p o cms’ m c joint replacement (ccjr) p m s€¦ · •home health •snf 3-day rule...

PREPARING YOUR ORGANIZATION FOR CMS’ MANDATORY COMPREHENSIVE

CARE FOR JOINT REPLACEMENT (CCJR) PAYMENT MODEL: WHERE TO

START

Steven Shill CPA

Paul T Gallese PT, MBA

William Bithoney MD, FAAP

January 21, 2016

BDO CENTER FOR HEALTHCARE EXCELLENCE & INNOVATION

Page 2

Agenda and Acknowledgements

Page 3

Agenda

1. Program Architecture and Program Element Descriptions (The Where, What, and Why)

2. Care Model Redesign (The Now)

3. Pathway for Positive Reaction (The How)

Page 4

The CJR ProgramAn Immediate Future State

Page 5

Complexity: Golf Swing Considerations

Page 6

Program Architecture

Program Architecture

• DRG 469 and 470 are included

• Frame of reference: 90 day DRG payment for which the hospital is

entirely responsible

- Providers bill Medicare directly at current fee-for-service rates

- Claims aggregated based on an index admission

- Cost reconciled post discharge

- Savings distributed to providers; losses paid back to CMS

• This is a mandatory program with an April 1 2016 start date

Although this program resembles CMS’s BPCI program,

there are material differences that need

to be understood and considered

Page 7

Program Structure

42 CFR Part 510, Subparts AK*

•Performance Years

•Geography and Coverage

•Program Episodes and Inclusion CriteriaMarket and Timing

•Episode Target Price Calculation

•Reconciliation Process

•Other CMS Program Payments

Pricing and Payment

•Required Quality Measures

•Required Reporting, ABN Requirements and Beneficiary Choice

•Impact of Quality Measures on Reconciliation PaymentsQuality Measures

•Allowed Financial Arrangements

•Gain sharing distributions

Gain Sharing Arrangements

•Home health

•SNF 3-day rule

•Telemedicine

•Post-operative billing

Waivers

*WWW.FEDERALREGISTER.GOV

Page 8

Market and Timing

• Mandatory program—all hospitals in the total joint business in these MSAs are included

• 794 Hospitals in 67 MSAs (107,037 episodes in our data cohort)

• Five “performance years” start 1 April 2016

Page 9

Inclusions and Exclusions §510.200 210

Included

• 90 day episode

• Physician Services

• Inpatient Services (includes readmissions)

• IPF, LTACH, IRF, SNF, HHA services

• Hospital OPD (including rehab services)

• Clinical Lab Services

• DME

• Drugs and biologics

• Hospice Services

Excluded

• MA program participants

• “Live” BPCI program participation

• Items and services unrelated to the anchor

hospitalization

• Certain unrelated chronic conditions• Oncology

• Medical Trauma

• Chronic surgical diseases

• Acute surgical diseases

• Clotting factors

• Pass through payments for medical

devices

• New technology add-ons

Items services and costs included in the episode

attributed to the HOSPITAL that is responsible for the

“Anchor Admission”

Page 10

Regional Spend DRG 469

Southern

California:

$52,841

7.0d

Page 11

Regional Spend DRG 470

Southern

California:

$40,678

3.4d

Page 12

Pricing and Payment § 510.300 325

Performance

Year*PY 1 PY 2 PY 3 PY 4 PY 5

Hospital Price

Weight66.6% 66.6% 33.3% 0% 0%

Regional Price

Weight33.3% 33.3% 66.6% 100% 100%

Risk Exposure Upside

Upside only,

limited

Downside

Upside,

limited

Downside

Full upside

and downside

Full upside

and downside

Quality Score

ImpactNone .5% 2% .5% 2% 1.5% 3% 1.5% 3%

Loss and Gain

Caps

0 Loss

Gain cap 5%

5% loss

5% gain

10% loss

10% gain

20% loss

20% gain

20% loss

20% gain

Cost Index Years 1214 12 14 1416 1416 1618

*PY 1 starts 1 April 2016

Page 13

Pricing and Payment: Illustrate Potential Impact

Hospitals nationally could collectively lose over $115 million if they

choose to maintain the status quo

• Use Pacific Region Target Prices

• No credit for historical performance

• Representative sample

• 95 hospitals in the So Cal CJR cohort

MS-DRG Total SpendTarget Price

(Pacific Region)NPRA/case

Expected

Volume (n) Total NPRA

469 $52,841 $48,874 ($3,967) 563 ($2,233,421)

