June 23, 2008 The Hospital’s Bottom Line in an Era of Value-Based Purchasing A webinar for Philips customers that tells you what Medicare is planning and

June 23, 2008

The Hospital’s Bottom Linein an Era of Value-Based Purchasing

A webinar for Philips customers thattells you what Medicare is planningand what it means for you…

CONFIDENTIAL June 23, 2008 2

The Hospital’s Bottom Linein an Era of Value-Based Purchasing

Presenters:Thomas Valuck, MD, JD, Medical Officer & Senior Adviser, Center for Medicare Management, Centers for Medicare and Medicaid Services, Washington, DC

Ann Edwards, Director, Health Industries Advisory Practice, PricewaterhouseCoopers, Hartford, CT

Moderator:

Laurel Sweeney, Senior Director, Reimbursement and Legislative Affairs, Philips Healthcare, Andover, MA

Procurement Sensitive

Thomas B. Valuck, MD, JDMedical Officer & Senior Adviser

Center for Medicare Management

Centers for Medicare & Medicaid ServicesCenters for Medicare & Medicaid Services

CMS’ Progress Toward CMS’ Progress Toward Implementing Implementing

Value-Based PurchasingValue-Based Purchasing


Presentation OverviewPresentation Overview

CMS’ Value-Based Purchasing (VBP) Principles

CMS’ VBP Demonstrations and Pilots CMS’ VBP Programs Value-Driven Health Care Horizon Scanning and Opportunities for

Participation


CMS’ Quality Improvement CMS’ Quality Improvement RoadmapRoadmap

Vision: The right care for every person every time Make care:

Safe Effective Efficient Patient-centered Timely Equitable


CMS’ Quality Improvement CMS’ Quality Improvement RoadmapRoadmap

Strategies Work through partnerships Measure quality and report comparative

results Value-Based Purchasing: improve quality

and avoid unnecessary costs Encourage adoption of effective health

information technology Promote innovation and the evidence

base for effective use of technology


What Does VBP Mean to CMS?What Does VBP Mean to CMS?

Transforming Medicare from a passive payer to an active purchaser of higher quality, more efficient health care

Tools and initiatives for promoting better quality, while avoiding unnecessary costs

Tools: measurement, payment incentives, public reporting, conditions of participation, coverage policy, QIO program

Initiatives: pay for reporting, pay for performance, gainsharing, competitive bidding, coverage decisions, direct provider support


Why VBP?Why VBP?

Improve Quality Quality improvement opportunity

Wennberg’s Dartmouth Atlas on variation in care McGlynn’s NEJM findings on lack of evidence-

based care IOM’s Crossing the Quality Chasm findings

Avoid Unnecessary Costs Medicare’s various fee-for-service fee

schedules and prospective payment systems are based on resource consumption and quantity of care, NOT quality or unnecessary costs avoided Payment systems’ incentives are not aligned

Practice VariationPractice Variation

Practice Variation


Why VBP?Why VBP?

Medicare Solvency and Beneficiary Impact Expenditures up from $219 billion in 2000 to a

projected $486 billion in 2009 Part A Trust Fund

Excess of expenditures over tax income in 2007 Projected to be depleted by 2019

Part B Trust Fund Expenditures increasing 11% per year over the last 6

years Medicare premiums, deductibles, and cost-

sharing are projected to consume 28% of the average beneficiaries’ Social Security check in 2010

Workers per Medicare Workers per Medicare BeneficiaryBeneficiary

Selected Years

0

50

100

150

200

1966 2008 2028

in m

illi

on

s

CoveredWorkers

Part Aenrollment

Source: OACT CMS and SSA

Worker to Beneficiary Ratio

4.46 3.39 2.49

0%

3%

6%

9%

12%

1966 1976 1986 1996 2006 2016 2026 2036 2046 2056 2066 2076

Calendar year

Historical Estimated

Payroll taxesTax on benefits

Premiums

General revenue transfers

Total expenditures

HI deficit

State transfers

Under Current Law, Medicare Will Place AnUnprecedented Strain on the Federal Budget

Source: 2008 Trustees Report

Per

cen

tag

e o

f G

DP


Support for VBPSupport for VBP

President’s Budget FYs 2006-09

Congressional Interest in P4P and Other Value-Based Purchasing Tools BIPA, MMA, DRA, TRCHA, MMSEA

