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Wisconsin Health Care Association/Center for Assisted Living 65th Annual Fall Convention

The Emerging World of Value-Based PurchasingOctober 20, 2016

© 2016 Health Dimensions Group 1

© HDG 2016 October 20, 2016#LTCConnection

The Emerging World of Value-Based Purchasing Wisconsin Health Care Association/Center for Assisted Living 65th Annual Fall Convention

Brian Ellsworth, MA, Director, Payment TransformationHealth Dimensions Group@HDGConsulting

October 20, 2016

© HDG 2016 October 20, 2016#LTCConnection 1

Brian Ellsworth, MADirector, Payment Transformation

• Over 30 years of experience in Medicare & Medicaid policy, payment, and care delivery transformation, with an emphasis on care integration for the chronically ill

• Background includes provider, payer, and governmental policymaking roles

– Provider roles: American Hospital Association, CT Association for Home Care & Hospice (CEO), and LeadingAge NY

– Payer roles: NY Medicaid and Optum (UnitedHealth Group)

• Consulting clients include over 75 providers taking risk under Medicare’s Bundled Payments for Care Improvement (BPCI) initiative; advise providers and plans on value-based payment strategic positioning and transformation

• Thought leader and frequent presenter; served on numerous policy and technical advisory groups


“If you don't like the weather in New England now,just wait a few minutes.”

Attributed to Mark Twain…


Agenda for Today’s Presentation

3

Value-Based Purchasing Landscape

Alternative Payment Models

How Markets Will Transform


Value-based purchasing

refers to a broad set of

performance-based

payment strategies that link

financial incentives to

providers’ performance on a

set of defined measures

What Is Value-Based Purchasing?

ImprovedQuality

ImprovedQuality

LowerCostsLowerCosts

Value

Sometimes referred to as alternative payment models (APMs) or VBP


Value-Based Purchasing Links Quality and Risk on a Continuum

Fee-for-Service

Pay-for-Performance

Episodes of Care

Shared Savings

Shared Risk

Global Payments

No Financial Risk More Financial RiskNo

Qua

lity

Mea

sure

sP

aym

ent T

ied

to Q

ualit

y





Medicare Continues to March Towards Its Goals for Alternative Payment Models (APMs)

APM Goals for Medicare Fee-for-Service Program

2016 Goal Met in March

Source: CMS © HDG 2016 October 20, 2016#LTCConnection 7

• Centers for Medicare & Medicaid Services (CMS) Innovation Center is testing 25+ major payment & service delivery models and other initiatives under authority of Affordable Care Act

• Each model will be comprehensively evaluated and could be expanded if certified by the CMS Actuary to be effective at:

–Improving quality without increasing spending; or

–Reducing spending while maintaining quality of care

Alternative Payment & Service Models:Expansion Likely After Evaluation

Wholesale expansion of Medicare APMsdoes not require an Act of Congress


Physician Payment Rule (MACRA): Framework to Drive “Advanced APMs”

8

Provides automatic 5% lumpsum bonus to physicians who receive significant portion of their revenue from Advanced Alternative Payment Methods

Rewards or penalizes physicians by up to +/- 9%

depending on their Merit-based

Incentive Payment

System (MIPS)

Intent is drive physicians to value-based behavior through multiple pathways

OR


VBP participants must bear a certain amount of financial risk

What Are “Advanced” APMs?

• Minimum 4% of APM spending target Total RiskTotal Risk

• Minimum 30% spending above APM target for which Advanced APM entity is responsible Marginal RiskMarginal Risk

• Maximum 4% of amount by which spending can exceed APM benchmark before Advanced APM entity has responsibility for losses

Minimum Loss Rate

Minimum Loss Rate

Base payments on quality measures

Requires participants to use certified EHR technology


• Hospitals face reimbursement penalties (up to 3%) based on30-day readmission rates for 5 diagnostic categories

–Acute myocardial infarction (AMI); heart failure (HF); pneumonia (PN); COPD; elective total hips and knees and CABG

• In 2015, hospitals became subject to new adjustment based on Medicare Spending Per Beneficiary (MSPB) as part of Hospital Value-Based Purchasing (VBP) program

• Determine local hospital penaltiesfor these two issues and start a conversation about how you can help!

Value-Based Changes Already Underway:Medicare FFS Payments to Hospitals


• Final rule updates previously proposed all-cause readmissions with SNF 30-day Potentially Preventable Readmission Measure (PPRM)

• Measure would be risk-adjustedand calculated using full year of data

–Achievement threshold 20%*

–Benchmark threshold 16%*

• Rate adjustments will be funded by 2% withhold, with exact parameters for redistribution yet to be established

SNF Value-Based Payment: Law Requires Implementation by 2018

Implementation Year

Baseline Period 2015

Performance Period 2017

Affects Rates 2019

IMPROVEMENT versus ATTAINMENTare rewarded through a scoring methodology

*Approximate thresholds derived from proposed rule, subject to change





Bi-partisan statute enacted in 2014 requires:Bi-partisan statute enacted in 2014 requires:

• Development of uniform quality and resource measures

• Core set of assessment items across settings

• Detailed timelines and objectives

IMPACT Act is intended to facilitate:IMPACT Act is intended to facilitate:

• Interoperable, reusable core data set

• Creation of site-neutral payment policies

• Value-based payment approaches

• Improved care transitions and hospital discharge planning

IMPACT Act Drives Changes for Post-Acute: Value-Based Payments and Much More


SNF Quality Reporting Program (QRP):Three New Measures Proposed Starting in 2018*

All measures are derived from claims data in 2017 for FY 2018 payment determinations

*Drug regimen review coming in 2020

Discharge to communityDischarge to community

• Successful discharge to community with no unplanned readmission or death within 31 days of discharge from SNF

Medicare spending per beneficiary (MSPB)Medicare spending per beneficiary (MSPB)

• MSPB-PAC SNF measures episode of SNF care and associated services

Potentially preventable readmissionsPotentially preventable readmissions

• Risk adjusted potentially preventable unplanned readmissions within 30 days of SNF discharge


IMPACT Act of 2014 Ultimate Goal:Standardized, Interoperable, Reusable Data

Source: CMS, Understanding the IMPACT Act, Special Open Door Forum, February 2, 2016 © HDG 2016 October 20, 2016#LTCConnection 15

Medicaid Programs Are Diving into VBP:TN & AK Are Bundling Chronic Conditions

Source: Tennessee Division of Health Care Finance & Administration, Health Care Innovation Initiative, Health Care Payment Learning and Action Network Summit, October 26, 2015


NY’s Value-Based Payment Roadmap:Value-Based Payment + Managed Care

16

• New York State’s VBP Roadmap approved by CMS in July 2015:VBP goals will be embedded intoMedicaid managed care contracts

• Statewide goal: 80% to 90% ofMedicaid payments be captured in at least Level 1 VBPs in 5 years

–L1 means some linkage to quality with the opportunity for upside shared savings

• 35%–70% of total payments to be captured in Level 2+

–L2 means linkage to quality; with both upside & downside shared risk

• VBP Roadmap just completed its first annual update


Value-Based Payments:Require New Contracting Relationships

Source: VBP Bootcamp Series, Sessions 1-3, NYSDOH, 2016





Value-Based Payments:Require a Whole New Language

Risk adjustment

accounts for variation in

acuity

Efficiency & quality

adjustments account for

differences in starting points

Stimulus adjustment designed to

motivate increased risk

Source: NYS VBP Roadmap First Annual Update, Final Draft, March 2016 © HDG 2016 October 20, 2016#LTCConnection 19

Value-Based Payment Thrives on Scale: Which Can Be Challenging to Obtain

Risk aversion can drive down scale of VBP and lead to unintended vulnerability

Increasing VBP volume diversifies risk and makes it

easier to achieve critical mass


Importance of Achieving Scale in VBP: Do The Math!

20

Plan #1 = 20%

Plan #2 = 20%

Plan #3 = 20%

Plan #4 = 20%

Plan #5 = 20%

Provider #1 (10%)

Provider #2 (10%)

Provider #3 (10%)

Provider #4 (10%)

Provider #5 (10%)

Provider #6 (10%)

Provider #7 (10%)

Provider #8 (10%)

Provider #9 (10%)

Provider #10 (10%)

Suppose there are 5 plans contracting with 10 providers for care representing, in total, 10% of each plan’s spend…

In this example,

each provider

represents only 0.2% of

the plan’s spending

Math can be similar in urban versus rural environments© HDG 2016 October 20, 2016#LTCConnection

New Payment Models Demand New Capabilities

21

Delivery System Reform

Payment System Reform

Capabilities Required

for Success

Today 1–3 Years 3–5 Years

SettingSpecific

Silos

Early Attemptsat Care

Coordination

Population Health/

Wellness

Pay for Value/Risk

Pay for Performance

Volume-BasedFee for Service

Ability to deliver highest

quality at competitive

cost

Episodic care management

on a risk basis

Care coordination and quality outcomes

across select metrics

1

2


Value-Based Payment Creates Opportunities and Risks


Paralyzed by Confusion

Embracing the

Opportunities

Happily Existing in

Denial

Resigned to Acceptance

UnderstandingLower Greater

Greater

Lower

Resiliency

Now Is the Time to Embrace the Opportunities!

