Value-Based Payment: Overview and Models · 2018-08-22 · 3 Today’s Presenters Rob Houston Associate Director, Payment Reform Center for Health Care Strategies [email protected]

Advancinginnovationsinhealthcaredeliveryforlow-incomeAmericans

www.chcs.org|@CHCShealth

Value-Based Payment: Overview and Models

PopulationHealthLearningNetworkAugust23,201812PM–1PMPT

About the Center for Health Care Strategies

Anon-profitpolicycenterdedicatedtoimprovingthehealthoflow-incomeAmericans

2

3

Today’s Presenters

RobHoustonAssociateDirector,[email protected]

GregHoweSeniorProgramOfficerCenterforHealthCareStrategiesghowe@chcs.org

DawnPlestedChiefOperatingOfficerFederallyQualifiedHealthCenterUrbanHealthNetwork(FUHN)[email protected]

Bytheendofthiswebinaryouwillhaveanswerstothefollowingquestions:¡ WhatisValue-BasedPayment(VBP)?¡ HowcanVBPhelphealthcentersinCalifornia?

4

Agenda



What is Value-Based Payment?

5

¡ Whichofthefollowingwouldyouassociatewith“Value-BasedPayment?”» Bundledpaymentsandglobalbudgets» Awayoflinkingpaymenttoquality,notquantity» Agrowingnationalinitiativetocontrolcosts» Sharedsavings/losses» Alloftheabove

6

Polling Question #1

7

¡ Majorityofreimbursementforhealthcareservicesisfee-for-service(FFS)

» Encouragestheprovisionofmoreservices,socostsincreaseandmore,notnecessarilybetter,careisgiven

» Limitsservicestothoseassociatedwithaspecificbillingcode

» Continuesfragmentation–nooneisaccountablefororpaidtocoordinatecare,sonoonedoes

» Lackofintegration–everyproviderisanisland!

We Pay For Transactions, Not Outcomes QUALITY

QUANTITY

¡ ValueBasedPayment(VBP)-Broadsetofperformance-basedpaymentstrategiesthatlinkfinancialincentivestoproviders’performanceonasetofdefinedmeasuresofqualityand/orcostorresourceuse

¡ VBPGoals

What is Value Based Payment and why do we need it?

IMPROVEQUALITYANDOUTCOMES

LOWERCOSTS

IMPROVEPATIENTEXPERIENCE

8

9

¡ ManydeliverysystemreformsareconfusedasVBPmodels,buttheseareseparatethings» AVBPmodelcanbepartofadeliverysystemreformeffort

¡ Thingsoftencalled“VBPmodels”thatarenot:» ManagedCareOrganizations

» AccountableCareOrganizations» PatientCenteredMedicalHomes

What VBP is not…

10

LevelofFinan

cialRisk

DegreeofCareProviderIntegrationandAccountability

PayforPerformance

SharedSavings/Risk

MedicaidpaymentmodelsspanthefullVBPcontinuum

ProspectivePayments

Value-Based Payment Continuum

11

¡ AlternativePaymentModels(APMs)aredesignedtomoveawayfromfee-for-serviceandtowardVBP» Alignsproviderpaymentwithpatientoutcomes,performanceofevidence-basedprocesses,andpatientexperience

» Incentivizescostreduction¡ APMsrequirehealthcareproviderstotakeonsomeformoffinancialrisk» “UpsideRisk”–Ifsavingsareachieved,providersreceiveapercentageofsavings» “DownsideRisk”–Ifsavingsareachieved,providersreceiveapercentageofsavings,ifcostsincrease,providersneedtopayaportionofthose“losses”

» “FullRisk”–Providersareaccountableforcostandquality,andifsavingsorlossesoccur,theybearallfinancialriskforthoseoutcomes

Alternative Payment Models

12

HCP LAN Alternative Payment Model Framework

CATEGORY 1FEE-FOR-SERVICE-

NOLINKTOQUALITYANDVALUE

CATEGORY 2FEE-FOR-SERVICE–LINKTOQUALITY

ANDVALUE

CATEGORY 3APMSBUILTONFEE-FOR-SERVICEARCHITECTURE

CATEGORY 4POPULATION-BASED

PAYMENT

A A A

FoundationalPaymentsforInfrastructureandOperations(e.g.,carecoordinationfeesandpaymentsforHITinvestments)

APMswithSharedSavings(e.g.,sharedsavingswith

upsideriskonly)

Condition-SpecificPopulation-BasedPayment(e.g.,permemberpermonth

payments,paymentsforspecialtyservices,suchasoncologyor

mentalhealth)