MedPAC Reports to Congress P4P recommendations related to quality, efficiency, health

information technology, and payment reform IOM Reports

P4P recommendations in To Err Is Human and Crossing the Quality Chasm

Report, Rewarding Provider Performance: Aligning Incentives in Medicare

Private Sector Private health plans Employer coalitions


VBP Demonstrations and PilotsVBP Demonstrations and Pilots

Premier Hospital Quality Incentive Demonstration

Physician Group Practice Demonstration Medicare Care Management Performance

Demonstration Nursing Home Value-Based Purchasing

Demonstration Home Health Pay-for-Performance

Demonstration ESRD Bundled Payment Demonstration ESRD Disease Management

Demonstration


VBP Demonstrations and PilotsVBP Demonstrations and Pilots

Medicare Health Support Pilots Care Management for High-Cost

Beneficiaries Demonstration Medicare Healthcare Quality Demonstration Gainsharing Demonstrations Accountable Care Episode (ACE)

Demonstration Better Quality Information (BQI) Pilots Electronic Health Records (EHR)

Demonstration Medical Home Demonstration

Premier Hospital Quality Premier Hospital Quality Incentive DemonstrationIncentive Demonstration


VBP ProgramsVBP Programs

Hospital Quality Initiative: Inpatient & Outpatient Hospital VBP Plan & Report to Congress Hospital-Acquired Conditions & Present on Admission

Indicator Physician Voluntary Reporting Program Physician Quality Reporting Initiative Physician Resource Use Home Health Care Pay for Reporting Medicaid


VBP Initiatives VBP Initiatives

Hospital-Acquired Conditions and Present on

Admission Indicator Reporting


The HAC ProblemThe HAC Problem

The IOM estimated in 1999 that as many as 98,000 Americans die each year as a result of medical errors

Total national costs of these errors estimated at $17-29 billionIOM: To Err is Human: Building a Safer Health System, November 1999. Available at: http://www.iom.edu/Object.File/Master/4/117/ToErr-8pager.pdf.



In 2000, CDC estimated that hospital-acquired infections add nearly $5 billion to U.S. health care costs annually

Centers for Disease Control and Prevention: Press Release, March 2000. Available at: http://www.cdc.gov/od/oc/media/pressrel/r2k0306b.htm.

A 2007 study found that, in 2002, 1.7 million hospital-acquired infections were associated with 99,000 deathsKlevens et al. Estimating Health Care-Associated Infections and Deaths in U.S. Hospitals, 2002. Public Health Reports. March-April 2007. Volume 122.

http://www.cdc.gov/od/oc/media/pressrel/r2k0306b.htm



A 2007 Leapfrog Group survey of 1,256 hospitals found that 87% of those hospitals do not consistently follow recommendations to prevent many of the most common hospital-acquired infections2007 Leapfrog Group Hospital Survey. The Leapfrog Group 2007.

Available at: http://www.leapfroggroup.org/media/file/Leapfrog_hospital_acquired_infections_release.pdf


Statutory Authority: Statutory Authority: DRA Section 5001(c)DRA Section 5001(c)

Beginning October 1, 2007, IPPS hospitals were required to submit data on their claims for payment indicating whether diagnoses were present on admission (POA)

Beginning October 1, 2008, CMS cannot assign a case to a higher DRG based on the occurrence of one of the selected conditions, if that condition was acquired during the hospitalization


Statutory Selection CriteriaStatutory Selection Criteria

CMS must select conditions that are:1. High cost, high volume, or both2. Assigned to a higher paying DRG when

present as a secondary diagnosis3. Reasonably preventable through the

application of evidence-based guidelines

MS-DRG Assignment(Examples for a single secondary diagnosis)

POA Status of Secondary

Diagnosis

Average Payment

Principal Diagnosis: MS-DRG 066 Stroke without CC/MCC

-- $5,347.98

Principal Diagnosis: MS-DRG 065 Stroke with CCExample Secondary Diagnosis: Injury due to a fall (code 836.4 (CC))

Y $6,177.43

Principal Diagnosis: MS-DRG 065 Stroke with CCExample Secondary Diagnosis: Injury due to a fall (code 836.4 (CC))