23





• Both a challenge and an opportunity

–High-performing providers will get in preferred networks based on quality and cost—others may get left out

–Providers must navigate transition risk

–Avoiding hospitalizations is a majorarea of opportunity

• Medicare has developed know-how and data infrastructure and will accelerate VBP implementation; other payers are already following suit

• Scale matters—certain markets will reach tipping point quicker than others due to interactive effect of payment initiatives and providers’ ability to scale their care redesign

Value-Based Payment Landscape Summary


Alternative Payment Methods

Fee-for-Service VBP

Episodic Payment

Accountable Care


Episodic Payment Models

Medicare Is Rapidly Expanding Mandatory and Voluntary Bundled Payments

Round 1 and 2 of Voluntary Bundled Payments (BPCI)

Mandatory Comprehensive

Joint Replacement (CJR)

Mandatory Hip & Femur (Proposed)

Mandatory Cardiac Episode Payment

(Proposed)

Round 3 Voluntary BPCI Coming for

2018


$0

$5

$10

$15

$20

$25

$30

$35

$40

2013 2015 2016 2018 2020 2022

Bil

lio

ns

2022 Goal: Minimum of 50% of Medicare Post-Acute Provider Payments Bundled

BPCI Voluntary

Pilot Began

Reduce Spend by -2.85%

Second Round of BPCI

Source: Budget of the United States Government, FY 2016; http://www.whitehouse.gov/omb/budget

Mandatory Geographic

Ortho Bundling

All Post-Acute Care Providers


How Medicare Episode Payment Works:Retrospective, Two-sided Risk

28

Episode Spending(less exclusions) Gain

Episode Spending(less exclusions) Loss

Episode Initiation Target Price

Reconciliation of target prices

to spending occurs after

episode is over


Risk TracksRisk Tracks

• Three risk tracks (A, B & C) that trade off between risk and opportunity

OutliersOutliers

• Process to mitigate effect of extreme cases (20% loss over upper threshold)

ExclusionsExclusions

• Method to factor out low-volume, high-cost events unrelated to care of the episode in question

Medicare’s Bundling Program Has Several Risk Mitigation Features

All 3 concepts are applied to base period and performance period





• “Clinical episodes” are selected from one of 48 possible diagnostic families that are triggered by anchor hospitalization

• Episodes are 30, 60, or 90 days in length and commence at “episode initiating” provider

• Base period target price (less 2%–3% discount) is compared to performance period expenditures on apples-to-apples basis after the fact

Bundled Payments for Care Improvement

Anchor Hospitalization Post-Acute Care End of Episode(30, 60, 90 days)

Model 2 (hospital or physician group)

Model 3 (post-acute or physician group)

Established as 3-year, voluntary demonstration programby Center for Medicare & Medicaid Innovation (CMMI)


68%

35% 34% 32%27%

58%

41%47%

39%36%

Major jointreplacement of the

lower extremity

Congestive heartfailure

Simple pneumoniaand respiratory

infections

Chronic obstructivepulmonary disease,bronchitis, asthma

Hip and femurprocedures except

major joint

Top 5 Clinical Episode Groups Selected for BPCI(out of 48 Possible )

Model 2 Model 3

Most Frequently Selected Clinical Episode Groups For Model 2 & 3 Bundled Payments

% o

f Aw

arde

es

Source: CMS Analytic File, October 13, 2015; CMS BPCI newsletter November 2015, Ed. 7


Model 2• Episode Integrated

Provider to Model 2 hospital or physician group practice (PGP), preferably with gainsharing

• Preferred Vendor to Model 2 hospital or PGP by accepting referrals and effectively managing care

Model 3 • BPCI Awardee

(accept risk, control gains)

• Episode Integrated Provider to Model 3 Awardee (e.g., SNF or HHA to Model 3 PGP)

• Preferred Vendor to Model 3 PGP or PAC (e.g., HHA to SNF)

Roles for Post-acute in Model 2 & 3 BPCI:Vendor or EIP Until Another Round Permitted

32 © HDG 2016 October 20, 2016#LTCConnection 33

3-Day Hospital Stay

Home Visits

Telemedicine

Gainsharing

Waiver Opportunities


214organizations

1,386organizations

Two Rounds of Voluntary Bundling:Despite Attrition, Significant Growth

Source: CMS BPCI Website, August 4, 2016

658 SNFs

360 Hospitals

262 Physician groups

97 HHAs

9 IRFs

2016

2013

Episode Initiators by Provider Type


Organization Name # DRGs Convener City

Meriter Hospital, Inc. 1 None given Madison

Golden LivingCenter - Heritage Square 16 Golden Living(GGNSC Administrative Services, LLC)

Greendale

Belmont Nursing and Rehab Center 6 Remedy BPCI Partners, LLC Madison

Waukesha Springs Health & Rehab Center 11 Remedy BPCI Partners, LLC Waukesha

Nazareth Health & Rehab Center 11 Remedy BPCI Partners, LLC Stoughton

Sunny Ridge Health & Rehab Center 23 Remedy BPCI Partners, LLC Sheboygan

Manitowoc Health & Rehab Center 25 Remedy BPCI Partners, LLC Manitowoc

Villa Pines Living Center 12 Remedy BPCI Partners, LLC Friendship

Geneva Lake Manor 12 Remedy BPCI Partners, LLC Lake Geneva

Holton Manor 7 Remedy BPCI Partners, LLC Elkhorn

Ingleside Manor 13 Remedy BPCI Partners, LLC Mt. Horeb

Montello Care Center 8 Remedy BPCI Partners, LLC Montello

Northern Lights Services 8 Remedy BPCI Partners, LLC Washburn

River Falls Healthcare, LLC 24 Remedy BPCI Partners, LLC River Falls

Oak Park Nursing and Rehab Center LLC 2 Mid-Atlantic Health Care Madison

15 BPCI Bundlers in Wisconsin

Source: CMS BPCI Initiative Episode Analytic File as of March 25, 2016

All Model 3 with exception of Meriter Hospital (Model 2)





