bundled payments: what to expect, how to prepare...clinical mgmt. / quality post acute / network...

Florida Hospital Association ● Bundled Payments Webinar ● February 5, 2015

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Confidential and proprietary. Do not distribute or copy.

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Bundled Payments: What to Expect, How to Prepare

February 5, 2015

FHA Partners in Education Series



Confidential and proprietary. Do not distribute or copy. 2

Introductions

Donna J. Cameron, FACHE Managing Director,

Post Acute Care

317.341.3389

[email protected]

Chuck Peck, M.D. Managing Director,

Clinical and Operational

Effectiveness

678.845.7661

[email protected]

Rich Bajner Managing Director,

Value Transformation

773.837.7724

[email protected]

Paul Keckley, Ph.D. Managing Director;

Navigant Center for Healthcare

Research and Policy Analysis

312.583.3672

[email protected]




Definition of Bundled Payments

Payer

Physician Hospital Ancillaries Post Acute

$ $ $ $

Payer

Physician Hospital Ancillaries Post Acute

$

FFS Current Model Bundled Payment Model

“ A single payment to providers or health care facilities (or jointly to both) for all services to

treat a given condition or provide a given treatment.”

35% 15% 10% 40% Sample -->

1 Background and Landscape




News Release

U.S. Department of Health & Human Services

News Division

202-690-6343

[email protected]

www.hhs.gov/news Twitter @HHSMedia

FOR IMMEDIATE RELEASE Monday, January 26, 2015

Better, Smarter, Healthier: In historic announcement, HHS sets clear goals and timeline

for shifting Medicare reimbursements from volume to value

In a meeting with nearly two dozen leaders representing consumers, insurers, providers, and business leaders, Health and Human Services Secretary Sylvia M. Burwell today announced measurable goals and a timeline to move the Medicare program, and the health care system at

large, toward paying providers based on the quality, rather than the quantity of care they give patients.

HHS has set a goal of tying 30 percent of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements by the end of 2016, and tying 50 percent of payments

to these models by the end of 2018. HHS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 through programs such

as the Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs. This is the first time in the history of the Medicare program that HHS has set explicit goals for alternative payment models and value-based payments.

News Release

U.S. Department of Health & Human Services

News Division

202-690-6343

[email protected]

www.hhs.gov/news Twitter @HHSMedia

FOR IMMEDIATE RELEASE Monday, January 26, 2015

Better, Smarter, Healthier: In historic announcement, HHS sets clear goals and timeline

for shifting Medicare reimbursements from volume to value

In a meeting with nearly two dozen leaders representing consumers, insurers, providers, and business leaders, Health and Human Services Secretary Sylvia M. Burwell today announced measurable goals and a timeline to move the Medicare program, and the health care system at

large, toward paying providers based on the quality, rather than the quantity of care they give patients.

HHS has set a goal of tying 30 percent of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements by the end of 2016, and tying 50 percent of payments

to these models by the end of 2018. HHS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 through programs such

as the Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs. This is the first time in the history of the Medicare program that HHS has set explicit goals for alternative payment models and value-based payments.

Currently, 20% of current Medicare

FFS payments use an alternative

payment model (including ACO,

and bundled payment)*

• ACO: ~70%

• Bundles: < 5%

• Advanced Primary Care: ~10%

• Other: 15%-20%

Announcement indicates new

round of initiatives required to

increase VBP spend

* http://www.cnbc.com/id/102368657


http://www.cnbc.com/id/102368657

http://www.cnbc.com/id/102368657




BPCI Background – Model Alternatives

5





Anatomy of a Bundled Payment

6

1%

56%

8%

35%

Allowed by Phase- Client

Pre

Trigger

Re-Admit

Post

$0.0K $2.0K $4.0K $6.0K $8.0K $10.0K $12.0K $14.0K

Pre

Trigger

Re-Admit

Post

Allowed/Episode

Ph

ase

of

Ep

iso

de

Client- Allowed/Episode by Phase and Place of Service

IP OP Prof SNF HH ASC IRF Psych DME

43% of episode post-

discharge + readmission Joint Replacement Sample Spend Drivers Across an Episode

• Pre: Look back period for services direct before the trigger event (e.g. pre-surgical testing)

• Trigger: Event that initiates the bundle (e.g., an admission)

• Re-Admit: Readmission post discharge

• Post: Post acute care, including HH, SNF, IRF, LTACH

Allowed by Phase Allowed by Phase & Place of Service

Ph

ase

of

Ep

iso

de

Post

Re-Admit

Trigger

Pre

Allowed / Episode

Pre

Trigger

Readmit

Post





More than 6,900 Providers Have Indicated Interest

in Bundling and Required to Transition to ‘At Risk’ in 2015 (with at least 1 episode project)





