{Current Issues Update}
HFMA Central Ohio Chapter
November 19, 2015
Are You Ready for the Transition from Volume to Value?
{Presenter}
Jeff Heaphy, NHA
Partner
Jeff.Heaphy@plantemoran.com
614.222.9035
What are bundled payments?
ENCOURAGE BETTER CARE COORDINATION AND CASE
MANAGEMENT
ACHIEVE QUALITY OUTCOMES WITH COST
EFFECTIVENESS
• TRIGGERED BY HOSPITALADMISSION (MODEL 2) OR POST ACUTE
SERVICE OCCURRING AFTER HOSPITAL DISCHARGE (MODEL 3)
• 2100+ PROVIDERS PARTICIPATING IN VOLUNTARY BUNDLED
PAYMENTS FOR CARE IMPROVEMENT INITIATIVE (BPCI)
• All models, with episode lengths of 30, 60 and 90 days
• HOSPITALS IN 75 MSAS TO PARTICIPATE IN 90 DAY MODEL 2 TYPE
MANDATORY BUNDLED PAYMENT PROGRAM IN 2016
• Comprehensive Care for Joint Replacement (CCJR) – DRGs 469 and 470
1
Why are bundled payments important?
• CONTROL ESCALATING UTILIZATION AND COST WITH
EMPHASIS ON POST ACUTE SERVICES AND HOSPITAL
READMISSIONS
• PROVIDE DATA IN SUPPORT OF STANDARDIZATION OF
POST ACUTE CARE (PAC) ASSESSMENT AND PAYMENT
REQUIRED BY THE IMPACT ACT OF 2014
• ALLOW CMS TO TEST COST AND QUALITY OUTCOMES
RELATED TO CURRENT CMS REQUIREMENTS (3 DAY
HOSPITAL STAY)
• TWO MODEL FORMAT ALLOWS CMS TO TEST WHETHER
UTILIZATION, COST AND QUALITY CHANGES IF EPISODE IS
TRIGGERED AT HOSPITAL OR PAC SETTING
2
Bundled Payment Models
3
©2014 Trinity Health - Livonia, MI
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Comprehensive Care for Joint Replacement Model
Overview of Proposed Rule
Background
•
CMS is working to support the development and testing of new and innovative
health care payment and service delivery models
•
The goal of these new models is to provide better care and lower costs through
the improvement of the health care system: 50% of all fee for service payments
will be made under alternative payment models by 2018.
•
Hip and knee replacements are the most common inpatient surgeries for
Medicare beneficiaries and can carry lengthy recovery periods
•
•
The cost and quality of care for these replacement surgeries can greatly vary
•
•
4
In 2013, there were more than 400,000 inpatient procedures costing more than $7 billion
in hospitalization alone
The total Medicare expenditures for surgery, hospitalization, and recovery can range
from $16,500 to $33,000 across geographic areas (CMS $100-$200 savings)
This new proposed model is meant to address the way Medicare beneficiaries
receive care by focusing on coordinated and patient-centered care
Comprehensive Care for Joint Replacement Model
Overview of Proposed Rule
Goals of the program
5
•
To incentivize hospitals to provide better care coordination through the
whole episode of care from surgery to recovery
•
Increase Hospital accountability for the quality and cost of services they
are providing
•
This coordination aims to improve the consumer care experience by
leading to better patient health outcomes
•
These improved outcomes include:
• Fewer post-surgery complications
• Lower hospital readmission rates
• Fewer preventable infections
• Less prolonged rehabilitation and recovery periods
• More consistent costing
Comprehensive Care for Joint Replacement Model
CCJR Model Design
The Basics
• The Comprehensive Care for Joint Replacement Model (CCJR) is proposed to be a
5 year mandatory program
• The performance period will run from April 1, 2016 to December 31, 2020
• The model will test bundled payments for lower extremity joint replacements (LEJR)
across a broad cross-section of hospitals nationwide
• The model will be in 67 geographic areas (MSAs) throughout the country including
the following areas in Ohio:
• Akron (Portage & Summit Counties)
• Toledo (Fulton, Lucas & Wood Counties)
• Cincinnati OH-KY-IN (Dearborn, Ohio, Union, Boone, Bracken, Campbell,
Gallatin, Grant, Kenton, Pendleton, Brown, Butler, Clermont, Hamilton &
Warren Counties)
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Comprehensive Care for Joint Replacement Model
CCJR Model Design
Participants
• Participants include IPPS hospitals in the 67 designated MSAs
• The only hospitals exempt from participating are those currently participating in Model 1 or
Phase II of Models 2 or 4 of the Bundled Payments for Care Improvement (BPCI) initiative
• Hospitals outside of the 67 designated MSAs are not able to voluntarily participate (there is no
application process for this model)
• The hospital in which the hip or knee replacement surgery takes place would be
accountable for the costs and quality of care
• Episodes are defined as beginning with admission of a Medicare FFS beneficiary to
