multi-payer reimbursement pilot overview of risk/benefit to practices l gordon moore md

Multi-Payer Reimbursement Pilot

Overview of Risk/Benefit to Practices

L Gordon Moore MD

Payer Participants

• Aetna• CIGNA• Community Health Plan of Washington• Group Health Cooperative• Molina• Premera Blue Cross• Regence Blue Shield• United Healthcare

Goal

• Primary Goal – to partially shift payment from the current fee-for-service model towards payment for improved outcomes.

• “Improved Outcomes” defined as: Reduced preventable emergency room visits and hospitalizations

Definitions

• Reduce preventable ED = Calculated using NYU ED Use Profiling Algorithm for patients attributed to the practice.

• Reduce preventable hospitalizations – calculated using AHRQ PQI methodology for patients attributed to practice.

Pilot Objectives

• Reduce preventable ER visits by 30%• Reduce preventable inpatient admissions by 10%• Pilot objectives are achievable as indicated by results from

other pilots nationwide.• New York City, 1998: 82% ER visits preventable• New Jersey, 2004: 47% ER Visits preventable• Tennessee, 2004: 51% ER visits preventable• Massachusetts, FY 2006: 47% ER visits preventable

Practice Targets

• Reduce preventable ER visits and inpatient admissions ,combined, by enough to cover the cost of investment in the pilot.

Participation Criteria

• At baseline, have some level of skill and facility in coordinating care – you have to get out of the gate fast or risk penalty (payback).

• Helpful attributes:• Current participant in WA PCMH collaborative• Prior WA DOH collaborative experience• NCQA “Level 1” PPC-PCMH recognition• A solid plan of action linked to outcomes

Helpful Core Capabilities

• Ability to:• Offer extended hours of access (evenings/weekends)• Offer care beyond “office visits” (i.e., phone, online)• Demonstrate tools and processes in place for chronic care

management (registry, outreach function & staff, etc.)• Follow-up ED/hospital discharge with a proactive and coordinated

team approach to care coordination• Demonstrate timely and actionable communication to your main

ED/hospital

How Much $?

• Two payment plans:• Plan 1• Plan 2

Plan 1

• Start of payment pilot: get case management bump:• Year 1: additional $2.50 PMPM• Years 2 & 3: PMPM drops to $2

• Shared savings based on difference of periods1, 2 & 3 from baseline (2 years prior to start) - Savings = going beyond the target set for your practice

Potential Shared Savings

• Any savings above PMPM earned in a year are shared 50/50 between payers and practice by adjusted PMPM in the following year.

• Shared savings for reductions in ER visits and hospital admissions beyond break-even levels will be distributed to participating practice groups only if they have met agreed upon quality performance measures.

Plan 1

investment

• If savings exceed the initial investment then they are shared between practices and plans 50/50

Savings from preventable ED and hospital visits

Shared savings

Quality Performance Measures

• Staying healthy (HEDIS)• Screening for Breast Cancer (women, age 52-69)• Screening for Cervical Cancer (women, age 21-64)• Screening for Colon Cancer (men/women, age 50+)

• Managing chronic conditions (chart review? registry?)• Diabetes (HbA1c testing, cholesterol testing, nephropathy

screening)• Heart Disease (cholesterol testing, cholesterol lowering

medication)• Depression (medication adherence at 12 wks. and 6 mo.)

• Experience measures (surveys by practice? health plan?)• Patient/Family experience measures• Provider and staff experience measures

Plan 1 Performance Scenarios

Assumption for Plan 1 Performance Scenarios:Attributed patients = 1000

Year 1 PMPM payments = 1000 Pts x $2.50 PMPM x 12 months = $30,000

Scenario A: No Improvement• Year 1 performance = 100 ED visits• Year 1 savings = 0 prevented visits x $1,500/visit = $0• Year 2 adjustment = $30,000 year 1 PMPM x .50 = $15,000• Year 2 PMPM rate = $2.00 PMPM base rate x 12 months = $24,000

- $15,000 adjustment = $9,000/12 months = $750/1000 pts

= $0.75


Scenario B: Improvement < 50% PMPM• Year 1 performance = 97 preventable ED visits• Year 1 savings = 3 prevented ED visits x $1,500/visit = $4,500• Year 2 adjustment = $30,000 year 1 PMPM - $4,500 savings = -

$25,500

(Stop loss @ 0.50 PMPM = $15,000)

• Year 2 PMPM rate = $2 PMPM base x 12 months = $24,000

-$15,000 adjustment = $9,000/12 months = $750/1000 pts

= $0.75


Scenario C: Improvement >100% PMPM• Year 1 performance = 70 preventable ED visits• Year 1 savings = 30 preventable visits x $1,500/visit =

$45,000• Year 2 adjustment = ($30,000 PMPM - $45,000) savings =

$15,000• Year 2 PMPM rate = $2 base rate x 12 months = $24,000

+($15,00 x .50 = $7,500) = $31,500/12 months =$2625 $/month/1000 pts

= $2.63

>50% of PMPM savedPlan 1

PMPM investment


No shared savings

50% of PMPM exceeded by savings

Next year’s PMPM investment

Change in PMPM

Same goal for savings

• If total savings do not exceed the initial investment there are no “shared savings” between practices and plans• If savings exceed 50% of PMPM but still fall short of break even, the practice faces a reduction in PMPM investment the next year• For years 2 and 3 shared savings occur once savings exceed $2.00 PMPM investment

Break even

< 50% of PMPM savedPlan 1

PMPM investment


No shared savings

< 50% of PMPM saved


Reduction in PMPM – 50% of previous PMPM


• If savings do not exceed the initial investment then there are no shared savings between practices and plans• Both practices and plans are limited in their losses to 50% of PMPM• For practices, the PMPM is reduced by 50% in the next year• Shared savings occur when the savings for the next year exceed $2.00 PMPM for years 2 and 3

PMPM investment Savings from preventable ED and hospital visits

No shared savings

50% of PMPM exceeded by savings


Change in PMPM


PMPM investment Savings from preventable ED and hospital visits

No shared savings

< 50% of PMPM saved



Practice 1

Practice 2

Change in PMPM

Potential Downside/Risk

• If savings are less than PMPM in a year, payment is reduced by the amount of the shortfall up to ½ PMPM, by downward adjustment of following year’s PMPM

Plan 2

• The “No Up-Front $” Plan• Premise: shift FFS $ to a PMPM so the practice can

choose to work as it sees fit• Virtual visits instead of office visits• Case management and outreach

• Shared savings just like Plan 1 (with one twist to help the practice)• The first $2.50 PMPM (yr 1) of savings goes 100% to practice ($2

PMPM yrs 2 & 3)• Beyond that: 50% share (like Plan 1)

Savings

Both plans and practices have limits on losses to 50% of the PMPM invested that yearPlan 1 – plans receive savings firstPlan 2 – practices receive shared savings firstBoth practices and plans split shared savings once break even point exceeded

Yearly PMPMinvestment


Break even

Plan paid first

Shared savings

Yearly PMPMinvestment


Break even

Shared savings

Practice paid first

Plan 1 Plan 2

Which Plan is Right for You?

• For more information, see the advisory letter in your application packet.

multi-payer reimbursement pilot overview of risk/benefit to practices l gordon moore md

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