Bundled Payments
Stacey Schulz, MBA
Sr. Contract Manager
UnityPoint Health - Meriter
Stephanie Cain, APN, DNP
Advanced Practice Nurse Colorectal Center
UnityPoint Health PeoriaMethodist Medical Center
Bundled Payments
Purpose & Learning Objectives
• Give an overview of Bundled Payment initiatives at
UnityPoint - Meriter and UnityPoint - Peoria Methodist
– What are Bundled Payments?
– How do we structure a Bundled Payment Program?
– What is impact of Bundled Payments on delivery of
Care?
2
Bundled Payments
Fee For Service Payments
• Separate payments for each service during a single
illness or course of treatment
– Fragmented provision of care
– Minimal coordination across providers and health
care settings
– Rewards quantity vs. quality
3
Bundled Payments
What are Bundled Payments?
• A lump sum payment for an entire episode of care
–
–
–
–
More coordinated care
Higher quality outcomes
Lower cost to payors/patients
Opportunity to align incentives for providers across
the care continuum
4
Bundled Payments
Available Opportunities
• Partnership for Healthcare Payment Reform –
Private Payor Bundle Pilot
• Center for Medicare and Medicaid Innovation
(CMMI)’s Bundled Payments for Care Improvement
Initiative (BPCI)
5
Bundled Payments
PHPR
• Initiative sponsored by the Wisconsin Health
Information Organization: provide superior
healthcare at affordable costs
• Total Knee Replacement Pilot
– Bundled Payment with a private payor
– Collaborative communication and feedback amongst
participants (providers and payors)
– Ability to design episode of care and required
performance measures
6
Bundled Payments
CMMI – Bundled Payments for Care Improvement
Initiative
• Four innovative payment models
– Financial and performance accountability
measures
– Care redesign/enhancements
• Evidence-based medicine
• Standardized operating protocols
• Improved care transitions
– Potential to gainshare
7
Bundled Payments : CMMI
BPCI Models of Care
• Model 1: Retrospective Acute Care Hospital Stay
Only
• Model 2: Retrospective Acute Care Hospital Stay
plus Post-Acute Care
• Model 3: Retrospective Post-Acute Care Only
• Model 4: Prospective Acute Care Hospital Stay
Only
8
Bundled Payments:
Model 2: Retrospective Acute Care Hospital Stay
plus Post-Acute Care
•
48 Episodes (MS-DRG severity family) to select from
Post-Acute Episode Length
–
•
•
30, 60, or 90 days
•
3% discount for 30 and 60 days
•
2% discount for 90 days
Risk Track for Outliers
–
A: 1/99, B: 5/95, C: 5/75
–
Responsible for 20% of episode payments above the high-end threshold
Model 2 Waivers
–
Payment Policy Waivers
•
3-Day Stay Requirement for SNF Payment
•
Post-Discharge Home Visit
•
Telehealth
–
Fraud and Abuse Waivers
• Savings Pool Contribution Waiver
• Incentive Payments Waiver
• Group Practice Gainsharing Waiver
• Patient Engagement Incentive Waiver
9
Bundled Payments:
BPCI Model 2 - Meriter
• Major joint replacement of the lower extremity
MS-DRG 469: Major joint replacement or reattachment of
lower extremity with major complication or comorbidity
MS-DRG 470: Major joint replacement or reattachment of
lower extremity without major complication or comorbidity
• 90 days, 2% discount
• Risk Track B (5/95)
• Fraud and Abuse Waivers
– Savings Pool Contribution Waiver
– Incentive Payments Waiver
– Group Practice Gainsharing Waiver
• Live: January 1, 2014
10
Bundled Payment
CMS Pricing Rules
Historical
Hospital
Claim Data
• Update
Factors
• Area Wage
Index
Apply
• Risk Tracks
• National
Case-mix
Weights
• Low Volume
Adjustment
Adjustments
• Area Wage
Index
• Case-mix
• Discount
End Result =
Target
Price
$
11
Bundled Payments
Post-Episode Spending
• CMS will perform a Post-Episode Spending
Calculation for the 30-Day Post-Discharge period
after an episode ends
– Total expenditures during the 30-Day PostEpisode period exceeding the Risk Threshold
(5/95), is excess spending that must be repaid.
