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Preparing for Value-Based Reimbursement

Tracy Bird, FACMPE, CPC, CPMA, CPC-I, CEMC

Sr. Advisor Education and Consulting

KaMMCO

April 12, 2016

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Objectives

• A look back - how did we get here

• Existing and emerging models of care

• Steps to prepare for the change

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The last 100+ years191019291940’s196519731980’s200720102015

The next 3-5 years

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2016 and Beyond

Current Healthcare Spending

• 17.7% of GDP

• Rising costs of 7%-8% annually

• 36% of GDP by 2030

–No money for education, infrastructure, police, and fire

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Case Study Example

• A patient with hypertension not controlled averages 12 visits per year versus a patient whose hypertension is under control averages 2 visit per year.

• Up to 20% of all Medicare patients are re-admitted within 30 days of discharge due to poor follow up.

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Case Study Example

• Shift change at the hospitals put patients at greater risk for medication errors due to the failure of communication from one shift to another.

• A group of ER docs felt pressured by administration to provide controlled pain medications such as Oxicontin to patients complaining about pain and requesting drugs, in order to yield high patient satisfaction scores.

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Medicare’s Plan for the Future

• End of 2016– 30% payments tied to Alternative Payment

Models ( APM’s)

– 30% payments for ACO’s or Medical Homes

• End of 2018– 50% payment tied to APM’s

– 50% payment for ACO’s, and Medical Homes tied to quality

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Increase Risk

Decrease Cost

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Existing and Emerging Models

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ObjectivesMedicare Goals for Value-Based Reimbursement

Financial Viability Ensure the traditional Medicare fee for service program is protected

Payment incentives Link payment to the value, quality and efficiency of care

Accountability Providers share clinical and financial accountability for healthcare

Effectiveness Care is evidence based and account driven to better manage disease

Ensuring access Ensure patient access to high quality affordable care

Safety and transparency Beneficiaries receive information on the quality, cost and safety of their care

Smooth transitions Payment systems support well-coordinated care across providers and settings

Improved technology EHR’s help providers deliver high quality, efficient and coordinated care

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PQRS

• The first quality reporting program tied to physician payments

• PQRI-PQRS- from voluntary to necessary

• Encourages providers to report quality measures for Medicare patients

• Scheduled to continue until 2018

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Meaningful Use

3 Stages

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2 1

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Meaningful Use

Stage 1Data capture & Sharing

Stage 2Advance clinical processes

Stage 3MU criteria focused on

Electronic capture in standardized format

More rigorous health information exchange

Improve quality, safety, efficiency for improved outcomes

Track key clinical conditions

Increased requirements for e-prescribing and lab results

Decision support for national high priority conditions

Communicate care coordination processes

Electronic transmission of care coordination documents across settings

Patient access to self-management tools

Reporting clinical quality measures and public health information

More patient controlled data

Access to comprehensive patient data through patient centered HIE

Use information to engage patients and their families in their care

Improving populationhealth

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Value Based Payment Modifier

• Performance year is 2015 to be applied in 2017 ( 2016 performance applied in 2018)

• Mandatory quality tiering (upward, neutral, downward)

• VBPM program until 2018

• TINs receiving an upward adjustment -eligible for an additional +1.0x if their average beneficiary risk score is in the top 25%t of all beneficiary risk scores nationwide

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Value Based Payment ModifierInformation Analyzed

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PQRS Quality Measures

Outcomes Measures

Cost Measures

4 Chronic conditions:Diabetes

COPDCAD

Heart Failure

2017 Value Based Payment Modifier2017 All Physicians

Satisfactory 2015 PQRS Reporters•Register for GRPO and meet requirements

•50% of EP’s in group successfully report individually•Solo practitioners successfully report individually

Non-Satisfactory 2015 PQRS ReportersGroups and solo practitioners that do not meet the reporting criteria to avoid the 2017 PQRS penalty