470 $40,678 $23,424 ($17,254) 6,567 ($113,307,018)

TOTAL ($115,540,439)

Average estimated exposure for So Cal CJR hospitals: $1.2 million per facility

Page 14

Pricing and Payment: Payment Mechanics

What is at stake for my hospital?...arriving at the NPRA…

1. CMS aggregates all of the payments for the care episode

2. Multiply the episode target price by the number of episodes during the performance year

3. Subtract results of Step 1 from Step 2

4. If NPRA is positive, hospital is ENTITLED TO A PAYMENT from CMS (subject to Hospital

achieving adequate quality criteria scores), repayment subject to stop gain percentages

in applicable PY.

5. If NPRA is negative, hospital REPAYS CMS equal to the negative NPRA amount (no

repayment in PY 1, repayment subject to stop loss percentages in applicable PY)

Page 15

Cost Variance: Co-Morbid Conditions (So Cal)

The Impact of Fracture as a

Co-Morbid Diagnosis

• Fractures comprise about

14% of major joint episodes

for all Medicare patients

• Fracture patients are more

complicated cases

— 2x readmission rate

— 2x PAC utilization

— Higher mortality

Page 16

Cost Variance: Post Acute Care Spend (So Cal)

Use RatesNational

DRG 469 %

So Cal

DRG 469 %

National

DRG 470 %

So Cal

DRG 470 %

SNF 66.0% 64.7% 42.4% 35.5%

HH 36.7% 41.2% 48.4% 65.3%

IRF 19.0% 17.6% 13.5% 3.6%

LTCH 3.2% 0.0% 0.4% 0.0%

Readmission Rate 30.8% 20.6% 12.2% 9.0%

Page 17

Cost Variance: Readmission Volume (So Cal)

Page 18

Cost Variance: Readmission Cost (So Cal)

Readmission exposure in

this data cohort invites

attention to post

discharge wound care

and respiratory disease

management

By spend, AMI is the most

prevalent but not the

most costly readmission

Page 19

Cost Drivers: PAC Utilization (So Cal)

Home Health v OP

PT?

Home Health v

SNF?

Page 20

Cost Variance Drivers: ED Utilization (SoCal)

LEJR patients

go to the ED

because they

fall

Page 21

Quality Measures § 510.400 410

Detail program quality measures that must be in place to participate

in the program

Program rules define quality measures required

• NQF 0166

• NQF 1550

• Consider adding NQF 1551 for quality control (not mandated)

Page 22

Beneficiary Notification Requirements

Hospitals in the CJR program are required to provide written notification to Medicare

beneficiaries:

• Notice that the hospital is participating in the CJR program

• Description of the hospital’s program

• List of collaborators, providers with whom the hospital has established relationships for

patient care under the program

• Acknowledgement that Medicare beneficiaries are entitled to receive care from any

Medicare provider

— Hospitals can label certain providers as “preferred”

• Individual CJR program beneficiaries may NOT opt out of data sharing

Page 23

Financial Arrangements § 51.500 515

The Final Rule describes allowed gain sharing arrangements between and among providers:

• Written agreements among “collaborators”

• Hospitals must update compliance programs to include oversight of the CJR program and

must create and approve written policies

• No inducements to limit care, no restrictions on patient choice or selection of equipment

• Hospitals may pay collaborators

— Must receive payment from the reconciliation payment

— Can include internal cost savings attributable to hospital care model redesign

• Collaborators must contribute to program design and care model redesign

• Payments made to group practices can only be shared with those physicians or other

providers that deliver care to CJR program beneficiaries (“practice collaboration agents”)