12
Bundled Payments
Net Payment Reconciliation Amount
Target Price
Aggregate
FFS Payment
Net Payment
Reconciliation
Amount
13
Bundled Payments
Opportunity to Gainshare
• Model 2 Fraud and Abuse Waivers allow the
development of a Gainsharing Program to allow
Awardees to share savings with
providers/practitioners involved in Care Redesign for
identified Episodes of Care
– Internal Cost Savings
– Positive Net Payment Reconciliation Amounts
14
Bundled Payments:
Gainsharing Program Requirements
• Ensure care is not inappropriately reduced
• Maintain or improve quality of care
• No inappropriate change in utilization or referral
patterns
• Protect against fraud, waste, and abuse
15
Bundled Payments
Bundled Payment Process
• Convene an interdisciplinary team
• Define the episode of care
• Develop performance measures
– Financial
– Quality
•
•
•
•
•
Create model of care
Price the episode of care
Identify cost reduction opportunities
Develop gainsharing program
Foster a continuous process improvement plan
16
Bundled Payments
Interdisciplinary Team
• Designed to develop and monitor the episode of
care and performance
– Legal/Policy
– Clinical Leaders: inpatient, surgical, therapy,
post-acute care
– Quality/Performance Improvement
– Finance/Data analysis
– Administration
– Physicians
17
Turning Physician Interest into Engagement
Monthly Meetings
We Demonstrated
Solidarity
We Asked for Help
We Brought Data
Physicians walked into a
room with a room full of
administrative and
operational power.
Throughout the course of
the meetings, we asked
for the physicians to help
us design the bundle.
For the first time, physicians
were able to see how they
were performing not only as
an individual, but also
relative to their peers.
We were committed.
We included them in
the process.
We were transparent.
Bundled Payments
Define the Episode of Care
• Define episode parameters
– Included services and items
– Excluded services or items
– Related Post-Acute Care
– Length of Episode
• Qualification Criteria
– Eligibility criteria
– Ex: Age, limitations of co-morbidities, etc.
• Outlier Protection
– Understand where outlier risk resides
– Episode development and model of care manages
clinical risk not probability risk
19
Bundled Payments
Develop Performance Measures
• Aim to balance cost and quality outcomes
• Complete analysis of “baseline” cost of episode of
care
– “Cost” defined as real cost
– Segregate variable cost to model volume risk
• Assign Target Cost for purposes of gainsharing (if
applicable)
• Determine quality measures
–
–
–
–
Revision rates
Pain scores
Patient satisfaction scores
Return to functionality assessments (KOOS/WOMAC)20
Bundled Payments
Group Metrics, Non-financial
Quality Measures
Measure
Benchmark
Beta Blocker During Preoperative Period - Knees (Age 18-65)
Surgery Patients Receiving Appropriate VTE Prophylaxis - Knees (Age 18-65)
30-Day Readmission Rates for Knee Replacements
30-Day Complication Rate
100%
100%
0
0
Patient Length of Stay
Measure
Benchmark
Average (mean) Length of Stay:
3.08
Patient Experience Measures (HCAHPS)
Measure
Benchmark
Physician Communication Score
Nurse Communication Score
Discharge Instructions
Pain Always Well Controlled
Rate Hospital
89%
89%
100%
67%
100%
KOOS
Measure
Average of Pain
Average of Symptom
Average of Daily Living
Average of Sports and Recreational
Average Quality of Life
Survey 1
Survey 2
Survey 3
Change in
Score (2-1)
Change in
Score (3-1)
41.2
39.1
46.7
27.5
19.3
83.3
75.4
86.1
74.2
69.7
------
42.1
36.3
39.4
46.7
50.4
------
21
Bundled Payments
Monitoring and Tracking Data
•
•
•
•
Develop a mechanism for tracking data
Systematize processes
Communicate outcomes and results timely
Question outliers and idiosyncrasies
– Learn from them and adjust processes,
screenings, communications, etc. accordingly
• Consider sample size
– Need an “n” that is significant
22
Data Analysis Challenge:
Linking Disparate Data
Physician
Clinic
Records
Acute-Stay/
Discharge
Surgery
Pre-admission
Supply/
Purchasing
Records
Home
Health
Records
Inpatient
Stay
Records
OR
Records
Post-Acute
Care
Pharmacy
Records
Insurance
Records
Anesthesia
Records
Quality
Records
Records that are owned by other entities
Therapy
Records
23
Bundled Payments
Create Model of Care
• Identify standards of care and best practices
• Understand the cost variation for each component of
service
–
–
–
–
–
–
–
OR
Implant
Inpatient
Therapy
Home Care
SNF
Readmissions
• Facilitate conversations to identify opportunities by
comparing peer-to-peer and against best practice
guidelines
– Share data and let the data speak for itself
– Identify physician champions
– Solicit supporting documentation/educational articles, etc.