N $5,347.98

Principal Diagnosis: MS-DRG 064 Stroke with MCCExample Secondary Diagnosis: Stage III pressure ulcer (code 707.23 (MCC))

Y $8,030.28

Principal Diagnosis: MS-DRG 064 Stroke with MCCExample Secondary Diagnosis: Stage III pressure ulcer (code 707.23 (MCC))

N $5,347.98


HACs Selected During HACs Selected During IPPS FY 2008 RulemakingIPPS FY 2008 Rulemaking

Foreign object retained after surgery Air embolism Blood incompatibility Catheter-associated urinary tract

infection Vascular catheter-associated infection Surgical site infection – mediastinitis

after CABG Pressure ulcers Falls – specific trauma codes


Candidate HACsCandidate HACs

Surgical site infections following specific elective procedures

Staphylococcus aureus septicemia Clostridium difficile-associated disease (CDAD) Ventilator-associated pneumonia (VAP) Deep vein thrombosis (DVT) / pulmonary embolism (PE) Legionnaires’ Disease Iatrogenic pneumothorax Delirium Extreme glycemic aberrancies


Methicillin-Resistant Methicillin-Resistant Staph. Staph. aureus aureus (MRSA)(MRSA)

Directly addressed, as MRSA could be the cause of any of the selected infectious conditions

Presence of MRSA as a colonizing bacterium does not constitute an HAC

Presence of MRSA is not a CC or MCC


POA Indicator POA Indicator General RequirementsGeneral Requirements

Present on admission is defined as present at the time the order for inpatient admission occurs Conditions that develop during an outpatient

encounter, including emergency department, observation, or outpatient surgery, are considered present on admission

Phased implementation


POA Indicator POA Indicator General RequirementsGeneral Requirements

POA indicator is assigned to Principal diagnosis Secondary diagnoses External cause of injury codes

(Medicare requires reporting only if E-code is reported as an additional diagnosis)

POA Indicator Reporting OptionsPOA Indicator Reporting Options

POA Indicator Options and Definitions

Code Reason for Code

Y Diagnosis was present at time of inpatient admission.

N Diagnosis was not present at time of impatient admission.

U Documentation insufficient to determine if condition waspresent at the time of inpatient admission.

W Clinically undetermined. Provider unable to clinically determine whether the condition was present at the time of inpatient admission.

1 Unreported/Not used. Exempt from POA reporting. This code is equivalent code of a blank on the UB-04; however, it was determined that blanks are undesirable when submitting this data via the 4010A.


POA Indicator ReportingPOA Indicator ReportingIPPS FY 2009 Proposed RuleIPPS FY 2009 Proposed Rule

POA indicator CMS is proposing to pay the CC/MCC

for HACs that are coded as “Y” & “W”

CMS is proposing to NOT pay the CC/MCC for HACs that are coded “N” & “U”


POA Indicator Reporting POA Indicator Reporting Requires Accurate Requires Accurate

DocumentationDocumentation

“ A joint effort between the healthcare provider and the coder is essential to achieve complete and accurate documentation, code assignment, and reporting of diagnoses and procedures.”

ICD-9-CM Official Guidelines for Coding and Reporting


HAC & POAHAC & POAEnhancement & Future IssuesEnhancement & Future Issues

CMS seeks public comment on enhancements to the HAC payment provision in the IPPS FY 2008 proposed rule Risk adjustment Rates of HACs for VBP Uses of POA information Adoption of ICD-10 Expansion of the IPPS HAC payment provision

to other settings Relationship to NQF’s Serious Reportable

Adverse Events


Relationship of HACs to Relationship of HACs to NQF’s “Never Events”NQF’s “Never Events”

In 2002, NQF created a list of 27 Serious Reportable Adverse Events, which was expanded to 28 events in 2006

Of the HACs selected during IPPS FY 2008 rulemaking, 7 are on NQF’s list

Of the HACs candidates under consideration during IPPS FY 2009 rulemaking, 1 overlaps with NQF’s events


Relationship of HACs to Relationship of HACs to NQF’s “Never Events”NQF’s “Never Events”

