aco alternatives: payment bundling, based care and...
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Presenting a live 90‐minute webinar with interactive Q&A
ACO Alternatives: Payment Bundling, ACO Alternatives: Payment Bundling, Community‐Based Care and MoreLegal Challenges in Evaluating and Implementing Alternative Value‐Based Models
T d ’ f l f
1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific
TUESDAY, SEPTEMBER 20, 2011
Today’s faculty features:
Robert L. Roth, Partner, Hooper Lundy & Bookman, Washington, D.C.
Lloyd A. Bookman, Founding Partner, Hooper Lundy & Bookman, Los Angeles
Robert A. Minkin, Senior Vice President, The Camden Group, Los Angeles
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ACO AlternativesACO Alternatives
CLESeptember 20, 2011
Webinar Slide Presentation
Copyright 2011. This presentation as a whole and all of its individual parts are the exclusive property of The Camden Group.
GOALS FOR THIS PROGRAM
Help providers understand why they should be focusing on Medicare reform initiatives beyond ACOs
Explain the operational and legal aspects of several of the new initiatives coming out of the CMS Center for Medicare & Medicaid Innovation including financial risk that programMedicaid Innovation, including financial risk that program participants will have to bear
Explain how these new initiatives are harbingers of a future that may mean the end of fee-for-service Medicare
9/11/2011 ι 6THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
WHY THIS PROGRAM?
The Failure of the Proposed ACO Regulations The March Towards Health Care Reform in the Commercial
Sector Delivery System Redesign is Inevitable Regardless of
Government MisstepsGovernment Missteps Integration is Occurring The Centers for Innovation’s Bundling Models The Centers for Innovation s Bundling Models
9/11/2011 ι 7THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
PPACA—Searching for Delivery System Reform
PPACA contains much insurance reform Movements towards expanded coveragep g Revenue generation Expenditure reductions in Medicare and Medicaid “Integrity” expansion But, precious little heath care delivery system reform
9/11/2011 ι 8THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Agenda
Bundled Payment and Readmission RiskMedical HomeMedicare Shared Savings ProgramMedicare Shared Savings ProgramCritical Success Factors
Healthcare Spending GrowthCMS Projections for National Healthcare Spending
$4,353
21.0%
$4,500
$5,000
CMS Projections for National Healthcare SpendingCY 2003 - 2018(Amount in Billions)
$$3,313
$3,541
$3,790
$4,062
18.9%
19.3% 19.8%
20.3%
19.0%
20.0%
$3,500
$4,000 National Health Expenditures (billions)
National Health Expenditures as a Percent of Gross Domestic Product
$2 113$2,241
$2,379$2,510
$2,624$2,770
$2,931$3,111
17.6%17.7%
17.9%18.0%
18.2%
18.5%
18.0%$2,500
$3,000
$1,735 $1,855$1,981
$2,113
16.6% 17.0%$1,500
$2,000
15.8%15.9% 15.9%
16.0%16.2%
16.0%
$500
$1,000
9/11/2011 ι 10THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
15.0%$0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: Centers for Medicaid & Medicare Services - NHE Projections 2008-2018, Forecast Summary and Selected Tables
Looking Ahead
“ if ld t ll t“…if we could actually get our health-care system across the board to hit the efficiency levels of a Kaiserlevels of a Kaiser Permanente… we actually would have solved our problems ”problems.
-President Obama, 2010
9/11/2011 ι 11THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
GOALS OF REFORM MODELS
Bend the cost curve
Improve Quality; narrow the network?