Five-Year Program Went Live April 1, 2016

Mandatory Bundling Program: Comprehensive Care for Joint Replacement (CJR)

Mandatory demonstration, requiring participation from all inpatient PPS hospitals in 67 metropolitan regions

Mandatory Program

Hospitals must bear risk for hospital care and 90 days post-discharge for all related costs to joint replacement (MS-DRGs 469 & 470)

Hospitals Bear

Financial Risk

To qualify for realized savings, hospitals must meet specified quality measure performance targets

Shared Savings

Directly Tied to Quality Measures

Source: https://innovation.cms.gov/initiatives/cjr

Hip and femur fractures to be added

in July 2017


• Accomplished through creation of “composite” quality score, based on measure encompassing both joint replacement complications and patient satisfaction

• Gains are limited to only those hospitals that achieve minimum composite quality scores

• Additional incentive payments available for those hospitals with higher composite quality scores

Unlike BPCI, CJR Has Direct Linkage of Payment to Quality


• On July 25, 2016, CMS issued proposed rule to refine and expand the CJR model; proposed refinements include:

–Creation of a track whereby CJR will qualify as Advanced Alternative Payment Model (AAPM), and thus be of interest to physicians seeking AAPM bonus

–Changes to composite quality scoring approach to align with AAPM approach

• Expansion of CJR includes addition of surgical hip and femur fracture treatment procedures (SHFFT) to already mandatory joint replacement episodes (MS-DRGs 480-482)

–Expands program scope, creating more incentive for mandatory hospitals to develop an effective care redesign strategy

NEW Refinement & Expansion of CJR:Changes Would Apply to Existing 67 Regions


• Waukesha Memorial Hospital

• Columbia St. Mary’s Hospital Ozaukee

• Aurora Medical Center in Washington County

• Columbia St. Mary’s Hospital Milwaukee

• Oconomowoc Memorial Hospital

• St. Joseph’s Community Hospital of West Bend

• Wheaton Franciscan Healthcare-St. Francis

• Community Memorial Hospital

• Wheaton Franciscan-St. Joseph

• Aurora St. Luke’s Medical Center

• Aurora West Allis Medical Center

• Froedtert Memorial Lutheran Hospital

• Orthopaedic Hospital of Wisconsin

• Columbia Center

• Wheaton Franciscan Healthcare-Franklin

• Midwest Orthopedic Specialty Hospital

• Aurora Medical Center

• Aurora Medical Center

Milwaukee-Waukesha-West AllisMSA Hospitals in CJR

Source: http://proximityone.com/metros/2013/cbsa33340.htm, accessed April 12, 2016


Madison MSA Hospitals in CJR

• Monroe Clinic, The

• Divine Savior Healthcare

• St. Mary’s Hospital

• University of Wisconsin Hospitals & Clinics Authority

Source: http://proximityone.com/metros/2013/cbsa31540.htm, accessed April 12, 2016


First PAC Setting

Number of Episodes

Percent of Episodes

Readmissions Rate

Average Episode Payment

Percent Fracture

Community 1,781 24% 3% $16,731 1%

HHA 2,022 28% 6% $19,637 2%

IRF 355 5% 8% $36,138 30%

SNF 3,201 44% 12% $29,098 17%

Total 7,309 100% 8% $23,894 10%

A Joint Replacement Tale of Two Cities

First PAC Setting

Number of Episodes

Percent of Episodes

Readmissions Rate

Average Episode Payment

Percent Fracture

Community 65 5% — $17,138 —

HHA 589 48% 7% $21,379 2%

IRF 454 37% 14% $39,728 36%

SNF 112 5% 14% $40,137 38%

Total 1,220 100% 10% $29,703 18%

Milwaukee-Waukesha-West Allis, WI MSA

Beaumont, Texas MSA

Source: Dobson DaVanzo analysis of SAF, 2011 to 2014 claims data for AHHQI





• Increase discharges to home and/or outpatient therapy

• Develop tight relationship with preferred downstream providers

• Improve pre-operative care for elective cases

• Reduce costs of supplies (e.g., implants)

• For more complicated cases, or those lacking support at home, use SNFs with 7 day/week access to physicians; trained staff; and customer-friendly facilities

Joint Replacement Bundler Strategies

Source: Adapted from Ehrlich, Developing an Elective Joint Replacement Program, 2015 © HDG 2016 October 20, 2016#LTCConnection 43