Capability Requirements and Readiness Assessment

Quality

Care Coordination

Post-Acute

Network

Physician

Alignment

Patient

Engagement

Cost

Accounting -

Finance

Technology &

Reporting

Governance

&

Management

Care

Coordination Capability

Requirements

2 Preparing for Success




Phase People, Process, Technology

1 Assessment • Capability / roles / responsibilities ● Adequate volumes / savings opportunity

• Gaps in care ● Strategic & physician alignment

• Necessary data / analytics ● Competitive positioning

2 Design • Vision and goals ● Implementation teams

• Care / operational model ● Gain share distribution model

• Contracting requirements ● Technology support

• Network design ● Formulary design

• Disease management ● Quality metrics

3 Implementation • Change management ● Transitions in care

• Physician engagement ● Discharge planning

• Risk stratification ● Technology enablement

• Network partners ● Quality of care

• Financial / audit process

4 Monitoring /

Evaluation

• Monthly reporting ● Quality performance

• Executive scorecards ● PAC scorecards

• Physician scorecards ● Gain share earnings

• Audit functions ● Public reporting

9

Key Steps – From Assessment through Monitoring





Detailed Assessment Process to Identify Conditions

for Bundling

Deep Dive / Final Selection:

Financial model indicates margin

opportunities

Organizational commitment

Executive Team approval

Internal Data Filtering:

Volume threshold > 50 cases

Organizational filters:

• Leadership support

• Market position

• Clinical leadership

• Indications that market

accelerating towards VBP (MA

penetration, CMMI

participation, demographics)

Physician champion willing to

help design bundle and get buy-in

from physician counterparts

Use of CMS to Filter:

Specific performance

opportunities identified

• Cost / episode

• Readmissions

• PAC utilization

Physician practice variation

opportunities exist

Limited number of physicians

drive total volume

Physician champion willing to

help design bundle and get buy-in

from physician counterparts


Assessment




Executive Sponsor

Service Line Teams Physician Champion

Project Manager

IT / Analytics / Finance

Clinical Mgmt. / Quality

Post Acute / Network

Legal

11

Organizing for Success

Design and Implementation Work Teams / Groups Roles and Responsibilities

• Decision authority

• Support required to drive necessary change

• Engage with senior physicians and clinical leaders

• Work group leadership / project management

• Design care model / metric selection

• Performance evaluation and change management

• Coalition building

• Monthly analytics

• Quality of care monitoring & performance

• Gain share distribution funds flow

• Care redesign

• Compliance

Senior

Management

Day-to-Day

Leadership

Support/

Enablers/

Functions

Key Responsibilities


Design




Implementation

(See next slide for sample details) Design

Sample Plan from Assessment through Implementation

November December January February March April May June

11/1 11/15 12/1 12/15 1/1 1/15 2/1 2/15 3/1 3/15 4/1 4/15 5/1 5/15 6/1 6/15

Assessment

- Key Milestones - Project Governance Meetings

#1

Develop work plan / process

• Detailed work plan

• Work groups up and running

• Clinical protocols

• Network design

• Scorecard reports

• Funds flow / gain share model

• Roles / responsibilities /

decision rights

Scorecard / financial

model

• Savings analysis

• MD champion

• Cost / episode

• # MDs

• PAC utilization

• PAC performance

• Budget models

#3

GO

NO GO

Clinical implementation

• Care protocols

• Physician engagement

• Patient engagement

• Monthly leadership

meetings

• Quarterly MD meetings

• Post acute partnerships

• Learning lab

Go Live

Go vs

No Go

#2

Select

Conditions

#2 #1

Initial filtering based

on internal data

• Adequate volumes

• Key markets

• Leadership support

• Clinical support

#4

Work Plan

Financial implementation

• Monitoring tools

• Gain sharing account

and funds transfer

process

• Automate funds flow

• Scorecard analysis

• Internal cost accounting

• Audit

#3

#6

Implementation

Protocol

#4


Implementation

#5 #6

“Excelerate’

Sessions

12




Sample Clinical and Operational Effectiveness Plan

Establish

Process and

Organization

Month 1-2

Operationalize Initiatives and Clinical Effectiveness

Months 2-12

Ongoing

Improvement

Navigant’s implementation process :

eek

1 2 3 4 5 6 7 8 9 10 11 12

0% 0% 5% 5% 5% 10% 10% 10% 10% 10% 15% 20%

Projected Percent of Implemented Savings Opportunity per Month

» Establish Senior

Leadership Committee

» Establish COE

Condition Teams and

Processes

» Prioritize Opportunities

» Establish project

timetable and

consensus on final

work plan

» Initiate work plan tasks

» Engage clinical leaders to achieve buy-in to goals and opportunities

» Define the evidence based practices in specific clinical condition, including metrics for quantifying

performance

» Redesign the care delivery processes to ensure all patients get every best practice