Shift total government program risk to providers
B t d t t i t b fi i f d f h i But, do not restrict beneficiary freedom of choice
9/11/2011 ι 12THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Assumptions
Can decrease cost and improve quality through greater integration and coordination among hospitals, physicians, and post-acute providers
Evidence-based medicine works and is a key component Need quality reporting can design successful quality metrics Need quality reporting—can design successful quality metrics
which will lead to care improvements Alignment of economic incentives among providers will lead to g g p
more efficient and cost-effective care
9/11/2011 ι 13THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Goals of CMS’ ‘Bundling for Care Improvement Initiative’
Improve overall quality and Value
Drive physician collaboration through Financial Incentives as a mechanism to improveas a mechanism to improve efficiency and achieve sustainable results
Reduce or stabilize growing costs to Medicare for acute care services by maximizingcare services by maximizing the use of available capacity in high quality providers
9/11/2011 ι 14THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Bundling Concepts
Basic idea is predetermined payment for a defined bundle of services
What services are in the bundle? What services are in the bundle? What is the episode of care? What conditions are subject to the bundled payments?j p y Retrospective vs. Prospective Bundled Payment Retrospective—providers are paid under the Medicare fee-
ffor-service systems with a reconciliation to the bundled amount
Prospective—the awardee is paid a bundled payment Prospective the awardee is paid a bundled payment amount, standard Medicare FFS payments are not made, and the awardee is responsible for paying the other providers
9/11/2011 ι 15THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
The Basics
CMMI Has Recently (August 23, 2011) Proposed Four Separate Bundled Payment Models For StudyGo To: http://innovations cms gov/areas of focus/patientGo To: http://innovations.cms.gov/areas-of-focus/patient-
care-models/bundled-payments-for-care-improvement.html
All Four Models Will Include An Assumption of Financial Liability All Four Models Will Include An Assumption of Financial Liability By The Awardee for Medicare Payments That Exceed Historical Trends—No Caps, No risk corridors (unlike proposed ACO regulations)regulations)
All Four Models Permit “Approved” Gainsharing
Apply only to Medicare Part A and Part B services
9/11/2011 ι 16THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Beneficiaries Must Be Notified of Participation and Will Continue to Have Freedom To Choose Their Providers
The Basics
Awardees may be acute care hospitals, physician group practices, health systems, physician-hospital organizations, post-acute providers, and “conveners of participating health care providers”
Applicants are encouraged to participate in other Medicare payment initiatives as well, including the Medicare Shared Savings Program, Pioneer ACOs, and other medical home and shared savings initiatives
9/11/2011 ι 17THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
The Basics
Bundled Payment Agreements Will Last For 3 Years (with Potential 2 Year Extensions)
First Program Could Start As Early as 1Q 2012 (Model 1 Awardees)
LOI and Application Due Dates: LOI and Application Due Dates:Model 1 LOI Due October 6, 2011; Application Due
November 18, 2011,Models 2-4 LOI Due November 4, 2011; Application Due
March 15, 2012 LOIs are non-binding
Models 2-4 Must Also Submit a Research Request Packet Along With Their LOI To Receive Data From CMS
9/11/2011 ι 18THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Along With Their LOI To Receive Data From CMS Applicants Late Submitting Their LOI Will Not Be Considered
The Basics
Applications will be scored, process will be selective Applicants must demonstrate ability to bear risk of losspp y These programs generally include patients who are eligible for
fee-for-service (“FFS”) Medicare on the basis of age or disability (ESRD beneficiaries and Medicare Advantage enrollees are(ESRD beneficiaries and Medicare Advantage enrollees are excluded)
Medicare must be the primary payerp y p y Unclear about how coordination with secondary payers and bad
debts will work Applicants can request some of a portion of a Deductible waiver
9/11/2011 ι 19THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Model 1- Retrospective Acute Care Hospital Stay Only
Applies to Noted Medicare FFS Beneficiaries Admitted to Awardee Regardless of Assigned MS-DRG
Episode Includes All Part A Services Furnished To Beneficiaries
I l d H i l Di i T i d R l d Includes Hospital Diagnostic Testing and Related Therapeutic Services Furnished by an Entity Wholly-Owned or Operated by the Hospital Three (3) Days Before Admission
Episode Ends On Hospital Discharge
9/11/2011 ι 20THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Model 1- Retrospective Acute Care Hospital Stay Only
Awardees To Offer CMS A Discount On Usual Part A Inpatient Payments Discount to be Calculated to Include All Payment Adjustors Discount to be Calculated to Include All Payment Adjustors
and Applicable Outlier Payments (Except DSH, Capital, IME)
Medicare makes normal FFS payments less discount on hospital Part A payments
Minimum Discounts: 0% or Higher For First 6 Months of Year 1 0% or Higher For First 6 Months of Year 1 .5% or Higher For Second 6 Months of Year 1 1% or Higher for Year 2
