Fundamentals of Healthcare Reform
Walter Coleman
WV/PA HFMA
September 25, 2014
How about efficiency?
Waste in the System
Revenue
Industry Tipping Point
Time
•
•
•
•
How do local market conditions impact timing considerations?
Can market-changing events create an urgent paradigm shift?
What is my step-change business model risk?
Do I have the financial tools to adequately analyze relevant states?
6
Healthcare Performance Program Umbrella
Mandatory Element of Reform
VALUE BASED PURCHASING
Value Based Purchasing Overview
• MANDATORY – we have no choice
VBP Example
$33,333,333 Medicare Reimbursement
Amount mandated to pay
for participation
VBP Example
$33,333,333 Medicare Reimbursement
VBP Example
$33,333,333 Medicare Reimbursement
VBP Example
$33,333,333 Medicare Reimbursement
Amount mandated to pay
for participation
VBP Example
$33,333,333 Medicare Reimbursement
VBP Example
$33,333,333 Medicare Reimbursement
Value Based Purchasing
• Outcomes = Income
• Mandatory Pay for Performance Program
– 3,500 hospitals are included in this program across the country
• Reimbursement Determine Two Ways:
– Achievement
• How we compare to National Top Decile (350 Hospitals)
– Improvement
• How we measure against ourselves
• Did we do better than a previously measured baseline period
Value Based Purchasing
• Percent of Medicare Reimbursement at Risk
•
•
•
•
•
•
•
FY 2013 – 1.00%
FY 2014 – 1.25%
FY 2015 – 1.50%
FY 2016 – 1.75%
FY 2017 – 2.00%
FY 2018 – 2.00%
FY 2019 – 2.00%
• FY 20xx – refers to the Federal Fiscal Year (Oct. 1 – Sep. 30)
when DRG payments will be affected
Value Based Purchasing
NEW MEASURES
VBP FY 2016 – New Measures
• Patient Experience
– No Change – Same HCAHPS Measures
• Core Measures
– 5 Dropped; 1 New
• Outcomes
– 3 New Measures
• Efficiency
– No Change
VBP FY 2016 – New Measures
• Patient Experience
– No Change – Same HCAHPS Measures
• Core Measures
– 5 Dropped; 1 New
• Outcomes
– 3 New Measures
• Efficiency
– No Change
VBP – FY 2016 – Patient Experience
• HCAHPS
– Hospital Consumer Assessment of Healthcare Providers Survey
– An engagement survey CMS has mandated each hospital give to every
discharged inpatient
– Consists of 27 questions that lead to the 8 categories assessed for VBP
– Patients score each question on scale of 4
– For answers to count, patients must give hospitals a score of 4 or
“Always”
VBP FY 2016 – Patient Experience
• Communication with Nurses
• Communication with Doctors
• Responsiveness of Hospital Staff
• Pain Management
• Communication about Medicines
• Cleanliness and Quietness of Hospital
• Discharge Information
• Overall Rating of Hospital
VBP FY 2016 – New Measures
• Patient Experience
– No Change – Same HCAHPS Measures
• Core Measures
– 5 Dropped; 1 New
• Outcomes
– 3 New Measures
• Efficiency
– No Change
VBP FY 2015 – Core Measures
•
•
•
•
•
•
AMI-7a
AMI-8a
HF-1
PN-3b
PN-6
SCIP-Inf-1
•
•
•
•
•
•
SCIP-Inf-2
SCIP-Inf-3
SCIP-Inf-4
SCIP-Inf-9
SCIP-Card-2
SCIP-VTE-2
VBP FY 2016 – Core Measures
• AMI-7a
• SCIP-Inf-9
• PN-6
• SCIP-Card-2
• SCIP-Inf-2
• SCIP-VTE-2
• SCIP-Inf-3
• IMM-2
Note: IMM-2 Performance Period is only 6 MONTHS (Two 3 Month Periods)
January 1, 2014 – March 31, 2014 AND October 1, 2014 – December 31, 2014
VBP FY 2016 – Core Measures
Measure ID
Benchmark
AMI-7a
100%
IMM-2
98.875%
PN-6
100%
SCIP-Inf-2
100%
SCIP-Inf-3
100%
SCIP-Inf-9
100%
SCIP-Card-2
100%
SCIP-VTE-2
100%
VBP FY 2016 – Core Measures
