value-based payment systems: how will they change the delivery of care? robert mechanic, mba...
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Value-Based Payment Systems: How Will They Change The Delivery of Care?
Robert Mechanic, MBABrandeis University
American Association of Physical Medicine and RehabilitationOctober 3, 2015
2
What Would Stuart Altman Say?
3
You guys better fix this system before I have
to use it!
Stuart’s Granddaughter Weighs In
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Please take great care of grandpa but don’t spend too much!
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Overview
• What’s happening to Medicare physician pay and value-based pay generally?
• Medicine through an episode of care lens• Post-acute care: The next frontier in
Medicare cost containment• Implications for Physiatrists
6
Progress on Value-Based Care?
“At this juncture, 'volume to value' is as much (or more) a marketing slogan as it is actual policy”
Jonathan Oberlander and M Laugesen, Leap of Faith – Medicare’s New Physician Payment SystemNEJM September 24, 2015
Progress on Value Based Pay?
Mass Medicare
ACO (Guess)
50%
Mass Commercial
in APMs4
38%
Medicare Beneficiaries
in ACOs1
15%
Non-Medicare Beneficiaries
in ACOs2
6-7%
Medicare Beneficiaries
in MA3
31%
Sources: CMS (1); Calculated based on Levitt Partners (2); KFF (3); Mass CHIA 2015 (4).
CMS Goal: 50% in
APMs by 2018
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Medicare’s New Physician Pay System
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MIPS APMs2019 +/- 4% +5%
2019 +/- 5% +5%
2019 +/- 7% +5%
2019 +/- 9%(and beyond)
+5%(until 2024)
Brandeis University10
10-Year Avg. Change in Physician Payment Under Merit Based Incentive Program
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024$40
$60
$80
$100
$120
$140
$160
MIPS AVG
$100
Source: 2014 Medicare Trustees Report
$102
Brandeis University11
10-Year Change in Physician Payment Under Merit Based Incentive Program
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024$40
$60
$80
$100
$120
$140
$160
MIPS AVG MIPS Lower MIPS Upper
$100MIPS Avg.
Source: 2014 Medicare Trustees Report
$154
$64
$102
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Scoring System for MIPS
Quality
Resource Use
EMR
Inflation
VBPM
MU
PQRS
Today 2019
Brandeis University13
10-Year Change in Physician Payment Under MIPS and APM
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024$30
$50
$70
$90
$110
$130
$150
$170
MIPS AVG MIPS Lower MIPS Upper APMs
$100
MIPS Avg.
Source: 2014 Medicare Trustees Report
$136
$64
$102
$154
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Qualifying for APM Trackl
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Alternative Payment Models?
Bundled Payments
ACOs & Global
Payments
PCMH Payments
Stuff We Haven’t Seen Yet
MedicareInpatient
DRGs
Private Efforts:ProvenCarePrometheus
Medicare Acute Care
Episode Demo
Affordable Care Act
1983 2007 20141993 2009 2010
Medicare Heart Bypass
Demo
Medicare BPCI
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A Brief History of Bundled Payment2016
Medicare CCJR & OCM
Bundled Payment
Hospital or Integrated Network
$$$
Single payment to cover costs of episode of care(30, 60, 90 days)
Payer
$ $ $ $ $
Group is responsible for all care within the episode
Shared Accountability
Prospective
• Target budget for each episode
• All providers paid FFS• Periodic CMS settlements
– Distribute surplus– Reclaim deficit
• Health system decides– Whom to contract with– How to distribute bonuses
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Hospital or Integrated Network
$$$
$ $ $ $ $
Retrospective
90 day look-forward
Index Hospitalization
Inpatient Professional
Outpatient Professional
Professional services
Inpatient Stays ReadmissionSNF
BPCI ModelsModel 1
30 - 90 day look-forward
Index Hospitalization
Inpatient Professional
Outpatient Professional
Professional services
Inpatient Stays
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ReadmissionSNF
Model 2
BPCI Models
30 day look-forward
Index Hospitalization
Inpatient Professional
Outpatient Professional
Professional services
Inpatient Stays
Brandeis University
ReadmissionSNF
Model 3
BPCI Models
30 day look-forward
Index Hospitalization
Inpatient Professional
Outpatient Professional
Professional services
Inpatient Stays
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ReadmissionSNF
Model 4: Prospective Payment
BPCI Models
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Choices for Bundlers• Select bundles
– 48 bundles (encompassing DRG families)– Covering about 70% of Medicare payments
• Exclusions (not optional)– Readmissions and Part B services– Generally exclude transplants, trauma cancer– Include all medical readmissions (328 for 469)
• Select bundle length (30, 60, 90)
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Gainsharing• CMS gets first 2 - 3% of savings• Additional savings can be shared between
facility, physicians, post-acute providers– Physician gain share capped at 50% of Medicare– No cap on other providers
• CMS approves gain share plans– Payments must be linked to quality
Financial Model2009 - 12
Historical Cost Per Episode
Target Price
2014
Episode DefinitionsRisk Tracks
CMS Discount
$18,200$18,382
Settlement
ActualFFS Cost$17,400
$982
Update Factor*
* For illustration update = 1%/yr discount = 2%
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BPCI Enrollment Now Exceeds 2000
Model 1 Model 2 Model 3 Model 40
200
400
600
800
1000
1200
1400
11 404
1177
9
294
147
Hospital/Facility MD Group
Brandeis UniversitySource: CMS BPCI Analytic File as of 7-15-2015. Numbers here may differ from other estimates because of duplicate participant names.