9/11/2011 ι 21THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
g 2% or Higher for Year 3
Model 1- Retrospective Acute Care Hospital Stay Only
There Is No Episode Reconciliation on Part A Payments
Episode Monitoring: Awardee Required To Pay Medicare For Amount Of Part A
and Part B Payments For Inpatient Stay In Excess ofand Part B Payments For Inpatient Stay In Excess of Trended Historical Aggregate Beyond Risk Threshold
P t E i d M it i Post-Episode Monitoring:Monitoring Period = 30 days post hospital discharge Awardee Required To Pay Medicare Amount of Part A and Awardee Required To Pay Medicare Amount of Part A and
Part B Payments During Monitoring Period In Excess Of Trended Historical Aggregate Risk Threshold
9/11/2011 ι 22THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Model 2- Retrospective Acute Care Hospital Stay Plus Post-Acute Care
E t d E i d f C T I l d P t A t C Extends Episode of Care To Include Post-Acute Care
Uses Typical FFS Payment With Retrospective Reconciliation Uses Typical FFS Payment With Retrospective Reconciliation
Applies to Proposed/Accepted MS-DRG’spp p p
Episode Begins with Admission and Continues Through a Minimum of 30 days Following Discharge
Quality Measures To Be Proposed (But Standard Set Will Quality Measures To Be Proposed (But Standard Set Will Ultimately Be Required)
9/11/2011 ι 23THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Model 2- Retrospective Acute Care Hospital Stay Plus Post-Acute Care
E i d I l d Episode Includes: All Part A and Part B Services Furnished During Stay
All Part A and Part B Services In Post-Discharge Period Related To Episode Anchor
All Hospital Diagnostic Testing and Related Therapeutic Services Furnished By an Entity Wholly-Owned or Operated By the Hospital Three (3) Days Before Admission
All Part A Services For Related Readmissions All Part A Services For Related Readmissions
All Part B Services Furnished During the Post-Discharge
9/11/2011 ι 24THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Period during Related and Unrelated Readmissions
Model 2- Retrospective Acute Care Hospital Stay Plus Post-Acute Care
Applicant proposes a “Target Price”
May be risk adjusted
Post-episode reconciliation between Target Price and Part A and Part B expenditures
Awardee pays Medicare if expenditures exceed Target Price
Awardee receives additional payments if expenditures are less than Target Price
9/11/2011 ι 25THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Model 2- Retrospective Acute Care Hospital Stay Plus Post-Acute Care
Two Options:
Option 1:
Minimum 30 89 Day Post Discharge Period Minimum 30 -89 Day Post-Discharge Period Minimum 3% Discount (for Part A and Part B)
Option 2:
Minimum 90+ day Post Discharge Period Minimum 90+ day Post-Discharge Period Minimum 2% discount (for Part A and Part B)
9/11/2011 ι 26THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Model 2- Retrospective Acute Care Hospital Stay Plus Post-Acute Care
Post-Episode Monitoring
Monitoring Period = 30 Days Post Episode
If Part A and Part B Payments For Services During Monitoring Period For Included Beneficiaries Exceed The Trended Historical Aggregate Risk Threshold, Awardee Pays M di Th DiffMedicare The Difference
9/11/2011 ι 27THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Model 3- Post-Acute Care Only
Episode Begins with Initiation of Post Acute Care at Episode Begins with Initiation of Post –Acute Care at Awardee (or Participating) SNF, IRF, HHA, or LTCH Within 30 Days of Discharge from Acute-Care Hospital For Agreed Upon MS-DRGHospital For Agreed Upon MS DRG
Episode Lasts a Minimum of 30 Days
Episode Includes: All Related Part A and Part B Services Furnished
D i E i d P i d (I l di R l t dDuring Episode Period (Including Related Readmissions)
All Part A Services for Related Readmissions F i h d D i E i d P i dFurnished During Episode Period
All Related Or Unrelated Part B services Furnished During Episode Period
9/11/2011 ι 28THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Model 3- Post-Acute Care Only
Applicant proposes Target Price
Traditional FFS Payment Reconciled Against Traditional FFS Payment Reconciled Against Agreed-Upon Target Price
Episode Reconciliation: Episode Reconciliation: If Aggregate FFS Payments Less Than Target
Price, Awardee Paid Difference If Aggregate FFS Payments More Than Target If Aggregate FFS Payments More Than Target
Price, Awardee Pays Medicare Difference
9/11/2011 ι 29THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Model 3- Post-Acute Care Only
Post-Episode Monitoring
Monitoring Period = 30 Days After End of Episode If Part A and Part B Paid For Included Beneficiaries Exceeds
Th T d d Hi i l A P B d Ri kThe Trended Historical Aggregate Payment Beyond Risk Threshold, Awardee Pays Medicare Difference
Quality Measures To Be Proposed (But Standard Set Will Ultimately Be Required)
9/11/2011 ι 30THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Model 4- Prospective Acute Care Hospital Stay Only
Episode Begins with Acute Inpatient Admission and Continues Through Discharge For Agreed/Accepted MS-DRGs
Episode Includes:
All R l d P A d P B S i All Related Part A and Part B Services Including Hospital Diagnostic Testing and Related
Therapeutic Services Furnished by an Entity Wholly-Owned O t d b th H it l Th (3) D B f Ad i ior Operated by the Hospital Three (3) Days Before Admission
All Part A Furnished During Related Readmissions All Part B Furnished During Any Readmission (Related or g y (
Unrelated) During Episode Period
Episode Ends at Discharge