• AMI-7a
• SCIP-Inf-9
• PN-6
• SCIP-Card-2
• SCIP-Inf-2
• SCIP-VTE-2
• SCIP-Inf-3
• IMM-2
VBP FY 2017 – Clinical Care: Process
• AMI-7a
• IMM-2
• PC-01
PC-01 = Elective Delivery Prior to 39 Completed Weeks
Gestation
VBP FY 2016 – New Measures
• Patient Experience
– No Change – Same HCAHPS Measures
• Core Measures
– 5 Dropped; 1 New
• Outcomes
– 3 New Measures
• Efficiency
– No Change
VBP FY 2015 – Outcomes
• 30 Day Mortality – AMI
• 30 Day Mortality – HF
• 30 Day Mortality – PN
• AHRQ – PSI-90
• CLABSI
VBP FY 2016 – Outcomes
• 30 Day Mortality – AMI
• 30 Day Mortality – HF
• 30 Day Mortality – PN
• AHRQ – PSI-90
• CLABSI
• CAUTI
• SSI – Colon
• SSI – Abdominal Hysterectomy
VBP FY 2016 – Outcomes
Measure ID
Benchmark
CAUTI
0.000
CLABSI
0.000
Surgical Site Infection
Colon
0.000
Abdominal
Hysterectomy
0.000
VBP FY 2016 – Outcomes
Outcomes
• 30 Day Mortality – AMI
• 30 Day Mortality – HF
• 30 Day Mortality – PN
• AHRQ – PSI-90
• CLABSI
• CAUTI
• SSI-Colon
• SSI-Abdominal Hyster.
VBP FY 2017 – Clinical Care and Safety
Clinical Care- Outcomes
• 30 Day Mortality – AMI
• 30 Day Mortality – HF
• 30 Day Mortality – PN
• AHRQ – PSI-90
• CLABSI
• CAUTI
• SSI-Colon
• SSI-Abdominal Hyster.
Safety
• MRSA
• C. Diff
Outcomes – 30 Day Mortality
• Currently in 3 Performance Periods
• FY 2016 ended June 30, 2014
• FY 2019 began July 1, 2014
• 30 Day Mortality Measures
– Assess deaths: AMI, HF, and PN that occur within 30 days after
admission; which, depending on the length of stay, may occur postdischarge….
CMS 30 Day Risk-Standardized Mortality
Rate Calculation
=
Facility Predicted Deaths
X
Facility Expected Deaths
Measure (AMI,
HF, PN) National
Crude Rate
VBP FY 2016 – New Measures
• Patient Experience
– No Change – Same HCAHPS Measures
• Core Measures
– 5 Dropped; 1 New
• Outcomes
– 3 New Measures
• Efficiency
– No Change
VBP FY 2016 - Efficiency
• Medicare Spend Per Beneficiary (MSPB)
– Captures total Medicare Spending Per Beneficiary relative to a hospital
stay, bundling hospital sources (Part A) with post acute care (Part B)
– Bundles the cost of care delivered to a beneficiary for an episode across
the continuum of care:
• 3 Days Prior
• Hospital Inpatient Stay
• 30 Days post Discharge
PROPOSED MSPB Measures
• Additional Efficiency Measures proposed to be added
Medical
Surgical
Kidney/Urinary Tract
Infection
Hip replacement/revision
Cellulitis
Knee replacement/revision
Gastrointestinal
Lumbar spine
hemorrhage
fusion/refusion
• Risk Adjusted similarly to MSPB
• Proposed to facilitate alignment with the Physician
Value Based Payment Modifier program
• Includes Part A and B and 3 days prior to admission
and 30 days post discharge
SOURCE: May 1, 2014 Federal Register
41
VBP Shifting of Domain Weights
FY 2013
FY 2014
• Core Measures
• Patient Experience
FY 2015
FY 2016
• Outcomes
• Efficiency (MSPB)
VBP – FY13 Domain Weights
Performance Period: July 1, 2011 – March 31, 2012
Reimbursement Period: October 1, 2012 – September 30, 2013
Core Measures = 70%
VBP – FY14 Domain Weights
Performance Period: April 1, 2012 – December 31, 2012
Reimbursement Period: October 1, 2013 – September 30, 2014
Outcomes = 25%
Core Measures = 45%
VBP – FY15 Domain Weights
Performance Period: January 1, 2013 – December 31, 2013
Reimbursement Period: October 1, 2014 – September 30, 2015
HCAHPS = 30%
Outcomes = 30%
Core Measures = 20%
MSPB = 20%
One Measure!!