NQF’s selection criteria for Serious Reportable Adverse Events Unambiguous: clearly identifiable and measurable Usually preventable: recognizing that some

events are not always avoidable Serious: resulting in death or loss of a body part,

disability, or more transient loss of a body function

Indicative of a problem in a health care facility’s safety systems

Important for public credibility or public accountability

NQF’s Serious Reportable Adverse Events HAC

Surgical Events

Surgery on wrong body part

Surgery on wrong patient

Wrong surgery on a patient

Foreign object left in patient after surgery Selected

Post-operative death in normal health patient

Implantation of wrong egg

Product or Device Events

Death/disability associated with use of contaminated drugs, devices, or biologics

Death/disability associated with use of device other than as intended

Death/disability associated with intravascular air embolism

Selected

Current NQF Serious Reportable Adverse Events HAC

Patient Protection Events

Infant discharged to wrong person

Death/disability due to patient elopement

Patient suicide or attempted suicide resulting in disability

Care Management Events

Death/disability associated with medication error

Death/disability associated with incompatible blood Selected

Maternal death/disability with low risk delivery

Death/disability associated with hypoglycemia Candidate

Death/disability associated with hyperbilirubinemia in neonates

Stage 3 or 4 pressure ulcers after admission Selected

Death/disability due to spinal manipulative therapy

Current NQF Serious Reportable Adverse Events HAC

Environment Events

Death/disability associated with electric shock Selected

Incident due to wrong oxygen or other gas

Death/disability associated with a burn incurred withinfacility

Selected

Death/disability associated with a fall within facility Selected

Death/disability associated with use of restraints within facility

Criminal Events

Impersonating a heath care provider (i.e., physician, nurse)

Abduction of a patient

Sexual assault of a patient within or on facility grounds

Death/disability resulting from physical assault within or on facility grounds


Combating Never EventsCombating Never Events

HAC payment provision Conditions of Participation VBP Plan—measurement, financial incentives, and

public reporting Coverage policy Quality Improvement Organization (QIO) 8th and 9th

Scopes of Work The President’s FY 2009 Budget proposal

1. Prohibit hospitals from billing Medicare for never events

2. Require hospitals to report occurrence of these events or receive a reduced annual payment update


Opportunities for HAC & POA Opportunities for HAC & POA InvolvementInvolvement

IPPS Rulemaking IPPS FY 2009 proposed rule on display April

14, 2008 60 day comment period ended on June

13, 2008 IPPS FY 2009 final rule released in August

2008

Updates to the CMS HAC & POA website: www.cms.hhs.gov/HospitalAcqCond/

Hospital Open Door Forums Hospital Listserv Messages

http://www.cms.hhs.gov/HospitalAcqCond/


VBP Programs VBP Programs

Hospital Value-Based Purchasing


Hospital Quality InitiativeHospital Quality Initiative

MMA Section 501(b) Payment differential of 0.4% for reporting

(hospital pay for reporting) FYs 2005-07 Starter set of 10 measures High participation rate (>98%) for small

incentive Public reporting through CMS’ Hospital

Compare website


Hospital Quality InitiativeHospital Quality Initiative

DRA Section 5001(a) Payment differential of 2% for reporting (hospital

P4R) FYs 2007- “subsequent years” Expanded measure set, based on IOM’s December

2005 Performance Measures Report Expanded measures publicly reported through

CMS’ Hospital Compare website

DRA Section 5001(b) Report for hospital VBP beginning with FY 2009

Report must consider: quality and cost measure development and refinement, data infrastructure, payment methodology, and public reporting

Hospital VBP Workgroup Hospital VBP Workgroup Tasks & TimelineTasks & Timeline

Environmental Scan Issues Paper Listening Session #1 for

Stakeholder Input on Issues Paper Options Paper Listening Session #2 for Input on

Hospital VBP Options Paper Final Design Final Report, Including Design,

Process, and Environmental Scan Report Submitted to Congress

2006Oct

Dec

2007Jan 17

Apr 12

May

June

Nov 21


Performance Model OverviewPerformance Model Overview

Hospitals submit data for all VBP measures that apply

CMS determines each hospital’s performance score on each measure: higher of 0 - 10 points on attainment or improvement

For each hospital, CMS aggregates scores across all measures within a domain (e.g., clinical process-of-care measures, HCAHPS)

CMS weights and combines each hospital’s domain scores to determine the hospital’s Total Performance Score

CMS translates each hospital’s Total Performance Score into an incentive payment using an exchange function

Earning Clinical Process of Care Earning Clinical Process of Care Points: ExamplePoints: Example