9/11/2011 ι 31THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
p g
Model 4- Prospective Acute Care Hospital Stay Only
Applicants Expected to Propose a Target Price With a Single Rate of Discount (Minimum 3% or Larger For ACE MS-DRGs))
Payment Of Agreed-Upon Bundled Payment Is Made To Awardee
Physicians To Be Paid By Awardee With No Separate Payment By CMS
Payment To Physician Could Be Same Rate or Different Negotiated Rate
Covered Part B Claims Will Be Processed As No Pay
9/11/2011 ι 32THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Model 4- Prospective Acute Care Hospital Stay Only
Episode Reconciliation Single Payment Made Awardee Must Repay Medicare for Any Separate Payment
for: Part A or Part Claims During the Episode (including a Part A or Part Claims During the Episode (including a
related readmission) Part B Claims During Episode
P t B Cl i D i A R d i i (R l t d Part B Claims During Any Readmission (Related or Unrelated)
9/11/2011 ι 33THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Model 4- Prospective Acute Care Hospital Stay Only
Post-Episode Monitoring
Monitoring Period = 30 Days After Discharge
Awardee Must Repay Medicare Part A and Part B Payments for Services During Monitoring Period InPayments for Services During Monitoring Period In Excess of Trended Historical Aggregate Payment Beyond Risk Thresholdy
9/11/2011 ι 34THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
BUSINESS CONCERNS AND S CPERSPECTIVE
9/11/2011 ι 35THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Commercial Plans are Moving Ahead
9/11/2011 ι 36THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Value Based Purchasing Design (VBPD) – Less Out-of-Pocket for Patients
Date: January 1, 2011�ALVARADO HOSPITAL LLC ARROYO GRANDE COMMUNITY HOSPITAL BAKERSFIELD MEMORIAL HOSPITAL CEDARS-SINAI MEDICAL CENTER DAMERON HOSPITAL
QUEEN OF THE VALLEY MEDICAL CENTER SAN ANTONIO COMMUNITY HOSPITAL SAN JOAQUIN COMMUNITY HOSPITAL SANTA MONICA UCLA MEDICAL CENTER SANTA ROSA MEMORIAL HOSPITAL
Who: �
DAMERON HOSPITAL DESERT REGIONAL MEDICAL CENTER EISENHOWER MEDICAL CENTER EL CAMINO HOSPITAL ENLOE MEDICAL CENTER INC FRENCH HOSPITAL MEDICAL CENTER FRESNO SURGICAL HOSPITALGood SAMARITAN HOSPITALHANFORD COMMUNITY MEDICAL CENTERHEALDSBURG DISTRICT HOSPITAL
SANTA ROSA MEMORIAL HOSPITAL SIERRA VISTA REGIONAL MEDICAL CENTER SONORA REGIONAL MEDICAL CENTER ST AGNES MEDICAL CENTER ST JOHN’S HOSPITAL AND HEALTH CENTER ST JOSEPH HOSPITAL – ORANGE ST JUDE MEDICAL CENTER ST MARYS MEDICAL CENTER ST VINCENT MEDICAL CENTER STANFORD UNIVERSITY HOSPITAL HEALDSBURG DISTRICT HOSPITAL
HOAG MEMORIAL HOSPITAL PRESBYTERIANHUNTINGTON MEMORIAL HOSPITALJOHN F KENNEDY MEMORIAL HOSPITALKAWEAH DELTA MEDICAL CENTERLOMA LINDA UNIVERSITY MEDICAL CENTERLONG BEACH MEMORIAL MEDICAL CENTERMERCY MEDICAL CENTER – REDDINGMETHODIST HOSPITAL OF SACRAMENTO PLACENTIA LINDA HOSPITAL
STANISLAUS SURGICAL HOSPITAL THOUSAND OAKS SURGICAL HOSPITAL TORRANCE MEMORIAL MEDICAL CENTER TWIN CITIES COMMUNITY HOSPITAL INC UC DAVIS MEDICAL CENTER UCSF MEDICAL CENTER VALLEY PRESBYTERIAN HOSPITAL VALLEYCARE MEDICAL CENTER
Participating Health Plans:
PLACENTIA LINDA HOSPITAL
Procedures:
Select Orthopedic and Cardiac procedures (single hip and knee replacement and cath with stent
9/11/2011 ι 37THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
placement)
Commercial Payer and Research Funding Priority
Target Date: April 1, 2011g p
Funder: Agency for Healthcare Research and Quality
Who:
ParticipatingHealth Plans:
Selected Orthopedic procedures (hip and
9/11/2011 ι 38THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Procedures:Selected Orthopedic procedures (hip and knee replacement, knee arthroscopy, and catheterization with stents)
Blue Cross Bundling in New Jersey
Dr. Richard Popiel, who served as Vice President and Chief Medical Officer of Horizon BCBSNJ and will lead the new company as President and Chief Operating Officer. “We’re committed to leading a major
ll b ti ff tcollaborative effort among physicians, hospitals, policy makers, employers, patients, and insurers to rethink how we deliver
9/11/2011 ι 39THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
insurers to rethink how we deliver quality care and control costs.”
Why Should a Provider Take BundlingWhy Should a Provider Take Bundling Risk?
9/11/2011 ι 40THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Bundled Payment: Nothing New Conceptually
Medicare participating Heart Bypass
Medicare participating Centers of Excellence Demonstration
Medicare participating Cardiovascular and Orthopedic Centers of Excellence
CMS Medicare Heath Care Quality Demonstration Project
ACE Demonstration “Value based Care
CMS National Voluntary PilotHeart Bypass
DemonstrationDemonstration Excellence
DemonstrationValue-based Care
Centers”Pilot
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Medicare Cataract Alternative Payment D t ti
Geisinger Health System
Prometheus Payment Method
United Healthcare Oncology Bundled PaymentDemonstration
IHA CA Commercial Bundled Payment Project
Blue Cross New Jersey
Payment
9/11/2011 ι 41THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Blue Cross New Jersey Orthopedics Bundled Payment
Estimated Cumulative Percentage Changes in National Health Care Possible Reform Savings
Expenditures, 2010 through 2019
9/11/2011 ι 42THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Hussey P., et al. New England Journal of Medicine 2009;361:2109-2111HIT denotes health information technology, NP denotes nurse practitioner, and PA denotes physician assistant.