VBP – FY16 Domain Weights
Performance Period: January 1, 2014 – December 31, 2014
Reimbursement Period: October 1, 2015 – September 30, 2016
Core Measures = 10%
HCAHPS = 25%
MSPB = 25%
Outcomes = 40%
VBP – FY17 Domain Weights
Performance Period: January 1, 2015 – December 31, 2015
Reimbursement Period: October 1, 2016 – September 30, 2017
Clinical Care - Process = 5%
HCAHPS = 25%
Clinical Care Outcomes = 25%
Safety = 20%
MSPB = 25%
47
Crosswalk from FY 16 to FY 17
Measure
Prior Domain (FY’16)
NQS Domain (FY’17)
Core Measures
Clinical Process of Care
Clinical Care- Process
HCAHPS
Patient Experience of Care
Patient & Caregiver Centered
Experience of Care/Care
Coordination
CAUTI/CLABSI/SSI
Outcomes
Safety
Mortality – 3 diagnoses
Outcomes
Clinical Care- Outcomes
PSI- 90
Outcomes
Safety
Medicare Spend Per Beneficiary
Efficiency
Efficiency & Cost Reduction
Fundamentals of Healthcare Reform
ANALYZING VALUE BASED
PURCHASING PERFORMANCE
CGH
System
VBP FY'13
FY'15 TOTAL PERFORMANCE
Earned Back
Unearned
Available $$
$4,925,357
$288,853
$6,187,541
$540,406
$11,112,898
$829,259
$4,925,357
% Earned
34.83%
44.32%
Breakeven Point: $5,301,360
Breakeven Point: $451,333
$288,853
$0
$0
$829,259
$11,112,898
Chesapeake
OverallGeneral
Performance
Performance
• System was penalized $376,003 in FY’15 VBP Program
• Must acknowledge the amount UNEARNED
• Of the programs dollars made available:
– System did not capitalize on $6,187,541
Facility
Facility A
Bonus / (Penalty)
$97,593
Total Score
42.03
State Average
41.81933117
National Average
41.70169535
National Δ
0.325577377
Measure
Score
Amount Earned
by Measure
Amount
Unearned by
Measure
% of Measure
Earned
Core Measures
AMI-8a
SCIP-Inf-1
SCIP-Inf-2
SCIP-Inf-3
SCIP-Inf-4
SCIP-Inf-9
HF-1
PN-3b
PN-6
SCIP-Card-2
SCIP-VTE-2
Core Measures TOTAL
6
9
7
5
9
5
8
5
8
3
5
$
$
$
$
$
$
$
$
$
$
$
$
32,712
49,068
38,164
27,260
49,068
27,260
43,616
27,260
43,616
16,356
27,260
381,643
$
$
$
$
$
$
$
$
$
$
$
$
21,808
5,452
16,356
27,260
5,452
27,260
10,904
27,260
10,904
38,164
27,260
218,077
60.00%
90.00%
70.00%
50.00%
90.00%
50.00%
80.00%
50.00%
80.00%
30.00%
50.00%
63.64%
Comm. w/ Nurses
Comm. w/ Doctors
Resp. of Hosp. Staff
Pain Management
Comm. Re: Medicines
Clealiness & Quietness
Discharge Information
Overall Rating
2
1
2
2
1
2
3
1
$
$
$
$
$
$
$
$
17,994
8,998
17,994
17,994
8,998
17,994
26,990
8,998
$
$
$
$
$
$
$
$
71,966
80,962
71,966
71,966
80,962
71,966
62,970
80,962
20.00%
10.00%
20.00%
20.00%
10.00%
20.00%
30.00%
10.00%
Consistency Score
HCAHPS TOTAL
17
$
$
152,933
278,896
$
$
26,987
620,704
85.00%
31.00%
AMI
HF
PN
AHRQ PSI-90
CLABSI
Outcomes TOTAL
10
3
8
9
0
$
$
$
$
$
$
179,920
53,980
143,934
161,928
0
539,763
$
$
$
$
$
$
(0)
125,940
35,986
17,992
179,920
359,837
100.00%
30.00%
80.00%
90.00%
0.00%
60.00%
MSPB
1
$
$
59,974