Baseline Data

Euclid Hospital Results

Year 2013 2013 2014

Quarter Q1 Q4 Q1 Q2 Q3

Medicare A/B Patients* † 72* 65† 61† 66† 79†

Cauti Rate* 5.2 0 0 0 0

LOS* 3.40 2.90 2.67 2.87 3.01

Readmission* 5.0% 2.0% 1.6% 2.7% 2.0%

Discharge Disposition Home/HHC* 39% 71% 75% 70% 68%

Discharge Disposition SNF* 56% 28% 25% 30% 31%

HCAHPS Overall Rating* 73% 88% 78% 84% 85%

Results from a Mature Joint Replacement Bundling Program

Cleveland Clinic’s Experience Under Model 2 BPCI for Major Joint Lower Extremity

Sources: * Cleveland Clinic; † 2014 Q3 CMS Reconciliation Report 2058-002


Proposed Program to Start July 1, 2017

NEW Mandatory Bundling Program: Episode Payment for Heart Attacks & Bypass Surgery

Mandatory demonstration, requiring participation from all inpatient PPS hospitals in 98 randomly selected MSAs (out of 291 eligible)

Mandatory Program

Hospitals must bear risk for hospital care and 90 days post-discharge for all related costs to heart attacksand bypass surgery

Hospitals Bear Financial

Risk

To qualify for realized savings, hospitals must meet specifiedquality measure performancetargets

Shared Savings

Directly Tied to Quality Measures

Source: https://innovation.cms.gov/initiatives/cjr

Also includes incentive payments

for cardiac rehab


Comparison of Key Features Between Voluntary BPCI & Mandatory CJR/EPMs

Domain Voluntary BPCI Mandatory CJR/EPMs

Participation Voluntary for awardees Mandatory for hospitals

Scope Up to 48 MS-DRG families Specific DRGs

Length of bundle 30, 60, or 90 days 90 days

Target priceOwn historical data(2009–2012 trended)

Phase-in to trended regional prices

Reconciliation Quarterly Annual

Risk Immediate two-sided risk Phase-in two-sided risk

Quality linkage Indirect Potential for gains linked directly to quality scores

Waivers Certain waivers allowedCertain waivers allowed with model-specific tweaks


Model Three-day Qualifying Stay Permitted

Model 2 Voluntary BPCI Yes If majority of SNFs are 3 stars or higher

CJR – Joint Replacement Yes After 1/1/17 for 3-star SNFs only

CJR – Surgical Hip & Femur No Due to longer expected hospital LOS

EPM – AMI Yes After 4/1/18 for 3-star SNFs only

EPM – CABG No Due to longer expected hospital LOS

Example of Model-Specific Waivers:Three-day Qualifying Stay for SNF Coverage

Proposed rule states that 3-day waiver will be applied to future EPMs on case-by-case basis having to do with typical hospital LOS and when

the EPM is moving to downside risk


Proposed Rule Indicates Possibility to Voluntarily Take Direct Risk is Coming

47

“However, building on the BPCI initiative, the Innovation Center intends to implement a new voluntary bundled payment model for CY 2018 where the model(s) would be designed to meet the criteria to be an Advanced APM.”

Source: Page 78 of July 25, 2016 Display Copy of Advancing Care Coordination Notice of Proposed Rulemaking

Voluntary Bundling 2.0 likely to have greater linkage to quality and may use different episode triggering strategies





Learn by doing; force culture change

Understand markets through data

Improve quality through care redesign

Earn positive margins

Why Engage in Voluntary Bundling?


• Voluntary Bundled Payments for Care Improvement (BPCI)

– Initial sign-up in 2012; subsequent sign-up in 2014

• Mandatory Comprehensive Joint Replacement Model (CJR)

– Proposed July 2015; implemented in 67 markets April 1, 2016

– Proposal to add Surgical Hip & Femur Fracture Treatment (SHFFT) for July 2017 implementation

• Mandatory Advancing Care Coordination Proposed Rule

– Proposed July 2016 for implementation in 98 markets July 2017

– Two new mandatory cardiac bundles: heart attack and bypass surgery, now called Episode Payment Models (EPM)

– Cardiac rehab incentive payments

• Voluntary BPCI 2.0 intended for CY 2018

Medicare Episodic Payment Timeline


CA

AZ

NV

OR

MT

MN

NE

SD

ND

ID

WY

OK

KSCO

UT

TX

NM SC

FL

GAALMS

LA

AR

MO

IA

VA

TN

IN

KY

IL

MI

WV

WA

OH

PA

NY

VT

ME

CT

NJ

D.C.