CMS’ Latest Bundled Program Major changes from ACE to BPCII Chronic-disease management bundled payments will be next with Models
5,6,7 CMS implementing effective 2013 CONSOLIDATED Part A and Part B
Major changes from ACE to BPCII
CMS implementing effective 2013 CONSOLIDATED Part A and Part B Fiscal Intermediary contractors, staging for nation-wide Bundled Payment deployment
Physician Incentive grows from 25% to 50% Physician Incentive grows from 25% to 50% Patient Shared Savings eliminated Immense creativity being allowed to implement bundled payments in ALL
clinical spaces: one version is one versionclinical spaces: one version is one version. Un-Bundled FFS Medicare likely to end in 2019
9/11/2011 ι 43THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Growing Evidence for Bundled Payment
Key findings: Medical spending was two
percent lower for Hospitals and
“Harvard Study Shows Global Payments Improve Healthcare While Controlling Costs”
percent lower for Hospitals and physicians involved in global payments compared with those under traditional Fee-for-Service modelsmodels.
For physicians and Hospitals with no prior experience in global payments, spending was d d b i tdecreased by six percent.
Year-one savings were the result of altering referral patterns and shifting care to lower-cost
S Oh J (J l 14 2011) H d t d h l b l t i h lthfacilities. The quality of care among sites
that participate in bundled payments is significantly higher
Source: Oh, J. (July 14, 2011). Harvard study shows global payments improve healthcare while controlling costs. Becker’s Hospital Review. Retrieved from http://www.beckershospitalreview.com/hospital-physician-relationships/harvard-study-shows-global-payments-improve-healthcare-while-controlling-costs.html
9/11/2011 ι 44THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
p y g y gthan that of the providers under traditional contracts.
Building the Foundation for Shared Risk
Inpatient Episode Payment ModelsInpatient Episode Payment Models
Fee-for-Service Bundled PaymentPayer Payer
Payer provides single payment intended to
t f
$ $ $ $ $$
cover costs of entire patient hospitalization
$
Post-acuteServices
Hospital
Anesthesiologist
ConsultingPhysician
HospitalistSurgeon Hospital Inpatient Physicians
Post-acuteServices
9/11/2011 ι 45THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Physician
Mechanisms to Drive Quality and Efficiency
A Market Approach:A Market Approach:
Bundling or global payments
Competitive Quality scores and bid will determine winner
Gainsharing with physicians Gainsharing with physicians expanded
Shared savings with gbeneficiaries eliminated for 2012/2013 version….however,
A li t t i Applicant may request a waiver for all or some of the Medicare deductible.
9/11/2011 ι 46THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
CMS Application Overview Selection Criteria and Weights Financial Model (40 points) Overall Savings to Medicare Risk Adjustment (if applicable) Anticipated Actions that will result in lower spending Anticipated Actions that will result in lower spending
Quality and Patient Centeredness (25 points) Proposed Mechanisms to Improve Quality and Patient Experience of Care Proposed Quality Metricsp y Quality Assurance and Continuous Quality Improvement Beneficiary Protections
Demonstration Design (20 points) Definition of Episode Level of Provider Engagement and Participation Care Improvement Design for Gainsharing Design for Gainsharing
Organizational Capabilities, Prior Experience, and Readiness (15 points) Financial Arrangements Commitment and Credentials of Executives and Governance Bodies
9/11/2011 ι 47THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Success and Readiness to Participate Partnerships
Application Process
Financial model and arrangements
Organizational structure and governance Organizational structure and governance
Current quality and efficiency metrics at 90th percentile
Cost savings opportunities and quality improvement
Provider engagement and partnerships
Care Redesign Facility and Historyg y y
Marketing plan to beneficiaries
9/11/2011 ι 48THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Why Others Have Done It?
Raise the profile of a high performing Clinical program
More effectively partner with physicians
G k t h t i Grow market share across payer categories
Retain existing Medicare business and grow it
Add payers to the existing portfolio
Develop management intelligence to deliver high Develop management intelligence to deliver high Value care in a bundled payment environment as FFS is dying quickly
9/11/2011 ι 49THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
What Is In It for Physicians?
Potential volume increase
Protect current Medicare market share
Pay physicians more quickly if in Model 4
Co-management of clinical services affecting them
Improved quality and patient experience
Gain Sharing up to a 150 percent of Medicare
Effective and integrated care coordination
9/11/2011 ι 50THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
g
What’s In It for Hospitals?
Strengthen service line: Reduction of costs Enhanced operational efficiency Enhanced operational efficiency Enhance clinical quality Improved patient experience P t t t k t h Protect current market share
Build Organizational Mastery to manage to EOC fixed budget
Build market share Preferred provider status within region
Stepping stone in physician integration supporting Stepping stone in physician integration supporting progress toward clinical integration or ACO Alignment in care management
Co management of clinical services
9/11/2011 ι 51THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Co-management of clinical services
What’s in it for CMS?