» Reduce the variability in the delivery of clinical care across the continuum

» Eliminate preventable complications

» Improve clinical outcomes

» Reduce the cost to treat

» Initiate consistent update meetings (typically, MD leaders meet 1x / month

and full clinical team 1x / quarter as BPCI initiatives are mobilized)

» Manage and monitor

performance

» Stabilize new

initiatives through

re-aligning roles and

responsibilities

» Ongoing

improvement


Implementation

Keys to Success:

• Teamwork

• Change Management

• Leadership

• Communication

13




While different conditions will require different strategies, Navigant clients have recognized

significant savings through the execution of some key strategies.

Success Factors for Managing Care Across an Episode

M.D. Leadership

• Aggressively manage discharge process, align post acute providers, share

performance results

• Integrate patient segmentation to discharge planning, including appropriate post-

discharge patient outreach/patient engagement

• Dedicated physician champion to lead care redesign process and physician

engagement

• Clinical practice variation and continuum care management process between

physicians, MAs, NPs, PAs

• Use of data to pinpoint opportunities, monitor improvements and engage

clinicians


Care Redesign

Risk Segmentation

Post Acute

Alignment

Information &

Analytics

Focus on Patient

Change

Management • Clarity in vision, effective process and governance, consistent communication

• Map out and manage process pre-admission through end of episode

14




Current Future

Medicare Lots of interest, few at risk Transition providers to risk model

Roll out oncology bundle

Evaluate site neutral bundle

Monitor success

DRG alternative?

Medicaid Few bundled payments Evaluate OB opportunities

Focus on dual eligible, largely through expanded

PCP models

Commercial Lots of discussion, early

growth stage

Look beyond joints

Solve adjudication requirements

Consider pharma opportunity

Integrate into ACO offerings

Large

Employers

Early focus on cardiac and

joints

Align to high quality providers

National partnerships

15

View of the Future

What’s Next 3




» Total allowed/episode

decreased by 10%, or $2,246,

from Phase 1 to Phase 2

» 79% of the decrease was driven

by a reduction in PAC

» PAC allowed/episode decreased

by 24%, or $1,767, from Phase 1

to Phase 2

Case Study: Successful Implementation

$13,720

$14,206

$5,641

$7,408

$K $5K $10K $15K $20K $25K

Pha

se 2

P

hase

1

Allowed/Episode by Phase

Anchor PAC Readmission

$10K

$12K

$14K

$16K

$18K

$20K

$22K

$24K

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec*

Total Allowed per Episode

*

4 Case Study

16




Managing care across the continuum through focused transitions in

care strategy and post-acute partnerships

Phase 1

Average

Phase 2

Average Δ % Change

% of episodes w/ SNF 20% 26% 30%

Days per SNF stay 17.7 13.8 -4.0 -22%

SNF allowed per episode $1,782 $1,881 $99 6%

SNF allowed per SNF episode $8,367 $6,681 -$1,686 -20%

Phase 1

Average

Phase 2

Average Δ % Change

% of episodes w/ IRF 21% 11% -48%

Days per IRF stay 12.3 13.5 1.2 10%

IRF allowed per episode $2,735 $1,510 -$1,225 -45%

IRF allowed per IRF episode $13,122 $13,833 $711 5%

Phase 1

1/2013 - 9/2013

Phase 2

10/2013 - 12/2013 % Change

Preferred SNF

Provider

% of SNF

Stays

SNF Days

per Stay

SNF

Allowed

/Stay

% of SNF

Stays

SNF Days

per Stay

SNF

Allowed

/Stay

% of SNF

Stays

SNF Days

per Stay

SNF

Allowed

/Stay

No 90.1% 17.7 $8,339 73.5% 14.8 $7,268 -18% -16% -13%

Yes 9.9% 18.2 $8,623 26.5% 10.9 $5,055 167% -40% -41%

Grand Total 100.0% 17.7 $8,367 100.0% 13.8 $6,681 0% -22% -20%

17

4 Case Study




Physician variation analysis pinpointed opportunities and created

burning platform for individual physician behavior change

Notes:

Physician education into

performance critical to

achieving buy-in for

success

Including transparency in

drivers of performance

Physician Practice Variation Individual physician performance on internal costs, episodic costs and quality metrics

4 Case Study

18

bundled payments: what to expect, how to prepare...clinical mgmt. / quality post acute / network...

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