Lots of detail in the gain sharing rules….we advise having competent counsel

involved in the preparation and execution of gain sharing arrangements

Page 24

Regulatory Waivers § 510.600 620

CJR provides relief for certain, long standing, rules and regulations

• SNF 3-day rule

• Post operative billing restrictions

• Deductible and co-insurance applicable to reconciliation payments

• Beneficiary protection retained

— Choice maintained without restrictions

— Beneficiary notification requirements

There is a 20 page OIG waiver document that counsel should

review and integrate into your CJR program plan

Reacting Positively: Care Model RedesignData, Planning, Understanding

Page 26

Payment and Care Model: Current State

Hospital

DRG

Physicians

Medicare

Part B

Home

Health

HHPPS

60 Day

Episode

Skilled

Nursing

RUGS

Rehab

Services

IRF PPS

Hospice

RHC and

SIA

Pharma

Part D

Silos today: separate functions, separate payment systems

Page 27

Payment and Care Model: Bundle State

Bundles align services and payments…bundles

cross all the traditional lines

Risk Stratification, Care Transition, Care Coordination, Enabling Services

Index Admission

Post-Acute Care

Hospital

and

readmit

SNF, IRF

Home

Health,

Rehab

Enabling

ServicesPhysician

Services

Diagnostic

Services

BDO Center for Healthcare Excellence & Innovation

Page 2828

The “How-To”.…Curate the Care Process

1

2 Identify required process

change, care model redesign

Receive, process, analyze

data…build cost models

Operating systems,

dashboards, feedback,

reconciliation process

Secure collaborators,

”manage outside the walls”3

4

Data

Care Model

Clinical System

Operations

“Curate”

From the Latin root

“CURARE”

one responsible for the

care of souls


Page 2929


Page 3030

Data: Know and React

to Clinical and Fiscal Opportunities

Represents a single episode of care for illustrative purposes only


Page 3131

Care Model: “End-to-End” Systems;

Manage Inside and Outside the Hospital Walls

Develop an “end-to-end” clinical system

Internal (hospital processes)

• Understand, quantify, and manage inbound risk

• Standardize supply chain

External (person-centric care system)

• Understand, quantify, and manage outbound risk

• Develop and operate a post-acute care system

• Proactively manage care transitions

• Monitor post acute care workflow

• Create non-institutional contact points

Page 32

Care Model: Reduce Potentially Avoidable

Complications (PACS) Issues

Pre- surgical Patient History Education

Perioperative Blood Loss

Autologous transfusionDeep Vein Thrombosis and PE

Infection: Prophylaxis

Start/Stop

Develop Skill building Teams to Train MDs Especially

OutliersRehabilitation/Physiotherapy

Discharge Planning Begins pre-Admission


Page 3333

Care Model: Develop Pre Admission Packages

Pre-surgical screening: Prehab

MAR

Physiotherapist Assessment

Standard Nursing Assessment Including Complication Index, CPT And DRG

Therapy Referral Form

Lower Extremity Functional Assessment

Initiate Standardized Evidence Based CPG FOR ALL CO MORBITIES

Elements of Pre -Admission Packages


Page 3434

Clinical Systems:

Identifying PAC Use and Referral Patterns

Page 35

Clinical Systems: High Quality SNFs are a Must

1 Star 2 Star 3 Star 4 Star 5 Star

National 14.9% 19.8% 18.9% 23.5% 22.8%

N=15446 2307 3057 2926 3267 3529

LA 10.3% 20% 19.1% 23.7% 26.8%

N=560 58 122 107 133 150

OC 6.5% 25% 19.7% 28.9% 23.6%

N = 76 5 19 15 22 18

MSA 10% 20.5% 19.2% 24.4% 26.4%

N=636 63 131 122 155 168*

Note the spread between Star ratings…about 30% of SNFs in LA and OC MSA are

below quality score minimums to qualify for waivers under CJR.

About 40% are 3-Star rated or lower.The quality scores impact the ability of your

organization to collaborate with every SNF in the market. You need to be highly

selective about your partners in this program.