B B B

Pay-for-Reporting(e.g.,bonusesforreportingdataorpenaltiesfornotreportingdata)

APMswithSharedSavings

andDownsideRisk(e.g.,episode-basedpayment

forproceduresandcomprehensivepaymentwithupsideand

downsiderisk)

ComprehensivePopulations-BasedPayment(e.g.,globalbudgetsorfull/percent

ofpremiumpayments)

C C

Pay-for-Performance(e.g.,bonusesforquality

performance)

IntegratedFinanceandDeliverySystem

(e.g.,globalbudgetsorfull/percentofpremiumpaymentsin

integratedsystems)

3NRisk-BasedPaymentNOTLinkedtoQuality

4NCapitatedPaymentsNOTlinkedtoQuality

Source:AlternativePaymentModel(APM)Framework:Refreshfor2017.TheMITRECorporation.2017.Availableat:http://hcp-lan.org/workproducts/apm-refresh-whitepaper-final.pdf.

Pay-for-Performance(P4P)» Tiesproviderpaymentdirectlytospecificindicatorsofqualityorefficiency

13

The Four Most Common VBP Approaches

BundledPayments» Abundledpaymentforasetofservicesthatoccurovertimeandacrosssettings

SharedSavings/Risk» Providersthatsucceedinkeepingcostsbelowatotalcostofcarebenchmarkkeepapercentageofthesavings

Capitation/GlobalPayments» Providersreceiveanupfrontpermemberpermonth(PMPM)paymenttocoverawiderangeofservices

Pay-for-Performance(P4P)» VariousMCPandIPAP4PPrograms

» UDSQualityImprovementAwards

14

Examples of VBP Approaches

BundledPayments» BundledPaymentsforCareImprovement(BCPI)

SharedSavings/Risk» ProposedFQHCAPMPilot

» PRIME–AttachmentR

» Merit-basedIncentivePaymentSystem(MIPS)

» MedicareSharedSavingsProgram

» CPC+

Capitation/GlobalPayments» PRIME–AttachmentR

» GlobalPaymentProgram

15

¡ Tiesproviderpaymentdirectlytospecificindicatorsofqualityorefficiency

¡ Rewards» Providersreceiveabonuspaymentformeasurableperformanceinquality,patientsatisfaction,resourceuse,and/orcost(e.g.,hospitalreadmissionsfromnursinghomes)

¡ Penalties» Providersreceiveawithhold/clawbackofpaymentbasedonperformance

» Providersreceivelowerpayments,ornopayments,foreventsandproceduresthatareharmfulandavoidable

Pay-for-Performance (P4P)

16

¡ ClinicalEpisodePayment:Abundledpaymentforasetofservicesthatoccurovertimeandacrosssettings*» Thispaymentmodelcanbefocusedon:

� asetting(suchasahospitalorhospitalstay)

� aprocedure(suchasknee/hipreplacement)

� acondition(suchasdiabetes)

» Incentivizesefficiencyandcoordinationofcareacrossproviderstooffercareatorbelowthepaymentlevel� Paymentiscontingentonqualityperformance

» Paymentcanbemaderetrospectivelyorprospectively

Bundled Payments

*Source:DefinitionfromHCP-LAN:https://hcp-lan.org/resources/glossary/

17

¡ Providersthatsucceedinkeepingcostsbelowatotalcostofcarebenchmarkkeepapercentageofthesavings» Incentivizesactivities,suchascoordinationandeffectivecaremanagementacrossallservices,tolowerthetotalcostofcare

» Paymentreceivedretrospectively,contingentuponamountofsavingsandqualityperformance

» Utilizedprimarilyinaccountablecareorganizations(ACOs)� ButincreasinglybeingexploredinPCMH,healthhomes,andsuper-utilizerinitiatives

Shared Savings/Risk

18

Shared Savings/Risk Chart

ProjectedExpenditures

10%belowprojection

QualityTargets

Cost

Time

10%aboveprojection

SharedLossesArea

SharedSavingsArea

AdaptedfromDepartmentofVermontHealthAccessGraph

19

¡ Providersreceiveanupfrontpermemberpermonth(PMPM)paymenttocoverawiderangeofservices» Providersbearfullfinancialriskforservices» Accesstoupfrontfundingtoinvestincarecoordination,qualityimprovement,andefficiencyacrossthefullcontinuumofcare

» UsedwithadvancedACOs,hospitals,andmulti-specialtyprovidergroups

Global or Capitated Payments

¡ Whichofthefollowingpaymentmodelsareyoucurrentlyparticipatingin?» Pay-for-performance» Bundledpayments» Sharedsavings/risk» Globalpayments» Notsure

20

Polling Question #2

21

Any Questions?