59,974
$
$
539,746
539,746
10.00%
Efficiency TOTAL
Facility TOTAL
$
1,260,277
$
1,738,363
42.03%
HCAHPS
Outcomes
Efficiency
Facility
Earned Back
$381,643
Core Measures
Unearned
Measure Value
$218,077
$599,720
% Earned
63.64%
Breakeven Point: $232,525
Facility
Earned Back
$278,896
$278,896
% Earned
60.00%
$539,763
$599,720
HCAHPS
Unearned
Measure Value
$620,704
$899,600
Earned Back
$539,763
Breakeven Point: $348,788
$381,643
$0
Facility
Outcomes
Unearned
Measure Value
$359,837
$899,600
% Earned
31.00%
$0
Facility
Earned Back
$59,974
Breakeven Point: $348,788
$899,600
Efficiency
Unearned
Measure Value
$539,746
$599,720
% Earned
10.00%
Breakeven Point: $232,535
$59,974
$0
$899,600
$0
$599,720
Mandatory Element of Reform
READMISSION REDUCTION
PROGRAM
Readmission Reduction Program
• 9% of Current and Future Medicare Reimbursement at Risk
– 3% penalty of Medicare Reimbursement at risk each program year
– Measured Populations 30 days from DISCHARGE
• AMI, HF, PN, COPD, THA & TKA
• August 2014: CABG Added to FY 2017
• Performance Periods: 3 Year Rolling Program
–
–
–
–
–
FY’15: July 1, 2010 – June 30, 2013 – 3%
FY’16: July 1, 2011 – June 30, 2014 – 3%
FY’17: July 1, 2012 – June 30, 2015 – 3%
FY’18: July 1, 2013 – June 30, 2016 – 3%
FY’19: July 1, 2014 – June 30, 2017 – 3%
Currently participating in 3
performance periods
simultaneously
How are Readmissions Measured?
• Scoring Index based at 1.0
• Calculate Excess Readmission Ratio
Facility Predicted Value
Facility Expected Value
• Excess Readmission Ratio > 1 = BAD
• Excess Readmission Ratio < 1 = GOOD
Mandatory Element of Reform
HOSPITAL ACQUIRED
CONDITIONS
Hospital Acquired Conditions (1% at Risk*)
• 12 Hospital Acquired Conditions Identified
– Divided in to 2 Domains
• If a hospital is in the BOTTOM QUARTILE (worst performing
25% in the country), it will be penalized a FULL 1% of Medicare
Reimbursement
• Penalties will begin FY’15 (beginning October 1, 2014)
*1% After DSH, Uncompensated Care, and IME
Hospital Acquired Conditions: FY 2015
First Domain: PSIs
Performance Period: 7/1/11-6/30/13
Second Domain: CDC
Performance Period: CY 2012 & 2013
Pressure Ulcer Rate
CLABSI
Iatrogenic Pneumothorax Rate
CAUTI
Central Venous Catheter-Related
Bloodstream Infections
Postoperative Hip Fracture
Postoperative Pulmonary Embolism
and Deep Vein Thrombosis Rate
Postoperative Sepsis
Postoperative Wound Dehiscence
HAC Domain Weightings: FY’15
DOMAIN 1: 35%
DOMAIN 2: 65%
Postop. Sepsis 5.0%
CLABSI 32.5%
Pressure Ulcer 5.0%
CAUTI 32.5%
Hospital Acquired Conditions: FY 2016
First Domain: PSIs
25%
Second Domain: CDC
75%
Pressure Ulcer Rate
CLABSI
Iatrogenic Pneumothorax Rate
CAUTI
Central Venous Catheter-Related
Bloodstream Infections
SSI Following Colon Surgery (FY 2016)
Postoperative Hip Fracture
