February 24, 2016

Demonstrating Who You Are in CJR: Data Describes the Problem, Providers Deliver the Solution

© QURE 2016

Agenda• Introduction• CJR review• Cost management

strategies• Defining CJR success• Q&A

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Jay Sultan, Edifecs Principal Strategy Advisor

John Peabody, MD, PhD, FACP President, QURE Healthcare Professor, UCSF, UCLA

Speakers

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CJR Highlights• No choice about participation• Focus on post-acute care• Risk is borne by hospitals• New opportunities for

improving care • Mandate to lower total

episode costs• Episode impact will not be

limited to CJR

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Critical implications for hospitals

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Are Hospitals Prepared for CJR?

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39%have no experience of managing LEJR episodes

43%just getting started with bundled payments

44%in planning stages to analyse historical data to identify best-performing PAC providers

30%do not know if they will enter into gainsharing with SNFs

30%rely on manual ways to administer gainsharing payment

52%limited data sharing experience with providers

5Top-most challenges faced by providers

Tight timelines to prepare

Gainsharing program administration

Ongoing episode monitoring & reporting

Partnership agreements/contracts with providers

Care redesign for the entire episode

Source: CJR Readiness survey conducted by Edifecs, February, 2016.

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CCJR And High Variability in Clinical Practice Costs Select MSA Wage-Adjusted Episode Payments for TKA in CMS’ 9 Target Price Regions

• Higher: $32, 060• Las Vegas-

Henderson-Paradise, NV

• Lower: $21,1660• Lake Havasu

City-Kingman, AZ

• Higher: $28, 219• Los Angeles-

Long Beach-Anaheim, CA

• Lower: $18,440• Napa, CA

• Higher: $25,780 • Norwich-New

London, CT• Lower: $24,200

• Portland-South Portland

• Higher: $33,072 • Miami-Fort Lauderdale-West

Palm Beach, FL• Lower: $24,472

• Myrtle Beach-Conway-North Myrtle Beach, SC-NC

• Higher: $31,076 • New York-Newark-

Jersey City, NY-NJ-PA• Lower: $25,091

• Albany-Schenectady-Troy, NY

• Higher: $32,544 • Beaumont-Port Arthur, TX

• Lower: $26,123 • College Station-Bryan, TX

• Higher: $31,789 • Tuscaloosa, AL

• Lower: $26,312 • Evansville, IN KY

• Higher: $31,198 • Carbondale-Marion, IL

• Lower: $23,052 • Davenport-Moline-Rock

Island, IL

• Higher:$25,664• Springfield, MO

• Lower: $21,469 • Iowa City, IA

Sources: Centers for Medicare and Medicaid Services

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Variation in Discharge Patterns

Hip/Knee replacement facts• Cost of post acute care

growing 15%/year and is now greater than cost of actual surgery

• 300% variation in nursing home utilization

• Discharge patterns vary enormously by regions within states

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Sources: Definitive Healthcare, 2013 Medicare SAF (1/1/2013 – 12/31/2013)Note: # for every 10 patients rounded to the nearest whole number

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Managing Two Cost Structures

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Managing Hospital’s Own Cost• With or without CJR, all hospitals

need to manage this• Focus is on LOS, implantable

costs, formulary, readmission• Hard for most hospitals to do

more without physician’s cooperation

Managing CMS’s Cost• Within the gainloss and

gainshare, the hospital earns or loses 100% of CMS’s spend during the post-acute period• Other providers are spending

your money• A single patient who is

discharged home instead of a SNF could mean thousands of dollars in gained revenue.

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Equip Leadership with Analysis of Historical Data to Design the CJR Program

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• Intake and validate historical CMS episode payment data

• Perform episode volume analysis by DRG, LEJR procedure, comparison with regional episode costs

• Perform trended and annual inpatient and post-acute provider utilization and cost analysis

• Assess quality outcomes and isolate factors driving quality variations

Source: Edifecs

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Key Considerations for Cost Management, All Start with Better Care

Pre-Admission (surgeon’s office)Better screening and management of conditions prior to admission, to reduce LOS and complicationsBetter patient engagement (and education) pre-admission, to set expectations on pain and other topics and to start discharge planning with a presumption on home discharge when possible

During Acute Care (hospital and physicians)Better management of all costs related to implantable vendor choiceBetter coordination between anesthesia and surgeon (reduction of unwarranted variation, better pain management)Better engagement of physician in managing post acute (what they can do before or at time of discharge, what they can do post discharge)

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Implementation

The Clock Is Ticking…Hospitals Have < 2 Years to Align their Providers Before Penalties Begin

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Apr. 1: First Performance Period Begins

2015 2016 2017 2018 2019 2020 2021 2022

Design

Year 2: • 5% stop loss limit• Target Price: 2/3 hospital, 1/3 regional

Year 4 & 5: • 20% stop loss limit• Target Price: 100% regional

Year 3: • 10% stop loss limit• Target Price: 1/3 hospital, 2/3 regional

Year 1: No payment responsibility

Nov 16: Final Rule Posted – Hospital Controls

Jul 9: proposed framework in Federal Registrar

July 9 - Sep 8: Comment Period – Proposal for Physician Control of Bundle

Sources: Centers for Medicare and Medicaid Services

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The Paradox for HospitalsYou Control the Bundled Payment but Docs Control the Spending

• Clinicians lost control of the funds flow but they still have the most control over clinical care