How can VBP Help Health Centers in California?

22

¡ ProspectivePaymentSystem(PPS)–for“medically-necessaryprimaryhealthservicesandqualifiedpreventivehealthservicesfurnishedbyanFQHCpractitioner.”» Paidbytheencounterwithstatewraparoundpayment

¡ Straightforwardandpredictablewaytobepaid,butdoesnotcovereverything» “Medically-necessaryprimaryhealthservices”and“qualifiedpreventivehealthservices”» Furnishedbyan“FQHCPractitioner”» Onlydeliveredatcertainlocations

¡ Thoughcertainexemptionshavebeenmadefortelehealthandcaremanagementservices,theseservicesarelimitedandapprovalcameslowly

23

PPS Rates

Source:https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/FQHCPPS/Index.html

¡ Whatactivitiesareyourhealthcentercurrentlyperformingthatarenotbeingreimbursed?(pleaseselectallthatapply)» Groupvisits» Multiplevisitsononeday» Visitsatotherlocations» Servicesprovidedbyindividualsthatarenotconsidered”FQHCpractitioners”underPPS(e.g.,Communityhealthworkers)

» InnovativeservicesorinterventionsthatarenotreimbursableunderPPSorMCOcontracts

» Innovativeservicesorinterventionsthatarecurrentlygrantfunded

24

Polling Question #3:

¡ VBPcanhelpFQHCs:» MitigatethelimitationsofPPS

� Fundservicesbeyond“medically-necessaryprimaryhealthservices”and”qualifiedpreventivehealthservices”

� Payforservicesfurnishedbysomeoneotherthanan”FQHCPractitioner”� Delivercareatanylocation

» Alignpaymentwithgoodcare» Fundinnovativepilotprograms» Achievesustainabilityforinterventionscurrentlyfundedbygrants

25

How can VBP Help FQHCs?

¡ MoneysavedunderaVBParrangementisusuallyflexible,andcanbeusedformanypurposes» P4Pbonuses» Sharedsavingspayments» Savingsunderabundledpaymentorcapitatedrate

¡ Healthcareorganizationshaveusedmoneytopayfor:» ITInfrastructureanddataanalysisimprovement» Supportiveandpermanenthousing,airconditioners,andhomeasthmaremediationforpatients

» Communityhealthworkersandcaremanagementteams» Innovativepilotprogramsandinterventions

26

“Slush Funds”

¡ WhileFQHCscantakeon“upsiderisk”inP4Pandsharedsavingsarrangements,FQHCscannottake“downsiderisk”onpaymentsthatincludePPS(sharedrisk,capitation)» (E.g.,TheCaliforniaFQHCAPMPilot…)

¡ However,therearepotentialwaysanFQHCcouldparticipateindownsideriskifitwantsto(usuallyhavegreater“upside”potential)» Downsideriskonnon-PPSservices» PaymentsabovePPS» EnteringintoaVBParrangementwithapartnerthatcanacceptdownsiderisk» EnteringintoapaymentarrangementwithanMCO

�  Paymentmustbeatamountsnotlessthanpaymentmadetonon-FQHCprovidersforsimilarservices27

One Important Note

28

¡ IntegratedHealthPartnerships(IHPs)» MedicaidACOmodel» Begun2013aspartofstatelegislation» PerformanceassessedbasedonTCOCtarget&32qualitymeasures,withpossibilityforsharedsavings/risk� Flexibilityforsmallerproviderstoparticipateinupsideriskonly

¡ Results» $213Msavingstostate,2013-2016» 14%reductioninhospitalstays,7%reductioninEDvisits» 460,000+peopleserved» Participationincreasedfrom6IHPsin2013to24IHPsin2018

Shared Savings/Risk Example: Minnesota

29

Shared Savings/Risk: Minnesota ¡ IHP2.0» Launched2018forthree-yearperiod» Changesbasedonfeedbackfromproviders,plans,community» Addedquarterlypopulation-basedpayment(PBP)tosupportcarecoordination&infrastructureneeds;adjustsforsocialriskfactors

» Includestwotrackstoaccommodatediverseprovidersystems� Track1:risk-adjustedquarterlyPBPtiedtohealthequity,performanceandutilizationmetrics(noriskforsmall,independentproviders)

� Track2:risk-adjustedquarterlyPBPandTCOCtwo-wayriskmodelforsharedsavings/lossestiedtoSDOHscreening&healthequitymetrics

» Standardizedqualitymeasures,tobefinalizedDec.2018� Nomorethan6statewidemeasuresforsinglespecialtypractices(10formultispecialty)

Shared Savings/Risk Example: Minnesota

30

Any Questions?

