
Case Study Baptist Health System, San Antonio TX
JAMA January 2017
• 3,942 Medicare patients• Reduced episode spending by 21% • Reduced readmissions and ED visits by
1.4%• Reduced ALOS• Reduced implant costs 29%• Reduced PAC spending 27%
Episodes are triggered by hospitalizations of eligible Medicare FFS beneficiaries discharged with diagnoses:
MS-DRG 469: Major joint replacement or reattachment of lower extremity with major complications or comorbidities
MS-DRG 470: Major joint replacement or reattachment of lower extremity without major complications or comorbidities
Episodes include: Hospitalization and 90 days post-discharge
All Part A and Part B services, with the
exception of certain excluded services that
are clinically unrelated to the episode
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Episode Definition: General
EPISODE DEFINITION: SERVICESIncluded
• Physician services• IP hospitalization (including readmissions)• IP Psych Facility• LTCH• IRF• SNF• Home Health • Hospital OP services• Independent OP therapy• Clinical lab• DME• Part B drugs• Hospice• *Fraudulent and billing errors
Excluded• Acute clinical conditions not arising
from existing episode-related chronic clinical conditions or complications of the LEJR surgery
• Chronic conditions that are generally not affected by the LEJR procedure or post-surgical care
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• Retrospective, two-sided risk model with hospitals bearing financial responsibility
Providers and suppliers continue to be paid via Medicare FFS
In Year 2, actual episode spending will be compared to episode target prices• If in aggregate target prices are greater than spending, hospital
may receive reconciliation payment
• If in aggregate target prices are less than spending, hospitals would be responsible for making a payment to Medicare
PAYMENT AND PRICING: RISK STRUCTURE
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CMS intends to establish target prices for each participant hospital prior to start of each performance period
Includes 3% discount to serve as Medicare’s savings
Based on blend of hospital-specific and regional episode data, transitioning to regional pricing.
Essentially competing against yourself in the beginning
PAYMENT AND PRICING: TARGET PRICE
2/3 hospital
1/3 regional
Year 1 & 2 1/3 hospital
2/3 regional
Year 3 100%
regional
Year 4 & 5
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$36,644
$52,144
$21,141
$38,582
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
DRG 469 non-fracture DRG 469 fracture DRG 470 non-fracture DRG 470 fracture
PACIFIC REGION: MEAN EPISODE PAYMENTS
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QUALITY POINTS
THA/TKA Complications
HCAHPS Survey
≥ 90th 10.00 8.00
≥ 80th and < 90th 9.25 7.40
≥ 70th and < 80th 8.50 6.80
≥ 60th and < 70th 7.75 6.20
≥ 50th and < 60th 7.00 5.60
≥ 40th and < 50th 6.25 5.00
≥ 30th and < 40th 5.50 4.40
<30th 0.00 0.00
3 Decile Improvement 1.00 0.80
THA/TKA Voluntary PRO and Limited Risk Variable Data
Yes 2.00
No 0.00
Total Points
14.1
Poor: < 6.03% discount
Good: 6.0 – 13.22% discount
Excellent: >13.21.5% discount
• Consistent with applicable law, participating hospitals might have certain financial arrangements with Collaborators to support their efforts to improve quality and reduce costs.
• Collaborators may include: Physician and non-physician practitioners
Home health agencies
SNF
LTCH
Physician group practices
IRF
Inpatient and Outpatient PTs and OTs
FINANCIAL ARRANGEMENTS: GAINSHARING
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Data will be shared to evaluate practice patterns, redesign care delivery pathways and improve care coordination.
Hospitals can request to obtain beneficiary-level Part A and B claims for the duration of the episode in summary format, raw claims line feeds, or both.
Data would be available for the hospital’s baseline period and on a quarterly basis during the performance period.
Aggregate regional claims data for MS-DRG 469 and 470 would also be shared
Hospitals must request data in order to receive it
DATA SHARING
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Data Analytics
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Descriptive Analytics
What happened?
Reporting dashboards
Diagnostic Analytics
Why did it happen?
Ad-hoc query data mining
Predictive Analytics
What will happen?
Statistics planning
Prescriptive Analytics
What should happen?