SSI Following Abdominal Hysterectomy
(FY 2016)
Postoperative Pulmonary Embolism
and Deep Vein Thrombosis Rate
Postoperative Sepsis
Postoperative Wound Dehiscence
HAC Domain Weightings: FY’15
DOMAIN 1: 25%
DOMAIN 2: 75%
Postop. Sepsis
3.6%
CLABSI 25.0%
Pressure Ulcer 3.6%
SSI 25.0%
CAUTI 25.0%
Hospital Acquired Conditions: FY 2017
First Domain: PSIs
25%
Second Domain: CDC
75%
Pressure Ulcer Rate
CLABSI
Iatrogenic Pneumothorax Rate
CAUTI
Central Venous Catheter-Related
Bloodstream Infections
SSI Following Colon Surgery (FY 2016)
Postoperative Hip Fracture
SSI Following Abdominal Hysterectomy
(FY 2016)
Postoperative Pulmonary Embolism
and Deep Vein Thrombosis Rate
Methicillin-Resistant Staphylococcus
Aureus (MRSA) Bacteremia (FY 2017)
Postoperative Sepsis
Clostridium Difficile (FY 2017)
Postoperative Wound Dehiscence
Duplicate Measures
VBP - Outcomes
Individual Measure
CLABSI
CAUTI
SSI - Colon
SSI - Abdominal Hysterctomy
HAC
CLABSI
CAUTI
SSI - Colon
SSI - Abdominal Hysterectomy
AHRQ: PSI-90
Pressure Ulcer Rate
Iatrogenic Pneumothorax Rate
Postoperative Pulmonary
Embolism and DVT Rate
Accidental Puncture and
Laceration Rate
Pressure Ulcer Rate
Iatrogenic Pneumothorax Rate
Postoperative Pulmonary
Embolism and DVT Rate
Accidental Puncture and
Laceration Rate
64
Penalties & Your DRG Payment
SAMPL IPPS Reimbursement Letter
PPS EFFECTIVE 10/1/2014
OPERATING INFORMATION
Federal National Standardized Labor Rate
Wage Index
Labor Rate x Wage Index
Federal National Standardized Non-Labor Rate
PPS Blended Rate
FY 2015 Hospital Readmissions Reduction (HRR) Adjustment Factor
FY 2015 Value-Based Purchasing (VBP) Adjustment Factor
DRG Weight
Facility CMI
0.9994
0.994348
1.00
1.54
3,329.57
0.8994
2,994.62
2,040.71
5,035.33
5,032.30
5,003.86
($3.02) RRP Reduction
($28.44) VBP Reduction
($31.46) Per DRG Reduction
($31.46) x 1.54
Disproportionate Share Adjustment (Operating) (Empirically Justified Amount 25%)
Disproportionate Share Adjustment (Operating) (Uncompensated Care Amount)
Fully Loaded Operating Rate adjusted for CMI
FY 2015 Hospital Acquired Condition (HAC) Adjustment Factor
0.0691
0.99
($48.45)
VBP & RRP Per
DRG Red. CMI Adj
($83.47)
HAC Per DRG
CMI Adjusted
($131.92)
Total Per DRG
Reduction
0.02 5,090.43
507.71 5,598.14
8,346.97
8,263.50
Mandatory Elements of Reform
CURRENT DOLLARS AT RISK
SAMPLE $50,000,000 FACILITY
VBP FY 2016 – Sample Current $$ at Risk
VBP FY 2016
Domain
Weight
At Risk
Medicare Spend Per Beneficiary
25%
$ 745,471
Outcomes
40%
$ 1,192,753
Patient Experience
25%
$ 745,471
Core Measures
10%
$ 298,188
TOTAL
100%
On the Table
$
1,562,507
$
2,500,011
$
1,562,507
$
625,003
$ 2,981,883 $
6,250,028
VBP – Sample Total Current $$ at Risk
VBP Current Dollars At Risk (Active Performance Periods)
Domain
Weight
At Risk
On the Table
FY 2016
Medicare Spend Per Beneficiary