the hospital and will continue for 90 days following date of discharge
• Episodes are triggered by hospitalizations of Medicare FFS beneficiaries discharged with a
diagnoses code of:
• MS-DRG 469 – Major joint replacement or reattachment of lower extremity with major
complication or comorbidities
• MS-DRG 470 – Major joint replacement or reattachment of lower extremity without major
complications or comorbidities
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Comprehensive Care for Joint Replacement Model
CCJR Model Design
Beneficiaries
•
The CCJR Bundled Payment will pay for the care of Medicare beneficiaries
where Medicare is the primary payer and the beneficiary is:
• Not enrolled in a managed care plan
• Enrolled in Medicare Part A & B through the duration of the episode
• Not Medicare eligible on the basis of End-Stage Renal Disease (ESRD)
• Not covered under a United Mine Workers of America health plan
•
8
Beneficiaries will continue to choose their providers including their doctor,
hospital, nursing facility, home health agency, and any other providers necessary
for care
Comprehensive Care for Joint Replacement Model
CCJR Model Design
Episodes
• All Part A and Part B services related to the episode would be included with the
exception of certain excluded services that are clinically unrelated to the episode
•
The following services are included in the
CCJR episode:
•
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Inpatient hospital services (including
readmissions)
•
Physicians’ services
•
Long-term care hospital services (LTCH)
•
Inpatient rehabilitation facility services (IRF)
•
Skilled nursing facility services (SNF)
•
Home health agency services (HHA)
•
Inpatient psychiatric facility services (IPF)
•
Hospice services
•
Hospital outpatient services
•
Independent outpatient therapy services
•
Clinical laboratory services
•
Durable medical equipment (DME)
•
Part B Drugs
•
The following services are excluded in
the CCJR episode because they are
unrelated:
•
Acute clinical conditions not arising from
existing episode related chronic
conditions or complications of LEJR
Surgery
•
Chronic conditions that are generally not
affected by the LEJR procedure or postsurgical care
Comprehensive Care for Joint Replacement Model
CCJR Model Design
Pricing and Payment
•
The CCJR model is a retrospective bundled payment model which means CMS will continue to
pay each provider individually under the existing Medicare payment system
•
Payment will be set at the start of each performance year during the 5 years of the
demonstration
•
The target price (set annually) will be set at the mean episode payment for each MSA based on
claims with admission dates from 7/1/2011 to 6/30/2014 (wage adjusted using the hospital wage
index)
•
The target price will incorporate a blend of the historical hospital-specific spending and
regional spending and the regional spending component of the episode target price will
increase over time
• Year 1 & 2 – 1/3 Regional & 2/3 Facility Specific
• Year 3 – 2/3 Regional & 1/3 Facility Specific
• Year 4 & 5 – 100% Regional
•
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Starting in 2017, CMS will phase in a 1% discount to the episode payment, and this discount will
increase to 2% for all remaining years
Comprehensive Care for Joint Replacement Model
CCJR Model Design
Pricing and Payment Continued…
•
Following completion of a model performance year actual episode spending will be
compared to the target price
•
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Actual episode spending includes the total expenditures for all related services
under Medicare Parts A & B
•
Hospitals that achieve actual spending below the target price and meet quality
performance thresholds would be eligible to earn a reconciliation payment for the
difference, up to a specified cap
•
Conversely, hospitals whose actual spending exceeds the target price would be
responsible for paying the difference back to Medicare up to a specified repayment
limit
•
During the first year of the Model program hospitals will not be responsible for
any repayment penalties
•
The repayment amount limit will increase in Year 3 of the model
Comprehensive Care for Joint Replacement Model
CCJR Model Design
Pricing and Payment Limits
•
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Episode payments are capped at 2 standard deviations above the regional
mean (higher payment outlier ceiling)
•
This cap is for calculating target prices and for comparing actual episode payments to