Simulation optimization
Data Analytics: Improving Insight and Business Value
Horizon Difficulty
Val
ue
Importance of beneficiary-level claims analytics
• Identification and management of outlier episodes
• Physician alignment
• Post-acute care collaborator identification and accountability
• Review of current discharge trends
• Establishing benchmarks and best practices
• Coding and documentation
• Predicting payments from historical data
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DATA ANALYTICS
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DATA ANALYTICS: OUTLIER MANAGEMENT
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MANAGING RISK
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
Inpatient Outpatient IP Rehab/Read Home Health SNF Physician DME
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EPISODE PAYMENT DISTRIBUTION
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0
20
40
60
80
100
120
140
160
0-60 61-65 66-70 71-75 76-80 81-85 85-90 91-95
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
Pati
ent
Vo
lum
e b
y A
ge
Med
icar
e’s
Epis
od
e Pa
ymen
tsSPENDING BY AGE
$34,690
$17,658
$26,186
$8,916
$17,481
$2,632
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FIRST DISCHARGE SETTING: DRG 470
HH SNF IRF
Home, 9.5%
Hospital, 0.5%
SNF, 57.3%
Other, 0.5%
HHA, 30.8%
Hospice, 0.5%
Inpatient Rehab, 0.9%
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IATROGENIC RISK
Discharged Home/Home Health Discharged SNF/ IRF
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GEOGRAPHIC MAPPING
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EPM: THE “CARDIAC BUNDLE”
Key Components
• Episode definitions• CABG• AMI/PCI
• Transfer rules• Target Price with automatic 3%
discount• Retrospective reconciliation for hospital• Quality requirements• Gainsharing opportunities• Regulatory waivers• Cardiac rehab incentive payment
system• SHFFT DRGs 480, 481, 482• Cardiac rehab incentives
MSA SELECTION
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CJR and SHFFT MSAs
AMI and CABG MSAs
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EPM: THE “CARDIAC BUNDLE”
Key Components• Selection criteria (98 MSAs)
• Episode definition• CABG
• AMI/PCI
• Transfer rules
• Target Price with automatic 3% discount
• Retrospective reconciliation for hospital
• Quality requirements
• Gainsharing opportunities
• Regulatory waivers
• Cardiac rehab incentive payment system
• ACI: Advancing Care Information
• APM: Alternative Payment Model
• CMS: Centers for Medicare & Medicaid Services
• FFS: Fee-for-Service
• EC: Eligible Clinicians (provider subject to MACRA)
• CPIA: Clinical Improvement Activities (also known as IA or Improvement Activities)
• MACRA: Medicare Access and CHIP Reauthorization Act of 2015
• MIPS: Merit-Based Incentive Payment System
• MIPS APM: Qualify for preferential MIPS Scoring but not considered Advanced APMs
• MU: Meaningful Use
• PQP: Partial Qualifying APM Participant
• PMPM: Per Member Per Month
• QP: Qualifying APM Participant
• VBPM: Value-Based Payment Modifier
• NPI: National Provider Identifier
• CAHPS: Consumer Assessment of Healthcare Providers and Systems
• PQRS: Physician Quality Reporting System
• QRURs: Quality and Resource Use Reports
• QIO: Quality Improvement Organization
MACRANYMS
• Repeals Sustainable Growth Rate (SGR) and ends “doc fix”• Phases out Medicare payment adjustments under current physician reporting
programs: Physician Quality Reporting System (PQRS) Physician Value-Based Modifier Program (VBM) Medicare physician Meaningful Use (MU)
• Requires CMS to develop & implement a complex system for measuring, reporting & scoring the value & quality of care via two separate clinician participation tracks
• Very small percentage of eligible clinicians exempted from system• Performance period started January 1st and impacts payment in 2019• Enacted with bipartisan support
WHY MACRA IS IMPORTANT
Advanced Alternative Payment Models (APMs)
Merit-based Incentive Payment System (MIPS)
• Payments for cost & quality performance built on FFS structure
• 5% Bonus in 2019-2024• Exempts from MIPS Reporting• Payment & Patient thresholds• Requires downside risk, quality & CEHRT• 70,000 – 120,000 clinicians will qualify in
year 1(1)
OR
• Fee-for-Service with performance-based adjustment applied to future Medicare Part B Payments
• Consolidates physician reporting programs into one
• Performance measured against peers• Stakes gradually rise over time• Most clinicians will participate in year 1 ~
500,000 – 645,000(1)
Most eligible clinicians should assume they fall in the MIPS track which looks and feels similar to current Medicare physician reporting programs in terms of reporting and impact on future reimbursement.
(1) Per CMS estimates of eligible APM and MIPS clinicians found in MACRA final rule
NEW PHYSICIAN QUALITY REPORTING PROGRAM
Yes No
Am I in an APM?
Yes No
Am I in an eligible APM?
Do I have enough payments or patients
through my eligible APM?
Yes No
Qualifying
APM
Participant
YesNo
Patients:
20% APM
80% FFS
Payments:
25% APM
75% FFS
≤ $30,000 in Medicare
Part B allowed charges
OR
≤ 100 Medicare patients
Is it my first year in
Medicare or am I below the
low-volume threshold?
Low-volume threshold:
Subject to MIPS:
MIPS APM
• Subject to MIPS
• Favorable scoring
under MIPS APM
scoring standard
Not subject to
MIPS
Do I qualify as a Partial QP?
Yes No
Do you voluntarily elect
to report MIPS?