25%
$ 745,471 $
1,562,507
Outcomes
40%
$ 1,192,753 $
2,500,011
Patient Experience
25%
$ 745,471 $
1,562,507
Core Measures
10%
$ 298,188 $
625,003
FY 2017
Outcomes - 30 Day Mortality
25%
$ 851,967 $
1,785,722
Outcomes - AHRQ
3.75% $ 127,795 $
267,858
FY 2018**
Outcomes - 30 Day Mortality
25%
$ 851,967 $
1,785,722
Outcomes - AHRQ
3.75% $ 127,795 $
267,858
FY 2019**
Outcomes - 30 Day Mortality
25%
$ 851,967 $
1,785,722
TOTAL
$ 5,793,374 $
12,142,911
All Reform – Sample Total Current $$ at Risk
All Active Mandatory Reform
Domain
On the Table
FY 2016
Value Based Purchasing
Readmissions
Hospital Acquired Conditions
FY 2017
Value Based Purchasing
Readmissions
Hospital Acquired Conditions
FY 2018**
Value Based Purchasing
Readmissions
FY 2019**
Value Based Purchasing**
Readmissions
TOTAL
$
6,250,028
COMPLETE
$
1,703,933
$
$
$
2,053,581
5,111,800
1,703,933
$
$
2,053,581
5,111,800
$
$
1,785,722
5,111,800
$
30,886,178
Mandatory Elements of Reform
OPPORTUNITIES
New NQS Based Domains for FY 2017
Clinical Care Process = 5%
HCAHPS = 25%
Clinical Care Outcomes = 25%
Safety = 20%
MSPB = 25%
71
50% of VBP is Mortality and MSPB
Clinical Care Outcomes = 25%
72
Opportunities – VBP: Outcomes
1
30 Day Mortality Rate - PN
FY14
∆
Performance
87.40%
Baseline
89.58%
-2.18%
Threshold
88.18%
-0.78%
Benchmark
90.21%
-2.81%
Score
0
Improvement
+1%
+1.5%
+2.5%
+3.5%
+4.5%
+5.5%
+6.5%
+7.5%
+8.5%
Dollar Value
$
13,209
$
52,836
$
105,673
$
132,091
$
132,091
$
132,091
$
132,091
$
132,091
$
132,091
Score
1
4
8
10
10
10
10
10
10
2
30 Day Mortality Rate - AMI
FY14
∆
Performance
83.81%
Baseline
84.76%
-0.95%
Threshold
84.77%
-0.96%
Benchmark
86.73%
-2.92%
Score
0
Improvement
+1%
+1.5%
+2.5%
+3.5%
+4.5%
+5.5%
+6.5%
+7.5%
+8.5%
Dollar Value
$
13,209
$
39,627
$
105,673
$
132,091
$
132,091
$
132,091
$
132,091
$
132,091
$
132,091
Score
1
3
8
10
10
10
10
10
10
3
30 Day Mortality Rate - HF
FY14
∆
Performance
85.21%
Baseline
88.94%
-3.73%
Threshold
88.61%
-3.40%
Benchmark
90.42%
-5.21%
Score
0
Improvement
+1%
+1.5%
+2.5%
+3.5%
+4.5%
+5.5%
+6.5%
+7.5%
+8.5%
Dollar Value
$
$
$
$
13,209
$
79,254
$
132,091
$
132,091
$
132,091
$
132,091
Score
0
0
0
1
6
10
10
10
10
Top 50th = Δ1 Patient
Top 50th = Δ1 Patient Top 50th = Δ8 Patients
Top 10th = Δ3 Patient
Top 10th = Δ3 Patient Top 10th = Δ11 Patients
73
VBP – CMS Proposed Future Measures
• FY 2018 Program (Performance Period: CY 2016)
– Patient Experience: Care Transition
• FY 2019 Program (Performance Period: CY 2017)
– Surgical Complication: Total Hip and Total Knee Arthroplasty
VBP – Other Possible Metrics to Follow
• Emergency Department Care
• Preventative Care
– Pneumonia Vaccine
• Children’s Asthma Care
• Stroke Care
– Blood Clot Prevention Care
– Preventative Care
FY 19 New Measure
• Added THA/TKA for 30 month performance period.