WINH

MA

RI

DEMD

NC

AK

HI

464 Medicare ACOs Serving 48 States

Both MSSP and Next Generation ACOs (serving 9 states)

Both MSSP and Pioneer ACOs (serving 1 state)

MSSP, Pioneer, and Next Generation ACOs (serving 5 states)

MSSP ACOs (serving 48 states)

No Medicare ACOs (2 states)50Source: CMS.gov, January 2016 © HDG 2016 October 20, 2016#LTCConnection 51

• CMS announced 100 new Medicare Shared Savings Program (MSSP) ACOs for 2016(89 new in 2015)

–Total of 434 MSSP ACOs

–19 Next Generation ACOs (3 dropped out), with another round coming

• CMS also recently proposed further adjustments to ACO benchmarking methods, designed to move away from historical data to regional benchmarks

–Would reward historically efficient regions

• Physician-led ACOs appear to be more nimble

Continued Growth in Medicare ACOs:However, Only 5% Are at Two-sided Risk

22 MSSP ACOsnow acceptingtwo-sided risk,

up from 3 previously


• Narrowed network of PAC providers through thoughtful process, initially by using survey and then by monitoring metrics

–Achieved significant reductions in post-acute LOS and readmissions

– Improved family and patient satisfaction with discharge care

• ACO/PAC relationship more collaborative by focusing on:

–Customer service and transitions improvement

–Two-way communication using EMRs

–INTERACT and risk stratification protocols implementation

–Patient activation and health literacy improvement

• Acuity of referrals to institutional post-acute increasing

Case Study ACOs and Post-acute: Franciscan Alliance (Indiana)

52 © HDG 2016 October 20, 2016#LTCConnection 53

• Effective January 1, 2016, program targets long-term care residents in 113 Genesis facilities in 4 states (PA, NJ, MD, WV)

• Genesis expects to have 16,000 LTC residents (and some post-acute patients) attributed to the ACO based on obtaining plurality of primary care physician (PCP) visits while residents/patients are seen in the SNF

–Genesis Physician Services (GPS) providers make approximately 500,000 visits to their LTPAC patients annually, driving attribution

–Strategy will include after-hours visits, supplemented by telemedicine

First LTPAC-Sponsored Medicare ACO: Genesis HealthCare Dives In

Source: Genesis HealthCare website, accessed May 16, 2016





• Minimal commitment – no formal arrangement: ACO engages in awareness activities, informing physicians of services billed, historic utilization trends, how a physician compares to his or her peers, readmission rates, and average length of stay in a facility

• Conditional collaboration: PAC becomes a preferred provider by adhering to the ACO’s standards and protocols; share data and work together to prevent readmissions, decrease costs, and improve outcomes

• Partnership: ACO partners with network of select post-acute providers; the patient EHR is accessible by partners

• Financial and data integration: ACO-PAC partnerships include quality measures and shared risk

• System integration: ACO formally partners with post-acute providers, sharing risk/reward; integration allows care management teams and transition coordinators to access all patient data

Possible Arrangements with ACOs for Post-acute Care (PAC)

Source: Leavitt Partners © HDG 2016 October 20, 2016#LTCConnection 55

Medicare Advantage (MA)

penetration grew by more than 30% in the last 5 years

Most growth is concentrated in 15

states…48 counties that have more than

25,000 Medicare-eligible persons and

greater than 50% MA penetration:

Wisconsin is a high penetration state

Despite enrollment growth, MA remains

a “black box” to many providers due to small scale by a

specific plan for any given provider and

frequently non-competitive markets

Medicare Advantage Is Growing Nationally

Source: HDG analysis of CMS.gov files as February 2015

?


Wisconsin Medicare Advantage Penetration:Ten Counties at 50% or More

Source: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/index.html, accessed March 25, 2016

County %

Adams 24%

Ashland 30%

Barron 36%

Bayfield 33%

Brown 52%

Buffalo 15%

Burnett 34%

Calumet 62%

Chippewa 31%

Clark 46%

Columbia 29%

Crawford 31%

Dane 24%

Dodge 36%

Door 27%

Douglas 40%

Dunn 30%

Eau Claire 30%

County %

Florence 26%

Fond du Lac 48%

Forest 31%

Grant 44%

Green 17%

Green Lake 52%

Iowa 34%

Iron 39%

Jackson 34%

Jefferson 29%

Juneau 19%

Kenosha 25%

Kewaunee 49%

La Crosse 39%

Lafayette 34%

Langlade 41%

Lincoln 39%

Manitowoc 43%

County %

Marathon 45%

Marinette 37%

Marquette 32%

Menominee 25%

Milwaukee 43%

Monroe 27%

Oconto 52%

Oneida 32%

Outagamie 59%

Ozaukee 38%

Pepin 13%

Pierce 41%

Polk 41%

Portage 40%

Price 35%

Racine 37%

Richland 12%

Rock 32%

County %

Rusk 37%

St. Croix 42%

Sauk 37%

Sawyer 30%

Shawano 56%

Sheboygan 42%

Taylor 43%

Trempealeau 31%

Vernon 46%

Vilas 30%

Walworth 21%

Washburn 35%

Washington 39%

Waukesha 39%

Waupaca 52%

Waushara 50%

Winnebago 55%

Wood 50%


Engaging Medicare Advantage plans with alternative payment approaches will become increasingly common