No Yes
Not subject to MIPS
Patients:
10% APM
90% FFS
Payments:
20% APM
80% FFS
*See Appendix 1 for MIPS APM scoring
APM DETERMINIATION IS COMPLEX
Max MPFS Base Rate Adj
2017 2018 2019 2020 2021 2022 +
0.5% Update 0.0% Update
APM 5% annual bonus
2026+APM: 0.75%MIPS: 0.25%
-4.0% -5.0% -7.0%-9.0%
12%15%
21%27%
Fee Schedule Update
Budget Neutral Scaling factor 3x
REIMBURSEMENT IMPLICATIONS: WHAT’S AT RISK
Quality(60%)
Resource Use(0%)
Advancing Care
Information(15%)
Improvement Activities
(25%)
• Replaces PQRS• Most participants report
6 measures, including 1 outcome
• Can receive partial credit• Bonus points available• Group Web Interface -
report 15 measures• MIPS APMs report
quality through APM
• Replaces VBPM cost component
• Included in 2018 performance year
• Based on claims data• 10 disease groups• Refining attribution
methodology
• Replaces MU• Moves away from “all
or nothing”• Base score attestation• Performance score• Reduced # of measures• Bonus points available• Certain exemptions• Can report as a group
• New category• >90 activities to choose
from• Report High or Medium
weighted activities• 90 consecutive days• Preferential scoring:
• PCMH full credit• Half credit for
MIPS APMS
Year 12017
Composite Performance Score (CPS)
*See Appendix 2, 3 and 4 for preferential scoring and small practice accommodations
MIPS OVERVIEW REFRESHER
Group Reporting
• Group that consists of a single TIN with ≥ 2 ECs (at least one MIPS EC) who have reassigned their billing rights to the TIN
• Group evaluated on all measures reported regardless of applicability to individual ECs
• Payment adjustments based on group performance
• All TIN measure data included, regardless of MIPS eligibility
• May report through: CMS Web Interface, CEHRT, a registry, or a QCDR
Individual Reporting
• A single MIPS eligible clinician
• Payment adjustments based on individual performance
• May report through:
CEHRT,
a registry,
a QCDR, or
May submit quality data through Medicare claims process
(1) Must report across all performance categories as an individual or a group(2) Do not have to declare group reporting to CMS unless reporting through
Web Interface (June 30th, 2017).
HOW TO SUBMIT MIPS DATA
• Revised low-volume threshold for MIPS exclusion Patients and Part B charge went from “both” to “either/or”
• Part B charges ≤ $10k to $30k
• Eliminated cost component weighting in 2017• Reduced some of reporting burden:
Quality – reduced percent of applicable patients CPIA – number of activities to report went from 6 to 4; 2 for small and rural practices ACI – reduced reporting from 11 to 5 measures; non-physicians may elect not to report
• Established minimum reporting requirements (“Pick your Pace”) to avoid penalties in first year
• Reopening application process for CPC+ and developing a new MSSP Track 1 program with downside risk (Track 1+)
KEY CHANGES IN FINAL RULE
MIPS “Pick Your Pace”
“Report Nothing” “Testing” “Partial Reporting” “Full MIPS
Reporting”)
4% penalty No negative
adjustment or
bonus
Small positive
adjustment
+
Potential bonus
Max potential
adjustment
+
Potential bonus
+
Potential
Exceptional Bonus
CMS is estimating 90% of eligible clinicians will receive a positive or neutral MIPS Adjustment for the 2017 Transition Year
2107: MIPS TRANSITION YEAR
Assess clinician eligibility
Begin to assess the eligibility of MIPS eligible clinicians under the Final Rule requirements by reviewing historical Medicare Part B payments and volumes
Assess current quality reporting performance
Develop understanding of quality reporting requirements
Begin to identify potential reporting metrics based on historical performance or area of specialty
• Access Medicare Quality and Resource Use Reports (QRURs) to identify improvement areas
Determine reporting strategy
Analysis to determine optimal reporting strategy based on specialty, quality outcome performance and MIPS status
Identify various reporting strategies to improve performance under MIPS
Identify future reporting strategy
Evaluate current infrastructure with regards to reporting under MIPS and identify what MACRAtrack is feasible for the organization/clinician in the future
Ensure that future reporting strategy aligns with organizations that will help improve quality and drive down costs
Stay informed
PREPARING FOR TRANSITION YEAR & BEYOND
• MACRA five-year reimbursement risk on stand-alone basis likely less than cost of infrastructure required to fully maximize reimbursement effect
• Efforts to maximize MACRA reimbursement effect could likely have opposite (& potentially more material) downstream reimbursement effects for various providers in FFS environment
• MIPS cost per attributed beneficiary & outcomes parameters create most significant infrastructure needs Similar to bundled payment initiatives needs (e.g., CJR), but much
more encompassing Similar to ACO initiative needs regarding identification & management
of attributed beneficiaries
• MACRA creates additional incentive for employed or independent physicians to actively partner with providers
STRATEGIC IMPLICATIONS
• Advanced APM eligibility is difficult so providers should assume MIPS track
• Organizations need the necessary infrastructure & expertise to manage data
reporting, care coordination & clinical outcomes before taking on payment
risk
• No cover for eligible clinicians (with exception of those exempt); unlikely to
see swaths of providers opting out of Medicare participation
• Will likely see more clinicians & group practices move toward ACOs over
time. It is crucial to understand your local market & develop potential
alignment strategies with independents
STRATEGIC IMPLICATIONS
THANK YOU
FOR MORE INFORMATION // For a complete list of our offices
and subsidiaries, visit bkd.com or contact:
Andy Williams CPA// [email protected] // 417.865.8701
Eric M. Rogers M.Ed. RT(R) // Managing [email protected] // 417.865.8701
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