– January 1, 2015-June 30, 2017
– Baseline of July 1, 2010-June 30, 2013
• Risk standardized measure for complications after Total Hips
and Knees surgeries for up to 90 days post surgery
– One of eight complications: AMI, pneumonia, sepsis, SSI, PE, death,
mechanical complication or periprosthetic joint infection/wound infection.
– Each has a defined time frame
– Each is a ‘Yes’ or ‘No
– Risk adjusted for patient age, sex and comorbidities
SOURCE: August 2014 Proposed Rules Federal Register
76
Readmissions – Proposed Future Measures
• Percutaneous Coronary Intervention (PCI)
• Stroke
Opportunities – HAC
• SSI Following Colon Surgery (FY’16)
• SSI Following Abdominal Hysterectomy (FY’16)
• MRSA (FY’17)
• C Diff (FY’17)
BPCI
BUNDLED PAYMENTS
Description of Models 1 - 4
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Bundled Payments
Post Acute Care Bundling
Acute Care Episode with Post Acute Care Bundling
Acute Care Bundling
Medical Homes
©2010 Kaufman Hall & American Hospital Association.
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Advantages of Participation
• Improved quality of care for patients
– Reduced complications, readmissions, and cost
• Improved ability to work with hospitals, physicians, nursing
homes, home health, rehab centers, and other providers to
improve overall care quality and service
• Potential competitive advantage within market with physicians
and post-acute care
• Opportunity to receive payment aligned with these goals and
based on outcomes
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Where are the Bundled Payments?
MEDICARE: Cohort 1
COMMERCIAL as of July 2014
http://innovation.cms.gov/initiatives/bundled-payments/
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Early Results of BPCI Cohort 2
• Tremendous increase in the
number of applications in the
most recent open enrollment
in April 2014: Nearly Triple!
• Models 2,3,4 were open for
enrollment
• Currently in the Phase 1
period which is the non risk,
decision making period.
Phase 2 is when the Episode
Initiator starts to accept risk
Changes In the Cohort 2 Timeline: 7/31/14
Event
Original Date
Revised Date
Historical Claims &
Target Pricing
Late Summer 2014
October 2014
Go/No Go Decision
to Participate
November 1, 2014
January 1, 2015
Go Live with Risk
January 1, 2015
April 1, 2015
Other significant changes:
 ADDITION OF EPISODES: You can now add episodes in July
2015 and October 2015: only 1 episode is required for April 1,
2015. Phase 1 ends in October 2015
 B-CARE: B-CARE quality data wont be collected until Spring
2015
 Option for Delayed Reconciliation: Will offer a 4 quarter
timeline for reconciliation.
DRG 470 Total Joint Replacement w/out
CC
Model 2
DRG Inpatient and PACS Fee for Service
Model
$3,207
+
$10,129
+
$8,965
+
$616
=
$22,927
x
MD
•
•
•
•
Home Health
SNF
IRF
Outpt.
Rehab
98%
Home
$22,468
Readmission
Episodic period for model 2: 3 days prior to admission to 90 days post discharge from hospital
$22,468
Bundled Episodic Model
Note: any CMI aggregate charges lower than $22,468 can be shared with providers via gain
sharing model
BPCI Multiple Bonus Payments: Physicians
• 2 opportunities for Physicians to be awarded Bonuses
1. Internal Cost Savings Pool
2. Bundled Payment Savings Pool
• Both have required Quality Metrics and Cost Savings to be met
• Cost Savings MUST be directly attributed to Quality
Improvement and Care Redesign
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BPCI Multiple Bonus Payments: Physicians
• 2 opportunities for Physicians to be awarded Bonuses
1. Internal Cost Savings Pool
2. Bundled Payment Savings Pool
• Both have required Quality Metrics and Cost Savings to be met
• Cost Savings MUST be directly attributed to Quality
Improvement and Care Redesign
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Internal Cost Savings
• DHG Healthcare has one of very few, if not the only, Internal
Cost Savings Gainshare models to have been submitted and
approved by CMS at this time
APPROVED
Outpatient Bundling…coming soon?
In February 2014, CMMI issued a Request for Information on a new bundled
payment program to expand to outpatient.