Measure: PN Pneumococcal Vaccination

Attainment Threshold.47

Benchmark.87

Attainment Range

performance

Hospital I

baseline•.21.70•

Attainment Range1 2 3 4 5 6 7 8 9

Hospital I Earns: 6 points for attainment 7 points for improvement

Hospital I Score: maximum of attainment or improvement= 7 points on this measure

Improvement Range1 2 3 4 5 6 7 8 9• • • • • • • • •

• • • • • •• • •

Score

Score


Calculation of Clinical Process of Calculation of Clinical Process of Care Performance ScoreCare Performance Score

Total Earned Points = Sum of points earned across all reported measures

Total Possible Points = Number of measures reported by hospital x 10

Clinical Process of Care Performance Score =

Total Earned Points / Total Possible Points x 100

Dimension: Doctor Communication

Attainment Threshold Benchmark

Attainment Range

performance

Hospital I

baseline •42nd 63rd

•Attainment Range

Improvement Range

Hospital I Earns: 3 points for attainment4 points for improvement

Hospital I Score: maximum of attainment or improvement= 4 points on this measure

50th Baseline Percentile


Score

Score

1 2 3 4 5 6 7 8 9 10

1 2 3 4 5 6 7 8 9

Earning HCAHPS Points: ExampleEarning HCAHPS Points: Example

Attainment Threshold

lowest performance

Hospital I

Minimum Percentile Point Range

Hospital L’s Lowest Percentile: 6th Hospital L Earns: 2 minimum percentile points

Hospital I’s Lowest Percentile: 18th Hospital I Earns: 8 minimum percentile points

Hospital B’s Lowest Percentile: 67th Hospital B Earns: 20 minimum percentile points



•18th

Score

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

•67th

Score

Hospital B

20 points

6th

•

Score

Hospital L

Earning Points Based on Minimum Performance Earning Points Based on Minimum Performance Across All Eight HCAHPS Dimensions: ExamplesAcross All Eight HCAHPS Dimensions: Examples


Calculation of HCAHPS Calculation of HCAHPS Performance ScorePerformance Score

Total Earned Points = Sum of points earned across all dimensions

Total Possible Points = 100

HCAHPS Performance Score =

Total Earned Points / 100 Total Possible Points x 100


Calculation of Calculation of Total Performance Score Total Performance Score

Each domain of measures is initially scored separately, weighting each measure within that domain equally

All domain scores are then combined, with the potential for different weighting by domain

Possible weighting to combine clinical process measures and HCAHPS: 70% clinical process + 30% HCAHPS

As new domains are added (e.g., outcomes), weights will be adjusted

Translating Performance Score into Incentive Payment: Example

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Percent Of VBP

Incentive Payment Earned

Hospital Performance Score: % Of Points Earned Full Incentive

Earned

Hospital A


Source of Incentive PaymentsSource of Incentive Payments

VBP incentive proposed to be a percent of base operating DRG payment Base payment would include geographic

and DRG relative weight adjustments Approach links incentive payment most

directly to clinical services provided Would apply to all DRGs, not just clinical

areas measured


VBP Measures OverviewVBP Measures Overview

Measure selection considerations Proposed process for introducing and

managing measures in VBP FY 2009 candidate measures for VBP

financial incentive Additional measures for FY 2010 and

beyond Small numbers issue


VBP Data Infrastructure & VBP Data Infrastructure & Validation OverviewValidation Overview

Proposed data submission process Improved data infrastructure Strengthening validation

methodology Proposed changes to sampling


VBP Public Reporting OverviewVBP Public Reporting Overview

Design Considerations Content Suppressing Measures Data Displays Other Transparency Issues


VBP Program VBP Program Monitoring & EvaluationMonitoring & Evaluation

CMS will foster an active learning system to promote breakthrough improvements

Requires real-time program monitoring and systematic evaluation

Ongoing CMS access to patient-level data will be essential

Resources must be dedicated to monitoring and evaluation


VBP Plan Testing & CompletionVBP Plan Testing & Completion

Objectives: Use most current RHQDAPU and Medicare

hospital payment data to test VBP Performance Assessment Model

Complete methodology development Small N Outcome scoring methodology Inclusion of Outcome Domain in determining