24
Pre-bundle Patient Care
Pre-admission
Surgery/
Acute Stay
Discharge
Post-Acute
Care
Post-bundle Patient Care
Pre-admission
Surgery/
Acute Stay
Discharge
Post-Acute
Care
The Value of Working Across a Continuum of Care:
• Growing partnership for all stakeholders throughout patients’ continuum of care
• Increased physician and nursing collaboration to ensure quality care
• Increased focus on practicing evidenced-based care
• Improved coordination of care with internal and external stakeholders
• Increased focus on appropriateness of post-acute care
• Increased stakeholder awareness for how to deliver high quality, lower cost care
Bundled Payments
Price the Episode of Care
• Define baseline/target price for bundle
– CMMI factor in discount
– Private payor factor in margin
• Assess outliers
– CMMI Risk Track
– Provision for outliers with private payor or manage risk with
eligibility criteria
• Prospective vs. Retrospective
– Prospective requires distribution of payments to episode of care
providers
– Retrospective requires reconciliation and settling
– Determine frequency of analysis and reconciliation to settle and
close episodes
27
Bundled Payments
Identify Cost Reduction Opportunities
• Understand the detailed cost for each component of the
bundle
• Review standardization opportunities
– Major: anesthesiology method
– Minor: updating physician preference card
• Define key cost components to monitor and track
–
–
–
–
–
–
–
–
–
Inpatient Costs
Surgical Costs
Implant Costs
Sum of Variable Costs
Readmission
Emergency Room
Skilled Nursing Facility
Home Health
Outpatient Therapy
28
2012 Meriter Discharge Data (MS-DRG 470)
% D/C Home with
OP Follow-up
% D/C to SNF
% D/C with Home
Care
% D/C Other
PPIC Patients
29.5%
30.1%
39.9%
.5%
Medicare Patients
14.2%
60.3%
21.4%
4.1%
Combined
Patients (PPIC +
Medicare)
19.1%
50.5%
27.4%
3.0%
• Nationally, Medicare Post-TKA SNF discharge rates average between 3745%
• SNF discharge percentages highly variable across Meriter orthopedic
providers (11% to 71%)
• A recent inpatient chart review of 15 PPIC patients discharged to Skilled
Nursing Facilities revealed the following:
• 7 of the 15 patients reviewed had mobility limitations or lack of support
at home that met skilled criteria for SNF admission
• 8 of the 15 patients were transferring and ambulating without physical
assistance prior to acute care discharge and had a spouse or other
caregiver available to provide support. Questionable whether skilled
criteria met.
Bundled Payments
Meriter’s Gainsharing Mechanism
• Group Circuit Breakers
– Eliminate payment to the whole group if
quality materially declined
• Individual Circuit Breakers
– Eliminate individual physician’s payment if
defined performance measures are not met,
or materially declined
30
Bundled Payments
Gainsharing Mechanism
• Required Savings
– 3% CMS Target Price
– Allows coverage for administrative costs
• Additional Savings to be shared 50% with Hospital and 50% with
Physicians
• Qualifying Cases
– Payouts are determined based on number of qualified cases
– Qualifications are based on criteria and standards set by the group
•
•
•
•
Pain Management
Implants
LOS
OR efficiency, etc.
– Physicians can make the best decision for an individual patient and may
lose a portion (qualified case) of gain-sharing but is not automatically
forfeiting any incentive for the period
31
Bundled Payments
Foster Continuous Improvement
• Quarterly Interdisciplinary Team Meetings
– Report Outcomes
– Review Variances
– Introduce Ideas or Opportunities
• Performance Dashboard
• Ongoing review and response to variances or
changes in cost or quality data
• Open communication and discussion of industry
articles and research
32
Bundled Payments
Online Guided CarePath: Wellbe.me
33
Bundled Payments
Private Payor Considerations
• Ability to develop contractual provisions
–
–
–
–
–
Compliance
Termination
Available and applicable waivers
Claims processing
Applicable restrictions
34
Bundled Payments
CMS Bundled Payment Initiative UnityPoint Health
Peoria Methodist Medical Center
 Methodist has selected to be paid a bundled rate for major bowel
procedures which includes DRGs 329, 330 and 331. (colon
resection primary)
 Under the bundled payment initiative, Part A & B services are
bundled beginning on the first three days prior to hospital admission
through 90 days post discharge.
 Providers continue to bill Medicare under fee-for-service. At the end
of each contract year, a retrospective reconciliation occurs against
the target price.
 Methodist selected Risk Tract 2 and launched Oct 1, 2013
 Methodist is also a medical shared savings participant with 11,000
attributed members.
35
Bundled Payments
Methodist Triple Aim Objectives
A.
Improve clinical outcomes of bowel resection patients.
B.
Coordinate patient care across the continuum to reduce
readmissions, unnecessary testing, and patients adherence to
recommended care.
C.
Improve the patient’s experience as measured by HCAHPS
scores.
D.
Increase physician satisfaction through participation in the care
redesign process, outcome measurement and economic
alignment.
E.
Improve operating efficiency resulting in lower costs.
