The Future Impact of the Patient Protection and Affordable Care Act on Post Acute and Long Term Care

VAMDA – 2014Verna Sellers, MD, Medical DirectorGeriatric Services and Centra PACE

Lynchburg, Virginia

Speaker Disclosures:

Dr. Sellers has disclosed that she has no relevant financial relationship(s).

Learning Objectives

• Explain the essential components of the 9 titles in the PPACA

• Discuss the goals of PPACA and the implications for Long Term Care

• Identify strategies for medical directors, physicians and other long term care professionals to navigate new wave of healthcare reform utilizing lessons learned from capitated programs

• Describe the Medical Director’s role in maintaining the financial solvency of the nursing Facility.

Drivers for Change: Healthcare Delivery System Reaches Financial Tipping Point

[The HI fund fails the test of short-range financial adequacy, as projected assets drop below one year’s projected expenditures early in 2011]

[The fund also continues to fail the long-range test of close actuarial balance. Medicare’s HI Trust Fund is expected to pay out more in hospital benefits and other expenditures than it receives in income in all future years. The projected date of HI Trust Fund exhaustion is 2024, five years earlier than estimated in last year’s report]

From 2011 Social Security & Medicare Board of Trustees Annual Report…

Source: http://www.ssa.gov/oact/TRSUM/index.html

MedicareMedicare & Social Security Income & Cost Rates

As a % of taxable payroll

The majority of our healthcare dollars are spent on healing as opposed to prevention

The Patient Protection & Affordable Care ActQuality, Affordable Healthcare for All Americans * Health insurance coverage, Federal & State exchanges

The Role of Public Programs * Medicaid Expansion

Improving the Quality & Efficiency of Healthcare * Value-based purchasing, Physician Quality Reporting Initiative, CMS Innovation Center - ACOs, Bundled Payments, Readmission Penalties

Prevention of Chronic Disease & Improving Public Health * Creates Intra-agency Council w/ Specific Funding, School-based Health Clinics, Improved Access for Preventive Care

Healthcare Workforce * Creates Workforce Commission, State Grants for Workforce Development, RN/MD Student Loan Enhancements

Transparency & Integrity Program * Fraud & Abuse

Improving Access to Innovative Medical Therapies * Biologics changes and Enhanced 340B Drug Pricing Access

Community Living Assistance Services & Supports * Establishes an Affordable Federal Long Term Care Insurance Plan

Revenue Provisions * Cadillac Health Plan Tax, New Industry-Specific Federal Fees (taxes), New Taxes on Medical Devices & Cosmetic Proc.

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Innovate

Necessity is the Mother of Invention: Time for Innovation

Next 5 – 10 Years

What is Accountable Care? A New Delivery Model?

Patient Centered

Preventive Emphasis

Coordinated Care

Chronic Disease Focused

Major Risk Shift from Payor to

Provider

Capitated Payments

Predictive Modeling

Information Systems: H.I.E.

9

• 1970 New model• 1983 PMPM• 1986 Replication?• 1990 Waivers• 1994 11 PO in 9 states• 1997 BBA • 2000 PACE Expansion• 2006 Rural Expansion• 2007 42 PO in 22 states• 2013 98 PO in 31 states

http://www.chqpr.org/accountablecareorganizations.html

Major Investments in Information Technology:Investing in the exchange of health information and

targeted care management

Health Coaches or Care Managers monitor near

time patient data

Accesses various care levels for more

immediate preventive care

Home & Ambulatory

Care

Transitional Care

Inpatient Care

A New Set of Core Competencies Will Be Required for Provider

Success

Financial Strength and Capital Capacity

Payer Relationship Management

Risk Management

Market Essentiality

Physician Integration

Care Coordination/ Management Infrastructure

Information Technology

Sophistication

Service Delivery System

Rationalization

Cost Effectiveness

Post Acute-LTC

12

VHA Inc. Confidential Information 13

Integration Attributes Key Characteristics of the Best Prepared

Physician/ Hospital Integration

A highly aligned medical staff characterized by shared goals, outcomes-based contractual arrangements, significant planning input, and adequately represented in organizational governance