FUHN’sJourney:MNDHS’sIntegratedHealthPartnership

DawnPlested,FACHE,MBA,FUHNCOO

8/22/18

31

31

Topics• OverviewofFUHNandtheDHSMedicaidProgram• Whywedidwhatwedid• Theresultswe’veachieved• Wherewearetoday• Whereweareheading

8/22/18

32

WhatisFUHN?

FederallyQualifiedHealthCenterUrbanHealthNetwork•  Collaborativepartnershipof10TwinCitiesFederallyQualifiedHealth

Centers(FQHC);including40uniqueprimarycareclinicsites.•  Nation’sfirstFQHC-onlySafetyNetMedicaidAccountableCareOrganization

(ACO);righthereinMinnesota!

8/22/18

33

FUHN/DHSIHPProjectOverview•  FUHN’s10memberhealthcentersareworkingtogetherwithMNDepartmentofHumanServices(DHS)onMedicaidhealthcarereformtofurtherenhancethehealthcareprovidedtoourMedicaidpatientsthroughValueBasedPurchasing.

•  TheoverallgoaloftheprojectistodemonstrateFUHN’sabilityaccomplishtheTripleAimPlusOne•  ReduceenrolleeTotalCostOfCare•  ImprovingClinicalQuality•  ImprovethePatientExperience•  ImprovePRIMARYCAREACCESSforvulnerablepopulations

8/22/18

34

FUHN/DHSIHPProjectOverview(cont.)

Ø MNDHSIHPProgramhasachievedremarkableresultsoverit’sfiveyearsofoperation.25IHPACO’slikeFUHNachieved:•  Programsavingsofanestimated$1BinMedicaidProgramcosts.

•  CoveredalmosthalfamillionMedicaidEnrollees;50percentofallMAEnrollees.

•  DramaticreductionsinHospitalServiceutilization.

8/22/18

35

BackgroundoftheFUHN/DHSIHP•  MNHealthReformLegislationallowedforACOMedicaidDemonstration•  FUHNvieweddemonstrationas•  Opportunity-leverageresources,fostercollaboration,learntogether

•  Threat-survivalinaquicklyreforminghealthenvironment•  QuestionforeachFQHC:JoinlargersystemstogainaccesstoresourcesORtakealeapoffaithtotransformourclinicalpractice•  FQHCMission•  10independentFQHCBoards’support(51%patients)drivingtowardsincreasedcollaborationandefficacies

8/22/18

36

WhydidtheFQHC'schoosetoparticipateinthisMedicaidACOProject?

8/22/18

37

•  AcceleratingHealthPaymentReformCost-basedReimbursement ↓

Value-basedReimbursement(VBP)

•  Holdingprimarycareprovidersaccountableforapatient’stotalcostofcare,patientsatisfactionandquality;bothinandoutsideofaclinic’sfourwalls.

•  ACA/ExpandedMACoverage/MNSure 37

WhydidtheFQHC'schoosetoparticipateinthisMedicaidACOProject?cont…

•  HealthReformistakingshape:OurClinicsneededtocompleteasignificantoperationaltransformationinordertoberelevantinthisnewenvironment.

•  FQHCcouldtakechargeforthefirsttimeever;FUHNdecidedwecouldshapechangesorbeshapedbythem.

•  FQHC’sarethemodelforthispopulation:Healthreformtrendsplaceimportanceonprimarycarehealthcarehomesthatfocusonthehealthofpatientsandaddresssocialdeterminants.

•  Wewereill-preparedtobesuccessfulinthisnewenvironment.TheprivateHealthSystemsstartedthisactivity10yearsago.

8/22/18

38

WhereareWeToday? TheoverallgoalofthecontractistodemonstrateFUHN’sabilityto

accomplishtheTripleAimPlusOne:1.   ReduceenrolleeTotalCostOfCare(TCOC)(forallmedicalservices-

notjusttheservicesprovidedbytheprimarycareprovider)2.   ImproveClinicalQuality.3.   ImprovethePatientExperience.4.   ImprovePrimaryCareAccessforthesevulnerablepopulations.•  Wearebetterpositionednowtooperateinthisnew,value-basedenvironment.