target prices
•
There is no cap for payments to providers and suppliers under Medicare FFS for
episode services
•
Reconciliation payments are capped at 20% of target prices (stop-gain)
•
Hospital payback to Medicare is phased-in and capped (stop-loss):
•
Year 1: No responsibility to repay Medicare
•
Year 2: Capped at 10% of Target Prices – changing as of 11/16/15
•
Years 3-5: Capped at 20% of Target Prices – changing as of 11/16/15
Comprehensive Care for Joint Replacement Model
Historical Payments & Pricing Ceilings
Region
New England
Middle Atlantic
East North Central
West North Central
South Atlantic
East South Central
West South Central
Mountain
Pacific
Regional Historical Average CCJR
Payments
MS-DRG 469
MS-DRG 470
$47,928
$24,858
$52,028
$27,406
$50,954
$25,480
$46,189
$23,800
$51,239
$25,989
$50,328
$26,345
$55,448
$27,464
$47,925
$23,734
$48,874
$23,425
Regional High
Payment Ceiling
MS-DRG 469
MS-DRG 470
$93,682
$48,433
$102,359
$55,615
$102,222
$53,548
$100,992
$51,357
$106,332
$53,516
$101,762
$55,965
$113,995
$61,418
$99,425
$50,841
$110,168
$50,527
Region
States Included
New England
CT, MA, ME, NH, RI, VT
Middle Atlantic
NJ, NY, PA
East North Central
IL, IN, MI, OH, WI
West North Central
IA, KS, MN, MO, NE, ND, SD
South Atlantic
DC, DE, GA, FL, NC, SC, VA, WV
East South Central
AL, KY, MS, TN
West South Central
AR, LA, OK, TX
Mountain
AZ, CO, ID, MT, NM, NV, UT, WY
Pacific
AK, CA, HI, OR, WA
*Maryland is excluded from the calculations, as proposed
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Comprehensive Care for Joint Replacement Model
CCJR Model Design
Quality Measures
•
The CCJR Model is adopting a quality first principal
•
This means participant hospitals are required to achieve minimum performance
requirements on three quality measures before they are eligible to receive any
reconciliation payments:
•
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•
Hospital-Level Risk-Standardized Complication Rate (RSCR) Following Elective Primary Total
Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) (NQF #1550)
•
Hospital-Level 30-day, All-Cause Risk-Standardized Readmission Rate (RSRR) Following
Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) (NQF
#1551)
•
Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) (NQF
#0166) Survey
Quality performance requirements for reconciliation payment eligibility will increase
over the life of the model to incentivize continuous improvement
Comprehensive Care for Joint Replacement Model
CCJR Model Design
Quality Measures Continued…
•
Hospitals will have an additional opportunity to have reconciliation payments adjusted
each year if they successfully submit complete data on a patient-reported functional
outcome measure, Hospital-Level Performance Measure(s) of Patient-Reported
Outcomes Following Elective Primary Total Hip and/or Total Knee Arthroplasty,
beginning in performance year 1
•
In addition to the required quality measures, the CCJR model incentivizes hospitals to
avoid expensive and harmful events (i.e. complications & readmissions) since they will
increase episode spending and reduce opportunity for reconciliation payments
•
CMS will provide additional tools to participating hospitals to improve the effectiveness
of care coordination. These include:
• Spending & utilization data
• Waiving certain Medicare requirements to encourage flexibility in the delivery of
care
• A Learning and diffusion program which would facilitate the sharing of best
practices between participant hospitals
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Comprehensive Care for Joint Replacement Model
CCJR vs. Other Programs
Overlap with BPCI
•
Hospitals in BPCI Model 1 or BPCI Models 2 or 4 Phase II would remain in BPCI for
the LEJR episode
•
BPCI Phase II participants that terminate from a BPCI model and are located in one
of the 67 CCJR MSAs would be required to participate in CCJR
•
Hospitals not currently in BPCI may not elect to participate in the program in lieu of
participation in the CCJR Model
•
BPCI Model 2 & 3 episodes initiated by a participating physician group or PAC
facility take precedence over CCJR episodes
Overlap with ACOs & Other Models
•
Hospitals participating in the CCJR program may also participate in ACOs
•
The financial reconciliations under CCJR and other CMS models and programs will
to the extent feasible account for all Medicare Trust Fund payments for
beneficiaries in those models and programs and generally ensure that Medicare
saves the expected 2% discount on CCJR episodes