Quality-Tiering Payment Adjustment ( Potential) Payment Penalty Applied

Solo practitioners & groups with up

to 9 EP’s

Groups of physicians with 10 or more EP’s

Upward or neutral adjustment0% to +2X

Solo practitioners and groups with up to 9 EP’s

Groups of physicians with 10 or more EP’s

-2% automatic adjustment in addition to the -2% PQRS penalty

-4% automatic adjustment in addition to the -2% PQRS

penalty

Category 1 Category 2

Upward or neutral or downward adjustment

-4% to +4X17

Value Based Payment Modifier

Reportingyear

Modifier Year

Providers Impacted

2013 2015 Groups with 100+Eligible professionals

2014 2016 Groups with 10+Eligible professionals

2015 2017 All Physicians

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•Physicians not participating in PQRS receive automatic VBM penalty•Opportunity for additional bonuses or penalties under quality tiering

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2018 Value Modifier 10+ EP’s• Successfully reported in 2017

• Quality tiering applies

• Non-Physician Practitioners included: PA, NP, CRNA, CNS

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Cost/Quality Low Quality Average Quality

High Quality

Low cost +0.0% +1.0X* +2.0X*

Average Cost -1.0% +0.0% +1.0X*

High Cost -2.0% -1.0% +0.0%

* Eligible for additional +1.0X if reporting PQRS quality measures and average beneficiary risk score is in the top 25% of all beneficiary risk scores

2018 Value Modifier for Groups 2-9 & Solo EP’s

• Unsuccessful reporters received automatic -2.0% adjustment

• Quality tiering applies with a maximum of +2.0X

• Held harmless for downward adjustments for poor performance

• This policy mirrors how VM is applied to first year groups & solo providers

• Non-Physician Practitioners included: PA, NP, CRNA, CNS

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Cost/Quality Low Quality Average Quality High Quality

Low Cost +0.0% +1.0X* +2.0X*

Average Cost +0.0% +0.0 +1.0X*

High Cost +0.0% +0.0% +0.0%

* Eligible for an additional +1.0X if reporting PQRS quality measures and average beneficiary risk score is in the top 25% of all beneficiary risk scores

Accountable Care Organizations

• Groups that can include physicians, hospitals and other healthcare providers

• Voluntary commitment

• Provide coordinated high quality care at lower cost

• Right care, right time, right provider

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Today’s model of care

ACO model

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Accountable Care Organizations3 Core Principles of an ACO

Provider led- strong primary care-accountable for quality and cost

Payment linked to quality improvement

Use of sophisticated performance measures - Proving savings come from improvements in care

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ACO Models

• Pioneer

• Shared Savings

• Advance Payment

• Next Generation

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Patient Centered Medical Home

• This is a primary care designation providers have adopted to better coordinate care of a group of patients

• It has been viewed as a vehicle to re-build primary care

• Approximately 8200 practices have been recognized as NCQA PCMH.

• Joint Commission also has a

designation for primary care medical home

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Key Elements of PCMH

• A personal physician who provides continuous and comprehensive care to his/her patients

• A physician led care team approach to treating the whole person with care coordination across all care settings.

• Facilitated by technology

• Emphasis on high quality, safe care

• Enhanced access through open access scheduling, expanded hours, and secure email

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Bundled Payments for Care Improvement (BPCI Initiative)

• Made up of 4 broad care models which links the separate payments for an episode of care into one lump payment to be shared among all providers caring for that patient.

• Financial and performance accountability is included in the initiative

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Comprehensive Care for Joint Replacement

• Next phase of bundled payments

• Start date April, 2016

• 800 facilities/providers in 75 markets

• 5 performance years for this model

• This is a retrospective, 2 sided risk model

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Comprehensive Primary Care Initiative

• Launched in 2012

• Collaborative effort of Medicare, Medicaid, and commercial plans to deliver coordinated care

• PCP’s acted as quarterbacks

• 2.7 million patients – 483 practices

• 24$ million in savings

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Specialty Care Models

• Comprehensive ESRD Care Model– 600,000 have ESRD or 1.1% of Medicare population

– 5.6% of Medicare spending

• Oncology Care Model– 1.6 million cases diagnosed each year

– Financial and performance accountability model

– Better coordinated care

• Million Hearts CVD Risk Reduction Model– Prevent a million heart attacks

– 720 practices are enrolled.

