understanding the new risk based value component of ... · win $200 16 gainsharing and risk with...
TRANSCRIPT
11/11/2015
1
1
Understanding the New Risk Based Value Component of Reimbursement
Allison Keitt Luke, JD, CHCPrincipal, AK Luke, LLCHealthcare Compliance ConsultingAsheville, NC
Ethan Bachrach, MD, MBI, FACEPChief Medical Informatics Officer TeamHealthKnoxville, TN
2
Why are we transitioning to value based reimbursement?
The United States has non-sustainably increasing costs in healthcare…
and relatively poor healthcare compared to leading wealthy countries*
The Commonwealth Fund, U.S. Health Care from a Global Perspective: Spending, Use of Services, Prices, and Health in 13 Courtries (October 2015) http://www.commonwealthfund.org/~/media/files/publications/issue-
brief/2015/oct/1819_squires_us_hlt_care_global_perspective_oecd_intl_brief_v3.pdf
** Data from The Commonwealth Fund, Mirror, Mirror on the Wall, 2014 Update: How the U.S. Health Care System Compares Internationally (Accessed 8 October 2015) http://www.commonwealthfund.org/publications/fund-
reports/2014/jun/mirror-mirror
Overall Healthcare Ranking
United
States
11/11/2015
2
3
From: Congressional Budget Office, The 2015 Long-Term Budget Outlook (June 2015),
https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/50250-LongTermBudgetOutlook-4.pdf
Distribution of Spending for Health Care, 2013
$2.8 trillion
4
From: Congressional Budget Office, The 2015 Long-Term Budget Outlook (June 2015), https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/50250-LongTermBudgetOutlook-4.pdf
Projected increases in Medicare costs are attributable to:Rising costs per beneficiary
per capita medical costs are projected to grow more rapidly than growth in the per capita GDP
Rising enrollment in the Medicare program, due to an aging population85% of beneficiaries are over 65 years of age
11/11/2015
3
5
From: Congressional Budget Office, The 2015 Long-Term Budget Outlook (June 2015), https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/50250-LongTermBudgetOutlook-4.pdf
Continuing decline in revenue for discretionary spending
Medicare’s Dedicated Taxes and Offsetting Receipts
as a Share of Medicare Spending
Percentage of Gross Domestic Product (GDP)
6
From: Congressional Budget Office, The 2015 Long-Term Budget Outlook (June 2015), https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/50250-LongTermBudgetOutlook-4.pdf
11/11/2015
4
7
From: Congressional Budget Office, The 2015 Long-Term Budget Outlook (June 2015), https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/50250-LongTermBudgetOutlook-4.pdf
8
From fee-for-service to payment for value
• This is a financial response to a financial problem, and it is creating a fundamental shift in how providers and healthcare systems are being measured and reimbursed
• ‘Poor’ healthcare is expensive, and this financial realignment is driving U.S. healthcare to realign with a new definition of ‘good’ healthcare
11/11/2015
5
9
The ‘new’ FFS value matrix
How
expensive
is the care?
What is the quality
of the care?
Neutral
Highest
Reimbursement
Lowest
Reimbursement
High
Low
LowHigh
10
Quality programs impacting traditional fee-for-service revenue
Healthcare Professional Hospital
11/11/2015
6
11
Quality programs impacting traditional fee-for-service revenue
Healthcare Professional
9% FFS Risk
4% FFSRisk
9% FFSRisk
12
The transition from FFS to alternative payment models
Category 3 APMs (on FFS architecture)
• Accountable care organizations (ACOs)
• Bundled payments (BPCI and CCJR)
• Medical homes
• Comprehensive primary care
Payment linked to effective population management,
or management of an episode of care. Payments are
triggered by delivery of services, but with opportunities
for shared savings or risk
Category 4 APMs (population based)
Payment is not triggered by service delivery, therefore
no linkage to volume. Organizations and/or providers
are paid and responsible for the care of individuals for
>= 1 year periodsCMS, Better Care. Smarter spending. Healthier People: Paying Providers for Value, Not Volume
(Accessed 9 October 2015) https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-
Fact-sheets-items/2015-01-26-3.html
11/11/2015
7
13
Bundled Payment
Care Initiative
(BPCI)
A voluntary program, where
provider groups and/or health
systems may sign up for
opportunities for gainsharing,
with concomitant financial risk,
with CMS.