Average Participant is at Risk for 5 Episodes
The Financial Opportunity of Bundled Payment
Medicare Spends a Tremendous Amount in the 30 – 90 Days After Patients Are Discharged from the
Hospital
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Medicare Post Acute Care Spending
Hospital IP ProfessionalPost-Acute Hospital OP
2012 Medicare Spending by Type
21%
Source: MedPAC, 2014 Data Book (Charts 1-1, 8-2).
Hospital IP Professional Post-Acute
2008 Medicare Spending for Hos-pitalization plus 30 Days
34%
Source: RTI Inc, Post-Acute Care Episodes: Expanded Ana-lytic File, June 2011 p.216.
Brandeis University28
Major Joint CHF COPD Renal Fail. PCI Spinal Fusion
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
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Average 2013 Medicare Inpatient Payments Select Episodes for Sample Hospital
Source: Brandeis University analysis of Medicare Claims.
Major Joint CHF COPD Renal Fail. PCI Spinal Fusion
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
Index Admission Post Acute30
Avg. 2013 Medicare 90-Day Episode Price for Index Stay & Post Acute: Sample Hospital
29%
45%70%
71% 69%
48%
Source: Brandeis University analysis of Medicare claims data.
Brandeis University31Hospital Administrators Thinking About Post-Acute Care
There is Significant Variation in Post-Acute Care Spending Across
Hospitals ….
…. And Many Opportunities to Reduce Post-Acute Care Spending
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Average 2009 Post-Acute Care Spending per Episode for Total Joint Replacement (90 day)
A B C D E F G H I J K L M N O P Q R$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
33Source: Brandeis University analysis of Medicare Claims data. Figures adjusted for hospital wage index.
$6,000
$12,000
“St. Minimus” “St. Maximus”
A Tale of Two Hospitals: Joint Replacement Episode
34Source: Brandeis University analysis of Medicare Claims data. Unadjusted data.
Readmission Rate Pct. SNF Pct. Home Health0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
St. MaximusSt. Minimus
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A Tale of Two Hospitals: Joint Replacement Episode
Source: Brandeis University analysis of Medicare Claims data.
Opportunities for St. Maximus
• Expand home health and reduce use of SNF services where appropriate
• Put a program in place to monitor patients following discharge– Medication reconciliation– Home assessment– Primary care visit within 7 days– Emergency plan for likely events
• Consider preferred relationships with collaborative & high value facilities.
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Post-Acute Care – The Next Frontier for Controlling Medicare Spending
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Post Acute Strategy Components
1. Right setting2. Right partners3. Right relationships
– Patient & Family– Primary Care Physician– Post-Acute Providers
2008 Medicare Post-Acute Care Payments Per User by Site of Service: DRG 470 (Total Joint)
Admission Home Health
SNF Rehab LTAC Readmission$0
$5,000
$10,000
$15,000
$20,000
$25,000
$11,079
$3,132
$8,562$12,596
$23,017
$9,496
39Source: RTI Inc, Post-Acute Care Episodes: Expanded Analytic File, June 2011
100% 60% 40% 7% 0.2% 9%
Percent with Service:
Within 30 Days of Hospital Discharge
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Medicare Payment Methods
• SNF: Per-diem payment with therapies billed separately– Patients covered for up to 100 days
• Home health: 60-day bundle• Inpatient Rehab: Prospective per case
payment (similar to DRG method)– 60 percent of patients must have one of 13
conditions
Variation in 2010 Medicare Average Length of Stay for Skilled Nursing Facilities
Quartile 1 Quartile 2 Quartile 3 Quartile 40
10
20
30
40
50
60
41Source: Adapted form Office of HHS Inspector General December 2010.