• Hospitals are responsible for episode costs that are decided by clinicians

– Inappropriate, non standardized care, and/or complications drive up costs

• Hospital leadership is limited in the ways they can engage clinicians on changing clinical practice

Hospital-Clinician Alignment will be Critical to Success

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Clinical Independence

Financial Risk

Source: QURE Healthcare

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Home HealthAnchor Hospitalization

Physician Fee SchedulesSNF LTCH - IRF Readmissions

CJR Episode Bundle, MS-DRG 469, 470

Outpatient PT

Episode EndsEpisode Trigger

90 Days

You Are Now the Payer…

…and Consumers Will Choose

1. Costs are going (way) up for patients2. Consumerism is here

Choosing based on cost instead of quality? 3. Quality is its own reward

Voluntary Patient Reported Outcomes (PROs) can result in an additional 10% contribution to your composite quality metric scoreQuality and care standardization reduce your costs

PROs!!

Sources: Centers for Medicare and Medicaid Services , Edifecs

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Key Recommendations To Successfully Engage Providers in the CJR

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Align Around Efficient PracticesDevelop standardized care pathways that incorporate evidence-based guidance and local physician expertise

Target Unnecessary Variation Identify target areas to focus group-level care that will have a significant impact on cost AND quality

Gauge and Engage ProvidersUse tools that facilitate physician engagement, cost and quality measurement

Arm Leadership with Resources and Data on Value Closely align with physician leaders to ensure Value = Quality ÷ Cost

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4

3

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Increase Value while Reducing Costs

Source: QURE Healthcare

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Lower Extremity Joint Replacement, Several Expert Consensus Clinical Guides Are Needed

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Source: respective organization websites

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Infetion and inflammatory reac-tion due to other internal ortho-

pedic device, internal fixation de-vice

Other mechanical complication of prosthetic Joint

Dislocation of prosthetic joint

Osteoarthrosis, localized second knee

Infection and inflammatry reac-tion due to internal joint prosthesis

0 10 20 30 40 50

4.3

4.3

4.3

6.5

45.7

Why We Need to Get Care Right: Infections and Prosthetic Complications Drive Surgical Revisions

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< 3 months

3-6 months 6-12 months >1 year

Total Number 151 32 30 9Percentage 68% 14% 14% 4%

American Joint Replacement Registry: Time between Primary Hip and Knee Procedures Performed in 2012-2013 (n=222)

Mechanical loosening of prosthetic joint

Other mechanical complication of prosthetic joint implant

Dislocation of prosthetic joint

Peri-prosthetic fracture around prosthetic joint

Infection and inflammatry reaction due to internal joint prosthesis

0 10 20 30 40 50

7.3

8.5

14.6

31.7

37.8

Top 5 TKA Revision ICD-9’s (%) Top 5 THA Revision ICD-9’s (%)

Sources: American Joint Replacement Registry. The American Joint Replacement Registry Annual Report 2011.

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Alignment Means Adoption of Evidence-Based Care to Drive Quality and Value

Standardized Care Protocols: Outline most appropriate clinical path for patient typesCare path begins with pre-op planning and evaluation through the procedure to the post-hospital stayPost-operative costs are determined by preoperative evaluation and hospital stay

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CJR represents an opportunity to introduce and emphasize Evidence-Based Care

Source: QURE Healthcare

© QURE 2016

Why We Need to Get Care Right:Initial Care has a Cascading Effect

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• History• Cardiac

Assessment• Physical

Assessment• Radiological Exams

• Treatment Referral

SNF LTCH - IRF

Outpatient PT

Home Health

$$$

$$

$

Re-admissions

Patient Reported Outcomes• Anesthesia

Selection

Pre-Operative Operation PACU/Recovery

Post-Operative

• Procedure Selection

• Implant Selection

• Prophylactic Care

• Wound Management

• VTE

• Physical Therapy

• Early Mobility

• NutritionSource: QURE Healthcare

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WatchRecorded webinar

Demonstrating Who you Are in CJRQuestions? Contact us Courtney.tory@edifecs.com425-434-2200

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Too Much Variation: The Need to Standardize the History and Physical Examination

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• Patient history includes onset and duration of symptoms, location and severity of pain, activity limitations (e.g., walking distance, use of assistive devices, and difficulty with stairs)

• Physical examination includes gait, knee range of motion, presence or absence of deformity of the knee, stability of the knee, neurologic status (sensory and motor function), vascular status (peripheral pulses), skin, height, and weight

Review of 224 TKR patients in 3 affiliated hospitals • Present illness documented in 54% of patients• Pain evaluation documented in 60% of patients• All components of the physical examination documented in 5% of patients

• Identifies medical problems that need to be corrected prior to the procedure• Pre-operative activity level and symptoms helps determine the severity of knee arthritis and

baseline functionality• Necessary to plan for the surgical procedure

2003

Consensus Guidance

Real-Life Practice

ClinicalImportance

Sources: American Joint Replacement Registry, Annual Report 2015 ; American Association of Hip and Knee Surgeons, Total Knee Replacement, Performance Measure Set, Jan. 2013SooHoo N, Tang E, Krenek L, et al. Variations in the quality of care delivered to patients undergoing total knee replacement at 3 affiliated hospitals. Orthopedics 34(5):356, 2011.; American Academy of Orthopaedic Surgeons. AAOS treatment guideline of osteoarthritis of the knee full guideline. 2008.

2013