CMS has reported $42.3 Million in savings in the current CMS has reported $42.3 Million in savings in the current ACE Demonstrations with substantial increases in
Clinical Quality.
9/11/2011 ι 52THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Sample Model Four Cardiac Bundled Payment BidDraft CMS Bundled Payment Bids by MS-DRG for Application - Conservative Discount
CY 2011
CY 2010 Medicare
MS-DRGFFS
CasesAvg. Cont.
Margin/CaseHospital Actual Discount
Hosp w/ Discount
ACE Avg (1)
Compare to ACE %
Proposed Bid
Hospital Actual
ACE Avg (2)
Compare to ACE %
Proposed Bid
216 12 $3 969 $80 220 $ 8 214 $6 408 $12 806 20% $ 8 214 $9 2 4 $10 846 ($1 3) 14% $10 846 $ 6 2 $
Part A Part B
Total ACE Average
Total Proposed
Bid
216 12 $37,969 $80,220 -2.5% $78,214 $65,408 $12,806 20% $78,214 $9,274 $10,846 ($1,573) -14% $10,846 $76,255 $89,061217 3 23,309 53,018 -2.5% 51,692 45,396 6,296 14% 51,692 8,792 7,543 1,250 17% 8,792 52,939 60,485218 5 16,320 43,036 -2.5% 41,960 44,001 (2,041) -5% 41,960 5,889 5,899 (10) 0% 5,899 49,900 47,858219 5 34,125 63,818 -2.5% 62,222 51,155 11,067 22% 62,222 10,438 7,893 2,545 32% 10,438 59,048 72,660220 2 18,024 42,849 -2.5% 41,778 35,761 6,017 17% 41,778 7,931 5,373 2,559 48% 7,931 41,134 49,709221 8 10,432 35,771 -2.5% 34,877 31,986 2,891 9% 34,877 5,233 4,665 568 12% 5,233 36,651 40,110226 6 18,508 49,280 -2.5% 48,048 38,329 9,719 25% 48,048 2,911 3,290 (379) -12% 3,290 41,620 51,338227 25 12 508 40 862 -2 5% 39 840 33 028 6 813 21% 39 840 2 178 1 825 353 19% 2 178 34 853 42 018227 25 12,508 40,862 -2.5% 39,840 33,028 6,813 21% 39,840 2,178 1,825 353 19% 2,178 34,853 42,018231 1 30,130 63,557 -2.5% 61,968 47,495 14,473 30% 61,968 5,632 6,590 (957) -15% 6,590 54,085 68,558232 0 0 36,660 -2.5% 35,744 43,687 (7,943) -18% 35,744 5,855 6,032 (177) -3% 6,032 49,719 41,776233 18 20,225 55,277 -2.5% 53,896 46,036 7,860 17% 53,896 6,657 7,277 (620) -9% 7,277 53,313 61,173234 18 16,766 37,316 -2.5% 36,383 31,692 4,692 15% 36,383 5,503 5,361 142 3% 5,503 37,052 41,887235 8 20,059 45,397 -2.5% 44,262 38,709 5,553 14% 44,262 5,804 6,236 (432) -7% 6,236 44,945 50,498236 19 10,655 30,068 -2.5% 29,316 24,212 5,104 21% 29,316 5,030 4,085 944 23% 5,030 28,297 34,346242 10 6,499 26,743 -2.5% 26,075 21,807 4,268 20% 26,075 1,607 2,693 (1,086) -40% 2,693 24,500 28,768243 17 9,365 20,137 -2.5% 19,634 16,418 3,215 20% 19,634 1,193 1,480 (287) -19% 1,480 17,898 21,113244 15 6,070 15,855 -2.5% 15,459 13,365 2,094 16% 15,459 1,481 1,037 444 43% 1,481 14,402 16,940246 46 10,977 27,190 -2.5% 26,510 18,790 7,720 41% 26,510 0 2,428 (2,428) -100% 2,428 21,218 28,939247 173 6,928 15,287 -2.5% 14,905 13,291 1,614 12% 14,905 1,712 1,406 306 22% 1,712 14,697 16,617248 17 10,873 23,347 -2.5% 22,763 17,071 5,692 33% 22,763 2,540 2,173 367 17% 2,540 19,244 25,302249 43 5,694 13,918 -2.5% 13,570 11,922 1,648 14% 13,570 1,289 1,477 (188) -13% 1,477 13,400 15,048250 4 2,756 18,475 -2.5% 18,013 16,111 1,902 12% 18,013 1,705 2,869 (1,164) -41% 2,869 18,980 20,882251 40 7 035 13 997 13 647 11 977 1 670 14% 13 647 2 620 1 764 856 49% 2 620 13 741251 40 7,035 13,997 -2.5% 13,647 11,977 1,670 14% 13,647 2,620 1,764 856 49% 2,620 13,741 16,267258 0 0 18,197 -2.5% 17,742 17,344 398 2% 17,742 280 1,924 (1,644) -85% 1,924 19,268 19,666259 1 7,472 13,093 -2.5% 12,766 12,433 333 3% 12,766 1,705 1,133 571 50% 1,705 13,567 14,471260 1 8,266 27,217 -2.5% 26,537 29,733 (3,196) -11% 26,537 5,456 6,330 (874) -14% 6,330 36,062 32,867261 2 346 12,318 -2.5% 12,010 9,735 2,275 23% 12,010 1,319 1,283 37 3% 1,319 11,018 13,330262 0 0 7,086 -2.5% 6,909 7,572 (664) -9% 6,909 0 875 (875) -100% 875 8,448 7,784
Total/Avgs 499 $10,295 $24,944 -2.5% $24,320 $20,572 $3,748 18% $24,320 $2,586 $2,629 ($43) -2% $2,942 $23,201 $27,262
9/11/2011 ι 53THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
(1) Four ACE Demo sites adjusted for FY 2011, Wage Index, and Capital Geographic Adjustment Factor (GAF)(2) Four ACE Demo sites adjusted for FY 2011 and Geographic Practice Cost Index (GPCI) = indicates ACE average w as used for bid
Required Beneficiary Education by Provider
9/11/2011 ι 54THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Extensive Required Quality Measures
AMI 1 Aspirin at ArrivalAMI-1 Aspirin at Arrival
AMI-5 Beta-Blocker Prescribed at Discharge
AMI-9 Inpatient Mortality
HF-1 Discharge Instructions
HF-3 ACEI or ARB for LVSD
PN-2 Pneumococcal Vaccination
PN-5c Timing of Receipt of Initial Antibiotic Following Hospital Arrival