Care Coordination/ Management Capability

Use of care coordination tools and processes by an empowered and integrated workforce to meet performance goals that are regularly measured and reported

Information Systems Sophistication

An IT platform that supports clinical decision making, information management, facile communications, and access by all stakeholders (physicians, patients, administration) to proper treatment and strategic decision making

Service Distribution System Effectiveness

A rational service distribution system that has accessible primary care and easy access (both physically and through referrals) across the care continuum, delivered in contemporary facilities with contemporary equipment

Cost Structure Management

A right-sized organization-wide cost structure, highlighted by appropriate levels of staffing, capital spending, overhead support, and supply chain costs; constantly reviewed based on comparative peer group studies and benchmarks

Scale and Market Essentiality

Sufficient scale to attract competitive clinical and administrative talent, realize economies, drive marketplace innovation, and be an essential provider to health plans and patients

Brand Identification Well recognized and respected, associated with high quality and service excellence

Payer Relationships/ Contracts

Maintaining strong relationships with payers and the ability to negotiate support for “new era” business practices

Financial Strength/ Capital Capacity

Strong appeal to capital markets through sustained operations, revenue growth, and balance sheet strength

A New Set of Core Competencies Will Be Required for Provider Success

Medicare's bundled payment program overtakes its ACO models

“More than 450 health care organizations in February joined four CMS bundled payment initiatives, seeking to determine whether paying lump sums for episodes of care will lower health care costs without harming care.”

Medicare Bundled PaymentsFrom The Advisory Board, December 23, 2013

Rep. Diane Black (R-Tenn.) and Rep. Richard Neal (D-Mass.) proposed legislation that would expand bundled payments within the Medicare program.

450 Bundled Payment

Plans

62 Hospitals Participating in CMS' Advanced Bundled Payment Model

In Model 4, hospitals agree to an upfront price on the specific DRGs, and CMS pays that specific bundled price to the hospital, which then pays other physicians and caretakers. In essence, Model 4 is the epitome of what bundled payments are to be in the future.

From Becker’s Hospital Review, January 6, 2014Becker’s Hospital Review, December 20, 2013

CINs are a way for hospitals and physicians to work together in managing the health of a population of patients. They are networks of hospitals or health systems and providers that collaborate to develop and sustain clinical initiatives within the CIN. Participants use evidence-based guidelines and share data and patient information in order to coordinate and manage care efficiently. Additionally, the ability to contract as one network with a payer is important for CINs.

Clinically Integrated NetworksFrom Becker’s Hospital Review,

September 13, 2013

Becker’s Hospital Review Article Link:http://www.beckershospitalreview.com/hospital-physician-relationships/9-keys-for-hospitals-building-effective-clinically-integrated-networks.html

Care Transformation -Financing & Care Delivery Must Evolve Together

Global Capitation

Episodic or Bundled

Payments

Basic Fee-for-Services

Am

ou

nt

of

Paym

en

t A

t R

isk

Care Delivery Transformation – System Maturity

Pay For Performance

Arrangements

Care Delivery Transformation

FutureEmergence of the Triple

Aim1. Improve the health of the overall population2. Focus on the experience of

care: * Safe * Effective * Timely * * Efficient * Patient Centered * * Equitable3. At the lowest per-capita cost

Care Navigators

Community-based delivery systems

Information Techology

PASTMaximize Utilization –

Fee For ServiceFragmented care delivery

Limited electronic patient data

Competing financial incentives between providers

Financial rewards for higher utilization

Focus on sick care (recovery)

Right Place at the Right Time?

A Focus on Preventive Medicine and Acute Care AvoidanceAc

uity

Cost of Care

Home monitoring

& Home Care

Patient Centered Medical Home

Urgent Care

Emergency Care

Transitional Care

Centra - A regional not for profit integrated health system serving communities in central Virginia

Acute Care• 3 acute care facilities• 650 licensed beds• 125,000 annual ER visits• 160 employed physicians• 450 active medical staff• 7,000 employees• Level 2 trauma center• Clinical leadership in all major service lines

Post Acute Care

Long Term Acute Care Hsptl

Inpatient Rehab Facility

Palliative Care &

Inpatient Hospice

Free Standing

Skilled Nursing Facilities

Home Health & Hospice Services

P.A.C.E.