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Comprehensive Care for Joint Replacement Model
Collaborating
Financial Arrangements
•
Participant hospitals can create arrangements with collaborators to
support their efforts to reduce costs and improve quality
•
Collaborators can include many different providers on the continuum of
care including but not limited to: Physicians, SNFs, HHAs, and Inpatient
Rehab Facilities
•
Hospitals can share with collaborators both reconciliation payments and
internal cost savings realized
•
In addition to sharing savings hospitals will also share with collaborators
in risk
• Hospital’s sharing in the financial accountability for increased episode
spending is proposed to be limited to 50% of total repayment to CMS
• Hospital can not share more than 25% of its repayment responsibility
with any one provider
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Comprehensive Care for Joint Replacement Model
Program Waivers
SNF 3-Day Stay
• CCJR will waive the SNF 3-Day rule beginning in performance year 2
• Beneficiaries discharged pursuant to the waiver must be transferred to SNFS with a 3
Star rating for at least 7 of the preceding 12 months
Home Visits
• CCJR will waive the “incident to” rule for physician services
• Waiver allows for a maximum of 9 visits during the episode, billed under the
Physician Fee Schedule using a HCPCS code created specifically for the model
Telehealth
•
Waives geographic site requirement and originating site requirement to permit
telehealth visits to originate in the beneficiary’s home or place of residence
•
Telehealth visits cannot substitute for in-person home health services paid under
home health prospective payment system
•
Telehealth services must be furnished in accordance with Medicare coverage and
payment criteria
•
Facility fee paid by Medicare to an originating site for a telehealth service is waived
if service originated in the beneficiary’s home
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Comprehensive Care for Joint Replacement Model
Risks & Opportunities
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Opportunities
Risks
•
• Hospital Centric
SNF payer does not change as
hospital is at risk for spending and
quality
•
Hospitals may share in savings
with SNFs
•
SNFs may gain volume from
LTCHs & IRFs
•
3-Day Stay waiver for SNFs with
3+ Stars
•
SNFs with positive patient
outcomes, low LOS, and reduced
rehospitalization rates will be
attractive partners
• Reduced or loss of control over practice
and placement
• Loss of volume to Home Health
• Significant revenue risk
• Only 3+ star facilities likely to be included
in networks
Next Steps
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1.
Gather data around volume of LEJR patients at hospitals and whom are the
downstream partners of these hospitals
2.
Track episodic cost data with and without readmission to the hospital
3.
Know your value proposition to the bundle: What is my episodic spend compared to
others? What is my average length of stay to others in my area? What is my
readmission rate compared to others in my area?
4.
Post acute care providers must:
• Transition to an electronic documentation platform
• Redesign clinical delivery patterns to enhance patient outcomes and lower
readmissions
• Understand cost data in a whole new way: integration of cost and outcome data
• Network development: need to be included to stay relevant
Statistics
Historical Quantitative Information
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Comprehensive Care for Joint Replacement Model
Cost & Length of Stay Statistics
Cost and Length of Stay Statistics for MS-DRG 470 for Various Episode Durations
Average PAC LOS = 47.3 days
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Comprehensive Care for Joint Replacement Model
State Statistics
Major joint replacement of the lower extremity
State
Number of episodes
14751
Percent of episodes with a rehospitalization
12%
Length of stay at initiator
3.21
Average episode payment
$ 20,882.52
Average payment for episode with a rehospitalization
$ 36,455.86
Average payment for episode without a rehospitalization $ 18,829.65
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Source: LeadingAge Webinar 8/26/15
Comprehensive Care for Joint Replacement Model
State Statistics
Discharge Destination From First Site of Care
Distribution of Episode Payment
$1,535
$1,035
$5,150
$11,763
Length of Stay
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Source: LeadingAge Webinar 8/26/15
$1,313
Readmission
Questions?