36
Bundled Payments
Peoria Bundle Components
 Physicians’ services
 Inpatient hospital services
(episode anchor)
 Inpatient hospital readmission
services
 Long term care hospital
services (LTCH)
 Inpatient rehabilitation facility
services
 Skilled nursing facility services
(SNF)
 Home health agency services
(HHS)
 Hospital outpatient services
 Independent outpatient
therapy services
 Clinical laboratory services
 Durable medical equipment
 Part B drugs
37
Bundled Payments
Private Payor Considerations
• Ability to develop contractual provisions
– Compliance
– Termination
– Available and applicable waivers
– Claims processing
– Applicable restrictions
38
Top Initiatives to support project
• Started engaging surgeons 5 months before project
started
– Weekly meetings; data; 1:1 meetings
• Shared baseline data early on so all new current
situation and opportunity
• Included in design of gain share model, metrics, and
dashboard design
• Saw need to hire colorectal NP navigator (dual role
Bundled project and launch colorectal cancer center)
• Invested time in gaining surgeon consensus on order
sets, processes and procedures
Top Initiatives to support project
• Engaged wide stakeholder groups
–
–
–
–
–
–
–
–
–
–
–
Nursing units
Administration
PI analyst
Finance
Case management
Coders
OR staff
Schedulers
Surgeon office staff
Primary care providers
LTC’s
Positive Outcomes
• Good engagement from surgeon groups
• Good awareness and adherence to processes sets from
OR and nursing staff
– OR staff asking about opening expensive items
– Nursing staff and getting patients moving quicker and setting
discharge expectations
Positive Outcomes
• Internal cost savings being achieved
– ICU LOS and overall LOS down
– Cost per Case down (supplies in OR)
– Decreased Surgical Site Infection
• Navigator working well
– Patients like having navigator at the hub
– Surgeons like navigator to round and provide updates and
recommendations
Outcome Data (first four months)
Outcome Data (first four months)
Outcome Data (first four months)
Outcome Data (first four months)
Internal Cost Savings to date
Major Bowel Procedures
CY 2012
Baseline
(Inflated*)
Rollup
starting Oct
2013
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
55
29
3
11
2
7
4
2
7.7
7.1
5.7
9.1
4.5
6.7
7.25
2
Avg Cost/Case
$19,712
$16,974
13,652
22,048
13,884
13,555
18,018
7,022
Avg Supply Cost/Case
$5,186
$3,677
2,684
4,721
3,505
3,206
3,244
2,107
0
1
0
1
0
0
0
0
-79,408
-18,181
25,694
-11,656
-43,100
-6,777
-32,402
15
11
2
5
1
1
2
0
ALOS for entire visit
12.6
9.4
5.0
12.0
4
8
10.5
ALOS in ICU
2.8
2
1.0
3.0
1
2
3.5
Avg Cost/Case for entire visit
$30,453
$22,634
14,682
27,981
15,471
18,821
22,704
Avg Supp Cost/Case entire visit
$6,842
$3,478
2,665
4,181
3,427
1,469
3,563
Avg Cost/Day in ICU
$1,788
$1,802
1,775
2,027
1,408
1,534
1,598
$87
$83
82
93
65
71
74
51
25
3
9
2
6
3
2
6.5
6.4
5.7
7.6
4.5
6.5
7.3
2
Cost/Case
$16,972
$15,364
13,652
18,312
13,884
12,677
20,153
7,022
Supply Cost/Case
$4,629
$3,743
2,684
4,667
3,505
3,496
3,774
2,107
% Pts w/out Complications
92.7%
86%
100
82
100
86
75
100
Medicare only
All Colon Bundle w/ Medicare
n=
ALOS
Mortality
Estimated
Savings
(green)
ICU as part of stay
n=
Avg Supply Cost/Day in ICU
Pts without Complications
n=
ALOS
Lessons learned and opportunities for growth
• Major Bowel Procedures might not be the best to start
with?
– Challenges
• Identification/Coding
– Surgeon called in to minor assist and it gets coded as
bundle despite “not theirs”- perforated bowel
• Inclusion & Exclusion Criteria
• Elective vs. Emergent Cases and no pre-op screening and
mitigation
• Would have hired the NP earlier
Lessons learned and opportunities for growth
• Consensus takes time related to various surgeon
practice preference related to training and beliefs
– Example- standardized antibiotic use, close vs. open
decisions, use of wound vacs, how soon to do surgery vs.
wait
• Surgeons who are on the bundled team are very
engaged…they are not so good at getting the
processes and information to their peers
– Requires going to offices periodically to review data
metrics, and gain sharing
– Keeping them engaged is helps to have citizenship as part
of gain share.
Miscellaneous
• What/How is critical to helping manage?

Nurse Practitioner, PI, Case Managers
• What’s missing or challenging?
– Sometimes hard to know in the bundle or not?
– Patients presenting in crisis so poor outcomes
– Not able to take advantage of the SNF waiver due to the
nature of the surgery not being 3 day initial LOS and not
doing any direct admits post op at this time due to so few
readmits that would be stable
Bundled Payments
Questions?
51