Senior Living

Facilities

Emergency Mental Health

InpatientChild/Adol

AdultGeriatric

Residential Treatment:Child/Adol

Chemical Dep

Rivermont Schools

Outpatient Psychiatric

Services

Moving to Value Based Care

Centra’s 2013 Capitated or At-Risk Populations

• Centra Employees & Dependents

• Medicare 30-Day Readmission Penalties: CHF, MI, Pneumonia

• CMMI Bundle II: CHF, Elective Hip/Knee Replacement

• PCHP Medicare Advantage Plan

• Inpatient Medicaid & Indigent Patients

• Commercial payor P$P models

• P.A.C.E. – Lynchburg & Farmville

• Hospice – Lynchburg & Farmville

Self Insured - $30 Mill - 8,500 lives

Penalty Avoidance - $600k – 1,500 lives

Modified Capitation – 900 lives

Modified Capitation – 900/2700 lives

Cost Avoidance – 3,000 lives

Shared Savings

Full Capitation – 200 lives

Modified Capitation – 350 lives

Financial Mechanisms

Episode Cost by Setting by DRG

Hospital = Lynchburg General Hospital

Episode Start Range = 01JUL2008 to 30JUN2009

Exclusions = Partners

Episode Length = 90 Days

Participants = Hospital Only

Condition = Heart Failure

 

Condition = Heart Failure Setting

Item Statistic TotalIndexHosp.

AcuteHosp.

Readm.RehabHosp.

LongTermHosp. SNF

HomeHealth Other

                 

Total 1. Mean Cost ($) 16,378 6,357 3,443 30 273 3,597 1,161 1,517

                   

Bundled Payments

CMS Initiative 2011Quality Assurance and Process Improvement (QAPI)

• The Patient Protection and Affordable Care Act (ACA) • Many provisions for which CMS is responsible for

implementing.• Survey and Certification Group – Section 6102• Establishment of standards relating to quality assurance

and process improvement.• Purpose of program is to strengthen current

requirements and promote accountability for resident care and safety by nursing facilities.

Multiple Payment Reform Initiatives Point Towards…

Health Systems are building functionality that will reduce acute care admissions

• NCQA Patient Centered Medical Homes• Chronic Disease Clinics• System Care Navigators• Home monitoring

New payment models incentivize hospitals to reduce patient utilization in higher cost settings

Acute Care

LTACH

Inpatient Rehab

Skilled Nursing Fac

Home Health

Assisted Living

Primary Care

$ COST $

PA-LTC Implications

• Who’s patient is it? Multiple providers with differing patient agendas…CIN or hospital-based care management may interfere with SNF medical director.

• SNFs need to take patients directly from ED, earlier from inpatient hospital, keep them a shorter time in SNF, while reducing readmission %.

• MD/SNF contracting with local CIN and/or hospital for triple aim based care models

• SNF MD…how to touch more patients?

What are the Potential SNF Plays?

30-90 DayAvoidable

Readmissions

• Understand your own 30-90 day readmission history • Meet with your health system(s) to understand their readmission issues• Consider co-developing clinical pathways with both referring health systems and quality home care providers• Expand your scope of knowledge beyond SNF discharge• Consider opening a second front door

SNF Avoidance or Shorter SNF

LOS

Increased Transition

ManagementPotentially Avoidable

Admissions

#1 SNF

Hospital Admissions

Non-Acute Admissions

References

1. The Patient Protection and Affordable Care Act, 2012 Accessed at http://www.gpo.gov/fdsys/pkg/BILLS-111hr3590enr/pdf/BILLS-111hr3590enr.pdf

2. McClellan M, McKethan AN, Lewis JL, et al. A national strategy to put accountable care into practice. Health Aff (Millwood). 2010;29:982–990

3. Helton MR, Cohen LW, Zimmerman S, van der Steen JT. Reply to the Letter to the Editor by Bellelli JAMDA - June 2011 (Vol. 12, Issue 5, Page 388, DOI: 10.1016/j.jamda.2011.03.003)

Thank you