Total Performance Score

Examine financial impacts of VBP Incentive


Hospital VBP Report to CongressHospital VBP Report to Congress

The Hospital Value-Based Purchasing Report Congress can be downloaded from the CMS website at:

http://www.cms.hhs.gov/center/hospital.asp




Value-Driven Health CareValue-Driven Health Care

Executive Order

CMS’ Posting of Quality and Cost Information

Better Quality Information for Medicare Beneficiaries Pilots

Chartered Value Exchanges


Value-Driven Health CareValue-Driven Health Care

Executive Order 13410 Promoting Quality and Efficient Health Care in

Government Administered or Sponsored Health Care Programs

Directs Federal Agencies to: Encourage adoption of health information technology

standards for interoperability Increase transparency in healthcare quality

measurements Increase transparency in healthcare pricing information Promote quality and efficiency of care, which may include

pay for performance


Horizon Scanning and Horizon Scanning and Opportunities for ParticipationOpportunities for Participation

IOM Payment Incentives Report Three-part series: Pathways to Quality Health Care

MedPAC Ongoing studies and recommendations regarding VBP

Congress VBP legislation this session?

CMS Proposed Regulations Seeking public comment on the VBP building blocks

CMS Demonstrations and Pilots Periodic evaluations and opportunities to participate


Horizon Scanning and Horizon Scanning and Opportunities for ParticipationOpportunities for Participation

CMS Implementation of MMA, DRA, TRHCA, and MMSEA VBP provisions Demonstrations, P4R programs, VBP planning

Measure Development Foundation of VBP

Value-Driven Health Care Initiative Expanding nationwide

Quality Alliances and Quality Alliance Steering Committee AQA Alliance and HQA adoption of measure

sets and oversight of transparency initiative


Thank YouThank You

Thomas B. Valuck, MD, JDMedical Officer & Senior AdviserCenter for Medicare ManagementCenters for Medicare & Medicaid Services

Ann Edwards, Director, Health Industries Advisory Practice

June 23, 2008

Value Based PurchasingImplementation and Approach

Value Based Purchasing • Implementation and Approach

Practical Approaches to address CMS requirements

• Transition in format from “pay for reporting” to “pay for performance”

• Introduction of drivers for evidenced based quality care and measurement

• This will require true coordination between clinicians, coders and billing office

•This is not ONLY a documentation issue•Cannot be addressed solely as a coding or revenue cycle issue


3 Initiatives – Same Solutions

• Hospital Acquired Conditions

• Present on Admission

• Never Events


Hospital Acquired Conditions (HACs)

Effective 10/01/08, CMS will no longer pay hospital’s for a DRG using the higher paying CC or MCC within one or more of these conditions unless the condition was POA (present on admission)

• Foreign Object Retained After Surgery

• Air Embolism

• Blood Incompatibility

• Stage III and Stage IV Pressure Ulcers

• Falls and Trauma

• Catheter – Urinary Tract Infection

• Vascular Catheter – Infection

• Surgical Site Infection – Mediastinitis after Coronary Artery Bypass Graft


Proposed ChangeHospital Acquired Conditions (HACs)Under Consideration for InclusionSurgical Site Infections Following Elective Surgery:

- Total Knee Replacement - Laparoscopic Gastric Bypass and Gastroenterostomy - Ligation and Stripping of Varicose Veins

Legionnaires Disease- Glycemic Control- Diabetic Ketoacidosis - Nonketotic Hyperosmolar Coma - Diabetic coma - Hypoglycemic Coma

Iatrogenic Pneumothorax

Delirium

Ventilator-Associated Pneumonia

Deep Vein Thrombosis/Pulmonary Embolism

Staphylococcus aureus Septicemia

Clostridium Difficile – Associated Disease

Methicillin-Resistant Staphylococcus aureus


Practical Steps

7

• Clinical teams should review literature of evidence to establish local evidenced based protocols and steps to avoid HACs, and Never Events

• Not the carepaths of yesteryear

• Establish interpretation and documentation expectations for POAs

• Templates to support documentation

• Expectation of compliance with protocols - measure and monitor

• Carrots and sticks• Resources requirements


Practical Steps (cont’d)

• Establish strong and reliable data collection systems that are real time

• Electronic solutions

• Consistent and reliable feedback loop from coding, patient financial services back to clinical services to drive refinement of process

• All for one, one for all

CONFIDENTIAL June 23, 2008 74

For more information, please visit the Philips Healthcare Reimbursement Website at http://www.medical.philips.com/main/reimbursement/

Questions?