Organizations sign up for one of
four models, and one to many
choices of ‘bundles’ related to
MS-DRG codes.CMS, Where Innovation is Happening (Accessed 13 October 2015) http://innovation.cms.gov/initiatives/map/index.html#model=bpci-initiative-
model-1+bpci-initiative-model-2+bpci-initiative-model-3+bpci-initiative-model-4
14
BPCI Models
CMS, Bundled Payments for Care Improvement (BPCI) Initiative: General Information (Accessed 13
October 2015) http://innovation.cms.gov/initiatives/Bundled-Payments/index.html
11/11/2015
8
15
BPCI automatically reduces payer costs
CMS sets a ‘target’ price based upon historical costs of a care bundle of care. This is generally 2-3% below the historical costs for the bundle
For retrospective models, there is a quarterly reconciliation that occurs 60 days following the end of a quarter
$10,000
$9,800
Average
Medicare
Costs
Target Price
CMS
Automatic
Win
$200
16
Gainsharing and risk with BPCI models
11/11/2015
9
17
Comprehensive care for joint replacement (CCJR): The ‘Mandatory’ Bundle
Starting January, 2016 approximately 25% of elective hip and knee replacements in the United States will be covered under a mandatory bundled payment model by CMS
Hospitals will have no choice, but to go at risk for the total cost of acute and post-acute care
CMS is selecting 75 geographic areas, and will apply this to all acute care hospitals within those areas
Works similarly to the BPCI models, except applies only to hospitals and a small set of MS-DRGs
18
Changes to the regulatory environment for bundled payment models: possible new risks
Waivers to the ‘3 day rule’ for becoming eligible for skilled nursing facility care
Approval of ‘gainsharing’ and ‘risk sharing’ between hospitals and providers
Relaxing of requirements to bill for telehealth services
Relaxing of standards for billing for some home health services
11/11/2015
10
19
Value-based reimbursement programs for providers and healthcare organizations
• Hospital value-based purchasing (VBP) program
• Merit-based incentive payment system (MIPS) programs
• Physician quality reporting system (PQRS)
• Total performance score (TPS) vs. “payment adjustments” (claim-by-claim)
20
Risks associated with value-based reimbursement
Need for risk assessments
System-wide review of all providers with separate professional fees or payment systems (e.g., Part A, Part B, ACOs, etc.)
Alignment of incentives and goals between providers
Mitigation of risks
11/11/2015
11
21
Risks associated with value-based reimbursement
Risks Associated with ProvidersSystem-wide
All providers with separate professional fees or payment systems
All payors
Medicaid
Medicare (Parts A, B, C & D)
ACOs
Private pay
22
Risks assessments for value-based reimbursement
Need for risk assessments Alignment of incentives and goals between providers
Choice of quality measures
Mitigation of risks
Readmissions Reductions
11/11/2015
12
23
Alignment of Incentives and Goals Among Providers
Providers within healthcare system
Referring ProvidersProviders from whom you receive referrals
Physicians
Nursing Facilities
Rehab Facilities
Home Health
Providers to whom you referNursing Facilities
Rehab Facilities
Home Health
24
Alignment of incentives and goals among providers
Identification of quality measures should be aligned
Hospital readmissions
11/11/2015
13
25
Hospital readmission reductions
Hospital Readmission Reductions Program (HRRP)
Payments to applicable hospitals will be adjusted to account for
excess readmissions
Beginning in FY 2013, under the HRRP, hospitals with certain risk-adjusted
readmissions rates for 30-days post discharge began receiving reduced Medicare
payments. The maximum payment reduction for individual facilities is 3% in FY 2015
and thereafter.
The inpatient care processes, effective discharge planning, including coordination with
post-acute care providers, and post-discharge steps (e.g., follow-up with post-acute
care providers) are significant operational stages related to the readmissions.
Compliance and risk issues should be looked at from each stage in the process.
26
Hospital readmissions risks often vary among hospitals
“Nearly two dozen variables, such as patients’ education, income and ability to bathe, dress and feed themselves, explain nearly half of the difference in readmission rates between the best- and worst-performing hospitals.”
- Study by Harvard Medical School published in JAMA Internal Medicine
“Hospitals with the most readmissions had patients who were “less mobile, had more difficulty with activities of daily living, more chronic conditions, less education, lower income, lower assets, and the list goes on and on.”
- J. Michael McWilliams, assoc. prof. of health care policy and medicine Harvard Medical School
“Readmissions Reduction Program May Unfairly Penalize Hospitals That Serve More Poor Patients, Study Suggests. “
- AHLA Health and Life Sciences Law Daily, Sept 15, 2015
Risk reduction measures will need to be analyzed differently for such facilities.
11/11/2015
14
27
Questions?
Allison Keitt Luke, JD, CHCPrincipal, AK Luke, LLCHealthcare Compliance ConsultingAsheville, [email protected](404)229-0590
Ethan Bachrach, MD, MBI, FACEPChief Medical Informatics Officer,
TeamHealth
Knoxville, TN