• Value-Based Insurance Design (VBID): September 1, 2015, CMS announced that MA plans in 7 states* will be offered flexibility in benefit design (reduce cost sharing or offer extra benefits) so beneficiaries with certain chronic conditions can be incentivized to pursue high-value treatments

• As MA penetration grows, plans will increasingly copy value-based payment initiatives

–Medicare Advantage plans accorded significant payment flexibility under federal law

–Special Needs Plans (SNPs) likely to be early adopters of VBP

Medicare Advantage Plans May Become Next Frontier for VBP

57

*Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee


I-SNP A

• Waives 3-day prior hospital stay and treats the resulting skilled stay as a Part A stay

• Pays reduced rate for Part A stay according to 4 rate tiers

• Inserts nurse practitioners into facility

• Provides quality incentive payments and upside shared savings

I-SNP B

• Waives 3-day hospital stay, but authorizes limited Part A days

• Pays PPS rates and has Intensive Service per diemadd-on

• Does not provide nurse practitioners, but pays administrative fee for additional chronic care management, credentialing, quality activities

• Shares higher percentage of savings; also requires facility to share in losses

Example of Medicare Institutional Special Needs Plans (I-SNPs) Value-Based Contracting


14 States Pursuing Initiatives to Integrate Care for Medicare & Medicaid

CA

AZ

NV

OR

MT

MN

NE

SD

ND

ID

WY

OK

KSCO

UT

TX

NMSC

FL

GAALMS

LA

AR

MO

IA

VA

TN

IN

KY

IL

MI

WV

WA

OH

PA

NY

VT

ME

CT

NJ

D.C.

WINH

MA

RI

DEMD

NC

AK

HI

Source: Cms.gov and Nasuad.org, January 2016

Capitated model only, MOU signed (10)

MFFS model, MOU signed (2)

MFFS model, No MOU signed (2)

Not pursuing FAD59





How Markets Will Transform

Care Redesign

Narrow Networks

Gainsharing

Achieving Scale in VBP


Care Redesign Strategies

• Transitions management: acute, post-acute, and community

• Coordination with primary and specialty care

• Readmissions prevention

• Risk stratification

• Patient activation, teaching, and self-care

• Medication reconciliation

• Telehealth

Effective Care Redesign Is Essential

Care Redesign

Gain and Risk Sharing

Quality and Performance Management

Data Sharing Supports All Activities and Exchanges

Reinforces

Informs

Source: Centers for Medicare and Medicaid Services. (2011). Contracting for Bundled Payment. Washington, DC.


VBP Likely To Shift Referral Behavior:Mainly a Question of How Long It Will Take

Source: Clinically Appropriate and Cost Effective Placement, Final Report, Dobson DaVanzo, 2012

Comparison of first PAC setting after hospitalization totheoretically most appropriate and cost effective


VBP Will Increase Acuity At All Levels:Which makes Risk Adjustment Important

63

Before VBP After VBP

Patients% of

Patients

90-day Readmissions

Rate

% of Patients

90-day Readmissions

Rate

Percent Change

Readmits

Low Acuity 70% 14% 30% 11% -25%

High Acuity 30% 30% 70% 23% -25%

Provider Total 19% 19% —

Hypothetical Example of a Provider’s Readmissions Rates Before & After Widespread Implementation of VBP

25% Improvement in performance overshadowed by shift to higher acuity patients


• Hospitals participating in bundling, ACOs, and other VBP, along with managed care plans, will continue to seek to utilize preferred or narrow networks

• Preferred provider selection process often includes:

–Five-Star quality rating

–Readmission rate

–Medical director

–Stability of management team

–Depth and breadth of clinical capabilities

–Patient satisfaction

Preferred Networks Will Continue to Form:Especially in Markets with Excess Capacity


2014

• OIG proposed rule change

2015

• Some changes made in Physician Fix (MACRA) legislation

2016

• Likely gainsharing regulation rewrite by OIG

Next Stop in VBP Transformation:Increased Gainsharing Possible

October 3, 2014, Federal Register

• Gainsharing is currently executed through case-by-case review or waivers of fraud, waste & abuse laws

• So far, most gainsharing activity is limited to hospitals and physicians

• Policy on gainsharing is rapidly evolving asalternate payment approaches flourish and may become more widespreadas rules are clarified





Gainsharing Rules Have Not Caught Up With VBP Transformation

• Policy on gainsharing is rapidly evolving as alternate payment approaches flourish

–OIG proposed rule changes in 2014

–Some changes were made in 2015 MACRA “physician fix” legislation

–Likely to see regulation rewrite at some point

• In general, gainsharing arrangements must:–Have strong quality component, preferably

using evidence-based guidelines

–Not be created to directly or indirectlyinduce referrals

–Not harm the beneficiary

66

October 3, 2014 Federal Register


• Medicare Shared Savings Program (Medicare ACOs)

–Various waivers of FW&A laws for ACO participants finalized in 2015

–Waivers are self-executing, after ACO certifies that gainsharing is bona fide arrangement related to purposes of ACO

• Bundled Payments for Care Improvement (BPCI)