Please type your questions into the video player window.The moderator will read the questions to the panelists.

We would appreciate your feedback on this webinar:http://www.surveymonkey.com/s.aspx?sm=4vzMh_2fdYhiH3Q_2bEy4D_2fpug_3d_3d

CONFIDENTIAL June 23, 2008

Ann Edwards is a Director in the Health Industries Advisory Practice. She has over 25 years of health care administrative leadership, operational and consulting experience. Her experience includes the areas of operations improvement in a variety of health care provider settings, including academic medical centers, community hospitals, physician practices and ambulatory care services. In addition, she has led business development projects and advised on strategic planning efforts for a variety of healthcare settings.

PRIOR WORK EXPERIENCE

Engagement leader for financial turn around endeavor for 450 bed community based hospital in the northeast. Addressed operational inefficiencies, restructured internal departments, issues of inappropriate utilization, staffing and supply chain review to reduce unnecessary expenses, improve productivity and maximize capacity.

Facilitates boards of directors, medical staff members, administrative executive teams, middle management as well as front line staff to design and implement comprehensive change processes. Monitor process redesign and implementation to ensure that performance targets are met and maintained.

Lead patient throughput engagements at hospitals across the country focusing on emergency department operations, capacity management, surgical services, patient transportation and supporting IT software implementations.

Directs emergency department redesign engagements in collaboration with architectural firms to optimize work and patient throughput to maximum efficiency.

Conducts operational reviews of care coordination departments; restructuring for maximum organizational effectiveness.

Performs quality metric review and implementation of plan to ensure and maintain consistent performance at benchmark including pay for performance incentive plans.

Hospital Senior Management Team Member during merger and consolidation efforts creating fully integrated health system

Coordinates medical staff development planning and physician enfranchisement strategies for muti-site healthcare system.

Founding partner of 4-hospital joint venture to establish free standing radiation therapy centers in the community setting

.

Ann Edwards, Director, Health Industries Advisory Practice, PricewaterhouseCoopers, Hartford, CT

CONFIDENTIAL June 23, 2008

Dr. Thomas Valuck is Medical Officer and Senior Advisor in the Center for Medicare Management (CMM) at the Centers for Medicare & Medicaid Services (CMS). He advises CMS leadership on policy issues related to Medicare’s payment systems and quality initiatives, particularly pay for performance. Recently, Dr. Valuck served as Director of CMS’ Special Program Office of Value-Based purchasing, which was temporarily created to launch physician and hospital pay for performance. He earned the 2007 Administrator’s Achievement Award for leadership in implementing Medicare pay-for-performance initiatives. Dr. Valuck, a native of Kirksville, Missouri, has degrees in biological science and medicine from the University of Missouri-Kansas City. He took clinical training in pediatrics at the Children’s Mercy Hospital in Kansas City, Missouri, before obtaining a Master’s degree in health services administration from the University of Kansas. Dr. Valuck was employed for over nine years in various executive roles, including Vice President of Medical Affairs, at the University of Kansas Medical Center (KUMed) in Kansas City, Kansas. While at KUMed, Dr. Valuck was awarded the Robert Wood Johnson Health Policy Fellowship, a one year sabbatical during which he served on the staff of the Senate Health, Education, Labor, and Pensions Committee Dr. Valuck relocated to Washington, DC to attend the Georgetown University Law Center where he worked on the Georgetown Journal of Law and Public Policy and earned the BNA Health Law Award and the Federal Legislation Clinic Advocacy Award. As a law student, he worked for the White House Council of Economic Advisers as a health policy assistant to Dr. Mark McClellan, who was the President’s Chief Health Policy Adviser at that time. Before joining CMS, Dr. Valuck was an associate at the law firm of Latham & Watkins, where he practiced regulatory health law.

Thomas B. Valuck, MD, MHSA, JD, Medical Officer & Senior Advisor, Center for Medicare Management, Centers for Medicare and Medicaid Services, Washington, DC

Documents

June 23, 2008 The Hospital’s Bottom Line in an Era of Value-Based Purchasing A webinar for Philips customers that tells you what Medicare is planning and