Focus is Specialty Physicians and on
(1) Procedures and (2) complex chronic care
• Highlighted colonoscopy, cataract surgery, & radiation therapy for
procedural options.
• Regarding the chronic care, “CMS is considering development of a model
that would incentivize specialists to more efficiently manage the care
provided to beneficiaries with complex or chronic medical conditions over
the period of time that corresponds to the specialty practitioner’s long
term involvement with managing the beneficiary’s care.”
• Was seeking responses until March 13
Outpatient Bundling
• Referred to by CMS as: “Comprehensive Ambulatory
Payment Classification (APC)”
• Finalized in the CY 2014 OPPS/ASC Final Rule
• Affect payments to 4,000 hospitals and 5,300 ASC’s
• Delayed implementation to January 1, 2015 instead of the
traditional outpatient October 1 implementation date
– Extra time allowed the Agency, hospitals, and physicians more time to
evaluate and comment on the policy
Outpatient Bundling – Comprehensive APC’s
• Single Medicare payment rather than individual APC payments
throughout the episode
• 28 Bundled Outpatient Procedures
• Proposed Payment could include all hospital services reported
on the claim covered under Medicare Part B for up to a
proposed 6 Month Period
– Few exceptions resulting in a single beneficiary copayment per claim
Outpatient Bundling – Proposed Procedures
No.
Clinical
Family
Proposed CY
2015 APC
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
AICDP
AICDP
AICDP
AICDP
AICDP
BREAS
CATHX
CATHX
ENTXX
EPHYS
EPHYS
EPHYS
EYEXX
EYEXX
GIXXX
NSTIM
NSTIM
NSTIM
ORTHO
PUMPS
RADTX
UROGN
UROGN
UROGN
VASCX
VASCX
VASCX
VASCX
0090
0089
0655
0107
0108
0648
0427
0652
0259
0084
0085
0086
0293
0351
0384
0061
0039
0318
0425
0227
0067
0202
0385
0386
0083
0229
0319
0622
APC Title
Level II Pacemaker and Similar Procedures
Level III Pacemaker and Similar Procedures
Level IV Pacemaker and Similar Procedures
Level I ICD and Similar Procedures
Level II ICD and Similar Procedures
Level IV Breast and Skin Surgery
Level II Tube or Catheter Changes or Repositioning
Insertion of Intraperitoneal and Pleural Catheters
Level VII ENT Procedures
Level I Eletrophysiologic Procedures
Level II Eletrophysiologic Procedures
Level III Eletrophysiologic Procedures
Level IV Intraocular Procedures
Level V Intraocular Procedures
GI Procedures with Stents
Level II Neurostimulator & Related Procedures
Level III Neurostimulator & Related Procedures
Level IV Neurostimulator & Related Procedures
Level V Musculoskeletal Procedures Except Hand and Foot
Implantation of Drug Infusion Device
Single Session Cranial Stereotactic Radiosurgery
Level V Female Reproductive Procedures
Level I Urogenital Procedures
Level II Urogenital Procedures
Level I Endovascular Procedures
Level II Endovascular Procedures
Level III Endovascular Procedures
Level II Vascular Access Procedures
Proposed CY
2015 APC
Geometric
Mean Cost
$
6,961.45
$
9,923.94
$
17,313.08
$
24,167.80
$
32,085.90
$
7,674.20
$
1,522.15
$
2,764.85
$
31,273.34
$
922.84
$
4,807.69
$
14,835.04
$
9,049.66
$
21,056.40
$
3,307.90
$
5,582.10
$
17,697.46
$
27,283.10
$
10,846.49
$
16,419.95
$
10,227.12
$
4,571.06
$
8,019.38
$
14,549.04
$
4,537.95
$
9,997.53
$
15,452.77
$
2,635.35
Outpatient Bundling – Summary
• Comprehensive APC is another step towards CMS establishing
a Prospective Payment Model for OPPS
• Goal: eliminate avoidable costs and increase shared decision
making
• Healthcare stakeholders who have been on the sidelines for
recent CMS pilots and existing programs will not have this
luxury as CMS expands their delivery and payment reform
portfolio in the upcoming calendar year
Thank you!
Contact Information:
Walter Coleman
Walter.Coleman@dhgllp.com
(804) 474-1248