2929
3434
61
24
24
5
Difference Between Top & Bottom Quartile10 Days = $4,000+
SNF A SNF B SNF C SNF D SNF E SNF F$0
$5,000
$10,000
$15,000
$20,000
$25,000
$15,961
$20,717
$9,336 $9,299 $7,929
$12,835
42
2013 Average SNF Spending Per Admission for A Hospital’s Total Joint Replacement Patients
Top 6 SNFs by Number of Admissions for **** TJR Patients
Source: Brandeis University analysis of Medicare claims data. All SNFs have 10+ cases.
Variation in 2009 Risk Adjusted Readmission Rates from Skilled Nursing Facilities
25th Percentile Median 75th Percentile0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
14.4%18.1%
22.0%
Readmissions
43Source: MedPAC Report to Congress, March 2012.
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Assessing Quality is Difficult
Post-Acute Care – The Next Frontier for Controlling Medicare Spending
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Pioneer ACO Post-Acute Strategies• Preferred SNF network• SNF rounding teams and case managers
– Improve quality– Manage LOS– Reduce readmission
• Direct SNF admissions – 3-day waiver• Financial incentives• Many other pilots
Atrius Health SNF Program: Better Results
©2015 Atrius Health, Inc. All rights reserved. Not for distribution. Admissions: Preferred w/clincian (1.380); Preferred (1,026); All Other (1023).
Facilities with Atrius Employed Clinicians:
Facilities:16ALOS: 13.9
Readmit rate: 8.3%Cost/Case: $7,624
Preferred Facilities:Facilities: 20ALOS: 15.8
Readmit rate: 8.4%Cost/Case: $9,395
All OthersApprox. 240 Facilities
ALOS: 22.3 Readmit rate: 10.9%
Cost/case $11,249
Percent of ACOs With Core Partners (N=60)
Source: L&M Policy Research. Pioneer ACO Findings from PY1 and PY2, March 2015. Note: Finding based on ACO interviews: Pioneer (23); AP-MSSP (20); MSSP (17).
Percent of ACOs With Developing Relationships by Provider Type (N=60)
Source: L&M Policy Research. Pioneer ACO Findings from PY1 and PY2, March 2015. Note: Finding based on ACO interviews: Pioneer (23); AP-MSSP (20); MSSP (17).
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What Does This Mean For Physiatrists?
WalMart Center of Excellence Program
Employees have no out-of-pocket costs if they get selected spine, heart or transplant procedures at one of six “centers of excellence”: Cleveland Clinic; Mayo Clinic; Virginia Mason; Scott and White; Geisinger; and Mercy Hospital.
Two years into the program, an unexpected pattern is emerging: the biggest savings and improvements in care are coming from avoiding procedures that shouldn’t be done in the first place. Atul Gawande, Overkill, The New Yorker
WalMart Center of Excellence Program
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AvoidingUnneeded
Surgery= VALUE
Questions
Robert MechanicThe Heller School for Social Policy & Management
The Health Industry ForumBrandeis University
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AppendixParticipation in BPCI
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BPCI Enrollment Now Exceeds 2,000
Model 1 Model 2 Model 3 Model 40
200
400
600
800
1000
1200
1400
11 404
1177
9
294
147
Hospital/Facility MD Group
Brandeis UniversitySource: CMS BPCI Analytic File as of 7-15-2015. Numbers here may differ from other estimates because of duplicate participant names.
Average Participant is at Risk for 5 Episodes
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Top Model 2 Bundles (700 bundlers)
Source: CMS BPCI Analytic File as of 7-15-2015.
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Model 2: 61% of Participants Selected 1 or 2 Bundles (N=698)
1 2 3 - 9 10 - 19 20 - 480
50
100
150
200
250
300
350
PhysicianHospital
Average Episode Initiator at Risk for 5 bundles
Source: CMS BPCI Analytic File as of 7-15-2015. Numbers here may differ from other estimates because of duplicate participant names.
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Model 2: Approximate Distribution PGP-Controlled Bundles by Specialty
69%
12%19%
Hospitalists 8.6 bundles/group
Orthopedists 2.1 bundles/group
All Other 5.4 bundles/group
Brandeis University
Source: CMS BPCI Analytic File as of 7-15-2015.