PN-7 Influenza Vaccination (Note: Reported by Flu Season ONLY)
SCIP-Inf-2 Prophylactic Antibiotic Selection for Surgical Patientsp y g
SCIP-Inf-3 Prophylactic Antibiotics Discontinued Within 24 Hours After Surgery End Time
SCIP-VTE-1 Surgery Patients with Recommended Venous Thromboembolism Prophylaxis Ordered
VTE-2 Intensive Care Unit Venous Thromboembolism Prophylaxis
VTE-6 Incidence of Potentially-Preventable Venous Thromboembolism
STK-2 Discharged on Antithrombotic Therapy
9/11/2011 ι 55THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
STK 2 Discharged on Antithrombotic Therapy
STK-5 Antithrombotic Therapy By End of Hospital Day 2
Extensive Required Quality Measures
STK 6 Discharged on Statin MedicationSTK-6 Discharged on Statin Medication
TK-10 Assessed for Rehabilitation
ED-2 Admit Decision Time to ED Departure Time for Admitted Patients
HAI Central Line Associated Bloodstream Infection (CLABSI)
Structural-2 Participation in a Systematic Clinical Database Registry for Stroke Care
Data Accuracy Data Accuracy and Completeness Acknowledgement
MORT-30-HF Heart Failure (HF) 30-Day Mortality Rate
READM-30-AMI Acute Myocardial Infarction (AMI) 30-Day Readmission Rate
READM-30-PN Pneumonia (PN) 30-Day Readmission Rate( ) y
PSI-06 Iatrogenic Pneumothorax, Adult
PSI-14 Postoperative Wound Dehiscence
IQI-11 Abdominal Aortic Aneurysm (AAA) Mortality Rate (with or without volume)IQI-11 Abdominal Aortic Aneurysm (AAA) Mortality Rate (with or without volume)
IQI-91 Mortality for Selected Medical Conditions (composite)
HAC-2 Air Embolism
HAC 4 P Ul St III & IV
9/11/2011 ι 56THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
HAC-4 Pressure Ulcer Stages III & IV
HAC-8 Manifestations of Poor Glycemic Control
Critical Success Factors Under Bundling
Vision, perseverance, and courage
Physician leadership and co-management
Targeted education to distribution channels
Best practices in cost, efficiency and effectiveness
90th percentile Quality
Legal Structures able to G
9/11/2011 ι 57THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
handle Gainsharing
LEGAL ISSUES
9/11/2011 ι 58THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
THREE CATEGORIES OF REGULATORY ISSUES
Federal laws for which CMS has waiver authority
Federal laws for which CMS has no waiver authority
State laws
9/11/2011 ι 59THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
CMS Waiver Authority
CMS may waive any provision in Titles 11 and18 of the Social Security Act as may be necessary to test models described in statute authorizing Centers for Innovation (Social Security Act section 1115A(d)(1))
This includes the federal CMP statute the federal anti-kickback This includes the federal CMP statute, the federal anti-kickback statute, and the Stark law
Applicant should propose specifically what aspects of the law it wants waived and obtain specific approval for its models and waiver of the potentially applicable laws as applied to those modelsmodels
9/11/2011 ι 60THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
CMP Statute
The CMP statute prohibits payments from hospital to physician to reduce or limit services to Medicare or Medicaid beneficiaries [42 U S C sec 1320a 7a(b)(1) and(2)][42 U.S.C. sec. 1320a-7a(b)(1) and(2)]
Could be implicated by gainsharing arrangements or other innovative arrangements to economize on care
CMS has indicated it will permit gainsharing under bundling models
Compensation to be shared cannot exceed Compensation to be shared cannot exceed 50% of the total savings achieved under the bundled
payment program50% f h i i ’ l t f th i l d d i 50% of physician’s normal payment for the cases included in the gainsharing initiative
Physicians may not reduce or limit medically necessary services
9/11/2011 ι 61THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
y y y y Physician participation in gainsharing must be voluntary
The Stark Law
The Stark law prohibits referrals by a physician to an entity with which the physician has a financial relationship for the provision of designated health services (“DHS”)
DHS includes inpatient and outpatient hospital services There are numerous and complex exceptions There are numerous and complex exceptions There will likely be various financial arrangements between
DHS entities and physicians:p yGainsharing Hospital payments to physicians for services
May be difficult to fit these arrangements within an existing exception