*Source: BDO analysis of CMS data


Page 3636

Clinical Systems: Plot Recovery Path


Page 3737

Preferred Networks: Invite Strong PAC Partners

Page 38

Clinical Systems: Develop Acute Stage Guidelines

• Develop Standardized Order Set

• Evidence based clinical algorithms across the episode (by CPT, HCPCS, ICD-10)

• Use Only Pre-approved Implants—one source

• Caregiver to Sign Each Order As Completed: Pre, Post-Op Checklists

• Document Each Variance From Standard Set With Reason For Variation

• Mobilization Beginning Post-Op Day 1

• Functional Assessments

• Connect with Home Care

• Avoid Rehab or SNF referral whenever possible (if necessary INCREASE LOS?)

Page 39

Operations: High Level Operating Schematic

Total Joint Case

Elective

Emergent

Pre-op

assessment &

“Pre-Hab”

Risk

Stratification

In-house visit

Program

enrollment

Low RiskHigh Risk

High Risk Track

Assigned Care Management

In-house dc planning

Close post-op following

Low Risk Track

Care pathway deployed

Telephonic post-op following

Work Flow PlatformResource delivery

Telephonic case following

Appointment scheduling

Medication reconciliation

Transportation

Enabling services

Program Discharge at

90-day mark

Page 40

Page 41

Operations: Track Program Performance

Thoughtful modeling, consistent reporting, and effective use of the ongoing program

data streams will contribute significantly to program success

• Create and maintain reasonable expectations about the program

• Measure and follow trends, intervene quickly

• Measure the performance of the PAC network

• Measure compliance with care models, care processes and established program guidelines

• Note and measure internal cost savings.

The program data delivered to your hospital allows you to

assess, report, and control your CJR program investment

Page 42

Operations: Model Gain Sharing and Communicate

• Collaborators need to be

actively engaged

• Communicate early and often

• Provide simple, meaningful

metrics

• Consider distributing

gainsharing on a rolling

average

• Calculate and consider

completion factors (IBNR)

SummaryHow to Win in the Bundle Payment Environment


Page 4444

Critical Success Factors

1. The CJR program is an exercise in regression to the mean…

CMS intends to lower both the overall cost and the cost variation for this procedure

2. As the Episode Initiator, the hospital becomes responsible for the sum total of the claims

cost for LEJR for 90 days...this constitutes an opportunity to redesign the care model for

this case type to optimize clinical outcome and financial result

3. Hospitals have a great deal of control over the care process and can, within the program

rules, deliver those resources that can assure positive clinical and financial outocmes.


Page 4545

Critical Success Factors

4. This is a new space for most hospitals nationally...

hospitals are learning how to “manage outside their walls”

5. Data is the key to success in this program...

you will need to develop or acquire the ability to process, analyze and distill the program

data into useful information that can track program progress.

6. Care management resources that hospitals typically support may not be adequate, as

currently configured, to manage the scope and geography of this program

The Way ForwardHow we Can Help


Page 4747

How We Can Help

Initial analyses

• Data: Analyze and use program data to model performance.

• Performance: Where are you leaking volume? How do you compare to national and

regional benchmarks?

• Network: What are your current referral patterns? With whom should you partner more

closely?

• Volume/Referrals: What is your share of wallet? where is it leaking? Drivers of leakage?

Program development and implementation

• Care planning: (including optimal PAC plan) at the pre-procedure stage

• Discharge planning: Facilitate optimal site of care, length of stay and most capable

provider for each patient and effect an e-referral for PAC


Page 4848

How We Can Help

Gain Sharing

• Design model and administer programs to align collaborators

Program Operations

• Financial projections

• Financial reconciliation

Abstract results/capabilities to support commercial bundle expansion

• Extend bundled payment operations expertise to other clinical processes and conditions


Page 4949

Program Development Process (Example)

Reacting effectively to the CJR program involves a deliberate, well coordinated effort that

requires a blend of data, analytics, care model redesign, modeling, and consensus building

within and outside the hospital walls.