– Patients will be put in 2 groups ( Interventional and Control)

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Medicare Advantage Value Based Insurance Design Model

• To begin January 2017 – goes for 5 years

• Test modeled in 7 states (Arizona, Indiana, Iowa, Mass, Oregon, Pa, Tenn)

• Provide supplemental benefits tailor made to the enrollees clinical needs

– Diabetic eye exams – no copay

– Smoking cessation – no copay

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What’s Common In All These Models?

• Moving the risk

• Forced innovation

• Economize on care and regimen choice

Bundling 31

“The Straddle”

Unsustainability gap

Delivery Models

Reimbursement Models

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No Longer Business as Usual

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Walk-in Clinics

High deductible health plans

Transparency/ Price & performance

Telehealth

Virtual healthcare

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Medicare Access and CHIP Reauthorization Act (MACRA)

• Repealed the SGR (Sustainable Growth Rate)

• Further defined how PQRS, MU, VBPM and other programs would transition to a new reimbursement model

• 2 new models of care delivery

– MIPS

– APM’s

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Merit-Based Incentive Payment System Combines:

PQRS- Physician quality reporting system

VBPM- Value based payment modifier

EHR Meaningful Use

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MIPS Performance Measures

EHR Use

Quality

Clinical Improvement

Resource use

25%

30%15%

30%

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MIPS Performance Categories

Year Qualitymeasures

ResourceUse

Clinical ImprovementActivities

MU of EHRtechnology

MIPsAdjustmentfactor

2019 50% 10% 15% 25% +/-4%

2020 45% 15% 15% 25% +/-5%

2021 30% 30% 15% 25% +/-7%

2022+Beyond

30% 30% 15% 25% +/-9%

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MIPS

• Measure Development Plan• https://www.cms.gov/Medicare/Quality-Initiatives-Patient-

Assessment-Instruments/Value-Based-Programs/MACRA-

MIPS-and-APMs/MACRA-MIPS-and-APMs.html].

– Identifies gaps from previous reporting methods• Prioritize person and caregiver centered experience of care

• Patient reported outcomes

• Patient health outcomes

• Communication and care coordination

• Appropriate use of resources

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6 Quality Domains of MIPS

1. Clinical care

2. Safety

3. Care coordination

4. Patient and caregiver experience

5. Population health and prevention

6. Efficiency and cost reduction

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Alternative Payment Models(APM’s)

• APM entities include:

– ACO- Advance payment model

– ACO – Shared Savings model

– Patient Centered Medical Home

– Bundled Payment Models

Qualifying APM’s (QP) receive a lump sum incentive equal to 5% of the prior year’s estimated aggregate expenditure if criteria are met.

The incentive is available between 2019-2024

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Alternative Payment Models

Provisions Include• Increased transparency of

physician focused payment models

• Will need criteria and processes for submission and review

• Incentive payments for participants

• Encourage development and testing of new models

• Integrate Medicare Advantage• Fraud reporting

Incentive Payments

• PCMH, ACO’s, Bundled care

• Healthcare innovation awardees' excluded

• Requires use of:– Certified EHR technology

– Reported measures comparable to MIPS reporting

– Bear financial risk for losses in excess of nominal amount

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Alternative Payment Models

APM Participants Incentives

• 2019-2024

• Qualified providers under the APM track receive 5% annual lump sum bonus on their Medicare Physician Fee Schedule (MPFS) payments

Qualifying Participants

• Increased thresholds of percentage of revenue received

• 2019-2020- 25% Medicare Revenue

• 2021-2022- 50% Medicare OR 50% all payer revenue and 25% Medicare must be received through APM

• 2023 + - 75% Medicare OR 75% all payer + 25% Medicare Revenue

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Participation in Risk Based Models

• Evaluate strengths and weaknesses

• Have a deep understanding of your costs

• Identify long term priorities

• Understand the market

• Create a tolerance for change

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44Map adapted from the Sg2 report, The Race to Risk—Tracking Markets' Evolution Toward Value-Based Care

Preparing for the future

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“Achieving high value for patients must become the overarching goal of healthcare delivery, with value defined as the health outcomes achieved per dollar spent.”