9/11/2011 ι 62THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
The Federal Anti-Kickback Statute
Prohibits the payment or receipt or remuneration to induce referrals of government health care business
Some of the arrangements could be perceived as inducing referralsGainsharing or other payments to physiciansGainsharing or other payments to physicians Arrangements with post-acute providers could be seen as
such providers furnishing remuneration for referralsp g
9/11/2011 ι 63THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Non-Waiveable Statutes
Federal Antitrust laws Could be implicated if there is collaborate pricing among p p g g
competitors, or other anti-competitive behaviorMay occur if model is used beyond Medicare
C id ki FTC/DOJ L Consider seeking FTC/DOJ Letter
Tax exempt Status Issues Tax-exempt Status Issues InurementMore than incidental private benefitMore than incidental private benefit Use of tax-exempt bond financed property Payments consistent with fair market value
9/11/2011 ι 64THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Cannot share tax-exempt organization’s profits
State Laws
State Anti-Kickback Statutes State Self-Referral Statutes State Statutes Governing Insurance, Health Plans, and Risk-
Bearing OrganizationsS A i l State Antitrust laws
State Corporate Practice of Medicine Prohibitions
9/11/2011 ι 65THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Patient Centered Medical Home
9/11/2011 ι 66THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
What is a Medical Home?
Patient-centered Medical Home (“PCMH”)All of a patient’s care is coordinated by a physician-led
multidisciplinary team. Access and care coordination are facilitated by an extensive use of technology.
9/11/2011 ι 67THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Primary Care Model-Key Features
A personal PCP Physician-director medical
practicepractice Whole-person orientation Coordinated care Quality and safety Enhanced access
9/11/2011 ι 68THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Principles of Patient-centered Medical Home“When and how” based on ti t f d d
Patient Accessand
Communication
patient preference and needs
Metrics used to define performance: quality, access, efficiency
Proactive in identifying patient needs
Ensure patients have goals for their care and responsibility for Communication
Culture of continuous improvement Clear lines of authority/
responsibility and process fordecision-making
p yhealth related behaviorsProcesses assure smooth transition of care and communication between
id (
Team orientation
Patient-Centered Quality and
Efficient Care
providers (across continuum)
Work to top of licenseShare resources to maximize efficiency
Orientation and training
Aligned providers
Facilitate physician-physician communication
Facilitiesand Technology
Orientation and trainingStandardized roles and work flows
Facilities support teamwork, and efficient work flow
9/11/2011 ι 69THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
and efficient work flowTechnology facilitates aims of care modelSource: The Camden Group
The Care Team of the Patient-centered Medical Home
Primary Care Provider Care Management
Delegated“C t E ti ”Health Education
Patient-centeredMedical Home “Carve-out Expertise”Health Education Medical Home
Specialists Behavioral Health
Comprehensive Care ClinicsSocial Services
9/11/2011 ι 70THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Clinics
PCMH’s Paid in any Number of Ways
Can be paid for on a PMPM basis or DFFS Typical Sponsors are Capitated Medical Groups or Integrated yp p p p g
Hospitals CMS is conducting a PCMH Demonstration attempting to lower
Over all cost of careOver all cost of care Gainsharing is utilized to reward goal achievement based upon
actual savings seen against historical costsg g Most results have been marginal so far…..utilization gains
countered by demographic creep.
9/11/2011 ι 71THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
Questions and Discussion
R b t Mi ki FACHERobert Minkin, FACHESenior Vice President, The Camden Group
RMinkin@TheCamdenGroup.com949-300-6301
Lloyd A. BookmanPartner, Hooper Lundy & Bookman
Lbookman@health law comLbookman@health-law.com310-551-8185
Robert L. RothPartner, Hooper Lundy & Bookman
Rroth@health-law.com202-587-2590
9/11/2011 ι 72THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.
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