–At-risk bundler includes description of gainsharing arrangement in implementation protocol approved by CMS

–Bundler executes formal agreement with gainsharers and sends list of provider numbers to CMS for program integrity screening

• Comprehensive Care for Joint Replacement Model (CJR)

–CJR collaborators must be Medicare providers participating in the care redesign; can share both upside and downside risk (as well as internally derived cost savings) up to certain limits

Process of Gainsharing for Medicare VBP: Uses Waivers of FW&A Rules


Health Plans Are Now Implementing Large-Scale Shared Savings Programs

68

• Accountable cost and quality arrangement (ACQA)—ACO look-alike

• Mechanism to organize physicians and operate across payers (e.g., Medicare Advantage and commercial plans)

This example operates in upstate NY


Pillar 1: Collaborative Leadership

• Governance body

• Compliant legal structure

• Payer strategy• Culture change

Pillar 2:Aligned Incentives

• Physician compensation

• Program infrastructure

• Physician support

Pillar 3:Clinical Programs

• Disease programs

• Care protocols• Clinical metrics• Population

health management

Pillar 4:Technology

Infrastructure

• Health information exchange

• Patient longitudinal record

• Disease registry• Patient portal

Health Systems & Physicians Looking atClinical Integration Strategy

• Primary purpose must be to integrate members’ clinical decision making and/or financial risk

• Must demonstrate benefit to payers and members

• Can negotiate reimbursement structures with managed care and other risk-bearing entities on behalf of its members that reward quality and efficiency

Source: http://www.beckershospitalreview.com/hospital-physician-relationships/the-4-pillars-of-clinical-integration-a-flexible-model-for-hospital-physician-collaboration.html

Clinically Integrated Care


One Possible Answer to Scale Challenge:Independent Provider Associations (IPAs)

Managed Care

Contracting

Vendor or Risk Taker in

Bundling or ACOs

Multiple Post-Acute Providers


Multi-Hospital

System & Physician Groups

Accountable Care

Organization

Medicare Advantage

Plan

Clinical Integration Examples:Provider + Risk + Scale = Transformation

Multiple Post-Acute Providers

Vendor or Risk Taker with Bundles

Managed Care

Contracting





• Cincinnati-based clinical integration model, LLC entity centered on value-based payments:

– Medicare Model 3 bundled payment convener

– Negotiating performance-based reimbursement with Medicare Advantage and MyCare Ohio duals plans

• Any traditional reimbursement contracts will be messenger model

Post-acute Providers Are Forming Networks and Pursuing Clinical Integration

Managed Care Contracting Example


Pillars of Value-Based Transformation:Whether It Is Your Risk or Someone Else’s

E.g., length of stay, costs,

readmissions rates, understand

costs (by diagnosis)

Data

E.g., patient safety (wounds, falls, infections),

patient satisfaction; star

ratings

Quality

E.g., care transitions, care

pathways, INTERACT

Process


To prepare for value-based care, define your value proposition in three key areas and then reach out to value-based payers:

Ability to Manage Readmissions & LOS Capabilities to manage the patient aggressively in situ, including telemonitoring and medical management strategies, all with lengths of stay within expected norms

Patient Outcomes (Versus Inputs) Relative to Peers Performance better than your peer group on key outcomessuch as functional status relative to therapy provided

Episodic Management CapabilitiesCapacity to manage seamlessly across multiple settings, effectively communicate with the bundler

74

Define Your Value Proposition


Preferred provider to hospital, bundler, or ACO

Active implementation of protocol to prevent avoidable hospitalizations

Measurement of outcomes in comparison to peers

Able to view to clinical information from upstream providers

Electronic medical record capable of 2-way exchange of clinical information

Routine risk stratification of admissions

Standardized care pathways

Comprehensive discharge planning and follow-up process

Clinical leadership buy-in

Basic Advanced

Very Advanced: Gainsharing arrangement; taking risk under bundling; value-based contracting with Medicare Advantage or SNP

Value-Based Preparedness Scorecard

75


Presentation Title

Success Will Be Defined by Delivering Quality Outcomes and Value

76 © HDG 2016 October 20, 2016#LTCConnection

Thank You!

Any Additional Questions?





Health Dimensions Group: What We Do

78

Strategic Consulting

• Strategic planning and positioning

• Health care continuum alignments

• Market growth strategies• PACE development• Bundling implementation• Senior service line

development• Post-acute medicine

development

Operational and Performance Improvement

• Clinical• Financial and billing• Regulatory compliance• Reimbursement advisory• Transaction advisory• Business office support• Operations

re-engineering

Management Solutions

• Strategic planning and positioning

• Turnaround management

• Transitional leadership• Full-service

management• Acquisitions &

divestiture• Interim management


Presentation Title

79

Documents

Wisconsin Health Care Association/Center for Assisted Living The … › files › 2016 › 10 › fall16conv-handouts1-5.pdf · 2017-11-02 · Risk Tracks • Three risk tracks (A,