Michael Portner, The New England Journal of Medicine 2011

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Preparing for the Future

1. Understand the true cost of care delivery

2. Engagement ( Provider & Patient) (Culture Shift)

3.Leverage technology

4.Bring clinical and claim data together for meaningful purpose

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Cost of Care

Fee for Service

Bend the Cost Curve48

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Cost Management

• Know the cost of care

• Identify patient population in need of intervention

• Assess financial limitations of the organization

• Where is the revenue coming from

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Provider Engagement

Dr. John Evans – Iowa Healthcare Collaborative

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Provider Engagement -Selling the Value Proposition-

• New Clinical leadership roles

• Become active business partners

• Referral patterns

• Narrow networks

• Marketing strategy

• Proactive partnerships

• Patient retention and leakage

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Provider Engagement-Become Clinically Mature-

• Monitor existing quality programs

• Standardize protocols and care pathways

• Use care coordinators when appropriate

• Mobile inter-operability ( Fit bit, personal health records)

• Evaluate care gaps – Whole patient focus

• Promote team based care

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Patient Engagement

• Increased access

• High quality- low cost

• Shared decision making

• Customer service and satisfaction

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What Patients Value

• Online reviews increased 68% between 2013 and 2014.

• Factors that mattered most to patients:– Quality of care

– Provider rating

– Patient experience

– Accurate diagnosis

– Wait times

– Doctor’s listening skills

Source: Practice Management Consultancy Software Advice. Debra Beaulieu-Volk :Physicians online reviews gain power 54

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Healthcare Consumerism

PATIENT RETENTION

Consumers expectations of good customer service

70% 38% 33%Providers Retail Airline,

Banking & Hotels

The Health Research Institute survey55

Customer Service

Changing a poor customer service image takes 10 years

on average

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Technology

• EHR benefits

• Efficiencies in automation

• Negotiating power

• Eliminate and automate

• Delegate to top of licensure

• Push for inter-operability

• Innovative technology options

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Technology-Data- The New Currency-

• Analysis of claims and clinical data

• Evidence based care of the future

• Use data to categorize health risks

• Maturation of data

• The future of relational data bases

• Barriers to use of advanced data

• Predictive modeling

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Technology-Issues Impacting Quality Data-

• Incomplete, ambiguous and/or clinically incongruent documentation

• Incorrect or incomplete coding

• Sequencing of codes

• Understanding the complexity of the patient (Severity of Illness-SOI or Risk of mortality- ROM)

• Potential compliance risk

• Multi-disciplinary training

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Practice Transformation

Yesterday’s Practice

• Patient’s chief complaint determines care

• Care is determined by today’s presenting problem and the time available

• Care varies by scheduled time and memory/skill of he doctor

• Patients responsible for coordinating their own care

• Clinicians know they deliver high quality care because they were well trained

• It is up to the patient to tell us what happened to them

Tomorrow’s Practice

• Systematically assess all patients’ health needs to plan care

• Care is determined by a proactive plan to meet patient needs

• Care is standardized according to evidence-based guidelines

• A prepared team of professionals coordinates a patient’s care

• Clinicians know they deliver high quality care because they measure it and make rapid changes to improve

• You can track tests, consults, and follow-up after the ED and hospital

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At the End of the DayValue Based Reimbursement

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Improved Financial Performance

Enhanced Patient Experience

Improved Outcomes

Organizational Structure –Physician Leaders and Change Agents

Clinical Integration

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