1. Gather data

• CMS will provide program data; develop other data sources that can be analyzed in advance of

and parallel to the CMS data set

• The CMS data set requires competent assembly, it is not shipped in ready to use format

• CMS data delivery has been delayed in the past, access to bundle data prior to receiving your

organization’s data can provide a quick start for program analysis

2. Model program exposure

• Use the program and comparative data to model CJR program financial exposure

• Model post acute care cost exposure

• Identify potential collaborators

• Describe an optimal collaboration network


Page 5050


3. Assess internal care processes

• Develop a clear understanding of internal processes

• Develop a current state care model

• Include the post acute assets in the care model

4. Identify transition and care management assets and needs

• Assess current transition processes from the institution

• Critically review current care management practices and processes

• Traditionally constructed hospital case management assets will likely fall short of meeting

program needs

5. Develop a care model redesign process

• Having assessed care processes, conduct a gap analysis and develop a care model redesign

pathway

• Model potential gains against initial program model


Page 5151


6. Develop the post acute care collaboration network

• Secure a range of collaborators that have been identified through the data analysis as potentially

effective

• Invest collaborators in the care model design

• Develop and execute collaboration and gain sharing agreements with selected partners

• Harmonize program elements with institutional governance requirements

— ABN notification modification

— Compliance program and governance oversight

7. Develop operating infrastructure for program support

• Assemble operating infrastructure components including care management workflow platform,

performance dashboards

• Develop a rolling reconciliation process based on quarterly data feeds from CMS


Page 5252

“When science finally locates the

center of the universe, some people

will be surprised to learn that they

are not in it.”

Yogic Wisdom

BiosBDO Professionals


Page 5454

William Bithoney, MD, FAAPBDO Center for Healthcare Excellence & Innovation

Chief Physician ExecutiveDr. Bithoney has more than 25 years of experience serving as a physician executive in diverse academic and hospital

systems, specializing in the development of ACOs, Medicare Advantage clinical programs, physician alignment strategies,

managed care strategies, academic and research program development, as well as performance and quality improvement

programs. He worked for 17 years at Boston Children’s Hospital/Harvard University School of Medicine. In that span, he was

named Senior Associate in Medicine, Associate Professor of Pediatrics and Chief of General Pediatrics Primary Care. Senior

Associate in Medicine is the highest clinical appointment available at Harvard Medical School. Dr. Bithoney has served as

Professor at SUNY Health Sciences Center, Brooklyn as well as both Professor and Vice Dean of NY Medical College. He has

also served as CMO of a number of multihospital health systems with revenue between $1 billion and $2.5 billion/annum.

Dr. Bithoney has advised on ACO and physician alignment strategy for Signature Health System and UMass Memorial Health

Care. While serving as CEO of the Sisters of Providence Health System in Massachusetts he managed a Medicare Advantage

(MA) program which was independently rated as following “best practices for physician engagement and alignment

strategies”. While at Sisters of Providence Health System (SPHS), he also served not only as Interim President & Chief

Executive Officer (CEO) but also as Chief Operating Officer (COO) & Chief Medical Officer (CMO). Following the successful

development of an ACO and Medicare Advantage program at SPHS, he and his team turned SPHS into the most profitable

community hospital in the state, despite being in the most impoverished City in Massachusetts. In 2010, Dr. Bithoney and

his team won the Innovation Award from the American College of Healthcare Executives for their ACO work managing a

healthcare system and an award winning full-risk full-capitation MA program. That same year, SPHS was named one of the

Top 100 Hospitals in the United States for quality and value by Cleverly and Associates. Subsequently SPHS was named a

100 Top Hospital in the US for 3 consecutive years.

EDUCATION

M.D., School of Medicine, Yale University

A.B., Molecular Biology, Harvard College, magna cum laude

[email protected]: 212-885-8206Mobile: 413-530-1777

100 Park Avenue New York, NY 10017


Page 5555

Paul Gallese, PT, MBABDO Center for Healthcare Excellence & Innovation

Senior Clinical Fellow

Mr. Gallese has more than 35 years of healthcare experience, serving as an operating executive, restructuring specialist,

value creation advisor, and consultant working with hospitals, health systems, academic medical centers, health insurers,

private equity sources, and bundled payment infrastructure providers. focusing on program development, asset

development, asset repurposing, program design,revenue growth, physician engagement, and clinical excellence.