“Fiercecompetitorstoextremecollaborators”

8/22/18

39

FUHNResults:Attribution

•  2013:23,849

•  2017:31,799–33%increase•  Medicaidexpansion•  Movefrom12monthsto24monthsattributionperiod

•  Thisrepresentsroughly55%oftheMApatientpopulationservedbyour10FUHNMemberClinics(remaining45%didnotmeeteligibilityatenrollmenttime)

8/22/18

40

41

-200

0

200

400

600

800

1000

1200

1400

1600

1800

2000

CUHCC IHB NACC NHS OpenCities People'sCenter

Southside UnitedFamily Axis WestSide FUHNOverall

FUHNTrendDecember2103ClaimsthroughDecember2016Claims

EDVisits/1000Members

Dec2013Claims(Apr2014CMR)

Dec2014Claims(April2015CMR)



%overallChange

FUHNOverall952

893 773 734 -23%FQ




Dec2016Claims(April2017CMR) %overallChange

FUHNResults:EDutilizationreductiongraph2013-2016

42

-20

0

20

40

60

80

100

120

140

160

CUHCC IHB NACC NHS OpenCities People'sCenter Southside UnitedFamily Axis WestSide FUHNOverall

FUHNTrendDecember2103ClaimsthroughDecember2016Claims

IPVisits/1000Members





%overallChange

FUHNOverall81

77 68 70 -14%FQ




Dec2016Claims(April2017CMR) %overallChange

FUHNResults:Inpatientadmissionsreductiongraph2013-2016

HealthInformationTechnologyInitiative•  FUHN,usingalmost$1.5MgrantsreceivedthroughMDH,DHSandtheBPHC,isbuildingthedataanalyticsinfrastructureandcapabilityneededtomanageVBParrangements.

•  Adatawarehousethatwillreceiverealtimedatafeedsfrom:•  FQHC’sEMRclinicaldata•  Payerclaimsdata•  Availableadmit,dischargeandtransferdataprovidedbyselectedhospitalcarepartners

•  ArobustdatareportingandanalyticscapabilitiesforusebyourCareCoordinators.•  Futuregainsavingsareexpectedtosustainablyfundtheongoingoperatingcostswiththisnewinfrastructure.

8/22/18

43

SustainabilityThroughFederalGrant

•  InAugust2016FUHNwasinformedthatitwasoneof51HRSAGrantRecipientsforHealthCenterControlledNetworks.

•  Thisthree-year,$1.5MGrantawardprovidesFUHNanditsmembersfundingtocontinueourorganizationaltransformationtovalue-basedpurchasing.

•  WillhelpFUHNClinicsfundtheautomationofdatareportingobligationsfromourannualFederalUniformDataSystem,StateMNCMSubmissionsandVBPReportingobligations.

8/22/18

44

InordertotoreallydiveintoVBAs,certainstructuresareoftendeveloped:ACPs/CINs.Inordertocreateafunctionalintegratedstructure,clinicsmust:•  Developaseparatelegalunit(usuallyalimitedliabilitycompany)•  Gainculturalbuy-in•  Strategicpartners•  Firmbusinessplan•  EffectiveCINgovernancestructure•  RobustITinfrastructure•  Capitalandoperationalfinancing•  Understandingcontracting(Pricingandnegotiatingbundledpayments,capitationrates,andevenhealthplanpremiumswillnecessitatethatCINsacquireactuarial,claimstracking,claimspayment,costaccountingandcaremanagementandutilizationreview)

•  Implementingmarketingandbusinessdevelopment

StartinganACO/IHP

45

8/22/18

CurrentandFutureChallenges

•  Abilityofclinicstocontinuetoworktogether•  Clinicalresourcesandcapabilities•  Lackofinfrastructure•  Lackofcapital•  Lackofbeingclinicallyintegrated•  Legalcompliancechallenges•  Lackofphysiciantophysiciancollegiality• Marketdemand 46

Questions??

8/22/18

47

¡ WhatarepracticalnextstepsyoucantaketoexploreVBPModels?» Createinventoryofyourhealthcenters’existingVBPpaymentmodels

» LearningmoreaboutVBPmodelsofinterestandhowtheycanbesetup» SpeakingwithMCOsaboutVBPpaymentarrangements

¡ AdditionalhelpavailablefromCHCS» Additionalwebinar(Fall2018)» Coachinghelp(Fall2018)» Presentationduringnextin-personmeeting(January2019)» Technicalassistanceopportunities(Spring2019)

48

What’s Next?

Documents

Value-Based Payment: Overview and Models · 2018-08-22 · 3 Today’s Presenters Rob Houston Associate Director, Payment Reform Center for Health Care Strategies [email protected]