Prior to joining BDO, Mr, Gallese served as the Chief Operating Officer of Liberty Health Partners, a national awardee

convener in the CMS BPCI program. Mr. Gallese is also the Managing Principal of Inner Circle Health Advisors, a value creation

advisory firm that focuses on new and early stage healthcare technology companies. He is also serves as a Senior Clinical

Fellow in the BDO Center for Healthcare Excellence and Innovation. Mr. Gallese started his career as a Physical Therapist and

Pathokinesiologist working primarily with elite Olympic and professional athletes.

Mr. Gallese has served in several executive leadership roles both permanent and interim for healthcare organizations

nationally. He has completed several development, restructuring, new asset development and program development

efforts, some of which are listed below.

Senior Director at Alvarez & Marsal

CEO, Community Health Plan of Washington

Senior Consultant for The Lewin Group

Executive Director, Einstein Practice Plans

SVP, Network Operations for Salick Cancer Centers

Associate Administrator for USC University Hospital

EDUCATION

PT, Marquette University, Milwaukee, Wisconsin (emphasis on Neurosicences and Pathokinesiology

MBA, Pepperdine University, Malibu, CA (emphasis on finance and business systems)

[email protected]: 216-496-4577

100 Park Avenue New York, NY 10017


Page 5656

Steven Shill

BDO Center for Healthcare Excellence & InnovationU.S. National Healthcare Industry Lead Partner

Steven has more than 22 years of public accounting and consulting experience with two global accounting/consulting

firms serving a variety of publicly and privately held companies (including nonprofits and NGOs) in the healthcare,

finance, and insurance, sectors. During this period he also spent a number of years working in private industry as a

senior manager of an actuarial/risk management consulting subsidiary of a multi-national publicly traded company.

Steven extensive experience in in public accounting and consulting has seen him serve hospitals, nursing homes,

medical insurance plans, physician groups, dental organizations and other healthcare related industries, such as drug

testing, pharmaceuticals, urgent care services, surgery centers, and behavioral health providers. Steven’s services to

healthcare organizations include audits (inclusive of SEC and SOX compliance), risk assessment consulting, financial

feasibility and debt capacity studies, internal control reviews and various other consulting services such as litigation

support. Steven’s role in litigation support has included serving as an expert on the Medicare Advantage Program

including participation in depositions. Steven also has restructuring experience and has provided audit services to

healthcare organizations in bankruptcy

Steven is head of BDO USA’s West Region healthcare team and also serves as its National Healthcare Industry Lead

Partner and a leader at BDO’s Center for Healthcare Excellence &Innovation. He routinely presents on healthcare

topics at various forums nationally in the US including a series on Audit and Accounting Risks for the Healthcare

Industry as well as a series on Healthcare Reform. He is an active member of the Healthcare Financial Management

Association and most recently he was a guest speaker at their US national meeting.

EDUCATION

Post Graduate Honors Degree in Accounting Science – University of South Africa

B.S. in Commerce – University of the Witwatersrand

Chartered Accountant-South Africa

Certified Public Accountant -California

[email protected]: 714-668-7370

3200 Bristol StCosta Mesa, Ca. 92929

Page 57

Data CollaboratorOwned Outcomes


Page 5858


Page 5959

The BDO Center for Healthcare Excellence & Innovation

DRIVING THE FUTURE OF HEALTHCAREThe BDO Center for Healthcare Excellence & Innovation is devoted to helping healthcare organizations thrive, clinically and financially. We help

clients redefine their strategies, operations, and processes based on both patient-centric demands and rigorous best business practices – responding

to the industry’s new market disrupters, cost pressures, and outcome-based reimbursement models.

The Center is built to meet the current and future needs of providers, payers, and investors. We are accomplished, senior-level specialists, who

approach every challenge from multiple perspectives, collaboratively, in spirit and in practice. Drawing on the full extent of the BDO network, we

are uniquely able to meet the specific needs of each client, no matter how large or complex.

Healthcare Executives Clinical Practitioners Valuation Professionals Turnaround / Restructuring Advisors

Investment Bankers Economists & Statisticians Auditors IT Specialists / Data Analysts

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