SNF Services and Payment: Preparation for Today, … Services and Payment: Preparation for Today, Tomorrow, and 2020 ... • Medical Mall Services of Mississippi ... Technology and

©2012 CliftonLarsonAllen LLP1 111

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SNF Services and Payment: Preparation for Today, Tomorrow, and 2020

63rd Annual AHCA/NCAL

October 9, 2012

Accountable Care and the Comprehensive Landscape

©2012 CliftonLarsonAllen LLP2

The Future Under Health Care Reform

How We Pay for Care– Bundled payments

– Payment reductions

– Shared Savings

– Value-based payment

– Independent Payment Advisory Board

How Care is Organized – Accountable care organizations

– Medical homes

– Episodes of care

– Health information exchange

How Care is Delivered– Center for Medicare and

Medicaid Innovation

– Comparative effectiveness (evidence-based best practices)

– Multidisciplinary care teams across sites of service

– Electronic Health Records

– Care Transitions

– Improved coordination of care for dual eligibles

Health care reform is designed to significantly alter:

2


Accountable Care Organizations

General Definition

A group of health care providers working together to manage and coordinate care for a defined population, that share in the risk and reward relative to the total cost of care and patient outcomes.

Medicare ACO Programs

• Medicare Shared Savings Program

• Pioneer ACOs

• Advanced Payment Initiative


Medicare ACO Programs

Medicare Shared Savings Program (MSSP) = 115 ACOs

• Established January 1, 2012

• Program requires the participating providers to form an ACO

• 5,000 Medicare beneficiary minimum for participation

• Two tracks: Savings only, Savings/Losses• Two 2012 start dates: 4/1/2012 & 7/1/2012

Pioneer ACO Program = 31 Pioneer

• For organizations with prior ACO-like experience

• Must enter into outcomes-based contracts with multiple payers.

• 15,000 Medicare beneficiaries minimum

• Model transitions to greater financial accountability(risk) faster. • January 1, 2012 start

4


Advanced Payment Initiative

• To be eligible, applicants for this initiative must apply for MSSP for an April or July 2012 start AND: – Not include any inpatient

facilities AND have less than $50 million in total annual revenue. OR

– Include only inpatient facilities that are critical access hospitals and/or Medicare low-volume rural hospitals AND have less than $80 million in total annual revenue.

• Application deadlines

– For April 1, 2012 start date• Applications accepted

between January 3 and February 1, 2012

– For July 1, 2012 start date• Applications accepted

between March 1 and March 30, 2012 (consistent with Shared Savings Program)


ACOs: Advanced Payment Model

Started April 1, 2012:

• Coastal Carolina Quality Care, Inc(New Bern, NC)

• Jackson Purchase Medical Associates, PSC (Paducah, KY)

• North Country ACO (Littleton, NH)

• Primary Partners, LLC (Clermont, FL) RGV ACO Health Providers, LLC(Donna, TX)

Started July 1, 2012:• Accountable Care Partners ACO, LLC (FL, GA)

• Coastal Medical, Inc. (MA, RI)

• Cumberland Center for Healthcare Innovation, LLC (TN)

• Golden Life Healthcare LLC (CA)

• Harbor Medical Associates PC (MA)

• Maryland Accountable Care Organization of Eastern Shore, LLC (MD)

• Maryland Accountable Care Organization of Western Maryland (MD, PA, WV)

• Medical Mall Services of Mississippi (MS)

• MPS ACO Physicians, LLC (CT)

• Physicians ACO, LLC (TX)

• PriMed, LLC (CT)

• Quality Independent Physicians, LLC (IN, KY)

• Reliance Healthcare Management Solutions(FL)

• St. Thomas Medical Group, PLLC (TN)

• Texoma ACO, LLC (TX)


Medicare ACO Requirements

Requirements:• Accountable for quality, cost and care

• Legal structure to receive/distribute incentives

• Sufficiency of PCPs to accept a minimum of 5,000

• Promote evidence-based medicine & patient engagement

• Patient-centered care processes

• Leadership and management structure

• Report on quality measures and other performance data

• Three-year agreement

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Final Medicare ACO Rules:

Beneficiary Assignment

Methodology• Identify all primary care services

provided by physicians within most recent 12 months

– FQHCs/RHCs primary care services included if meet certain criteria

• Beneficiary assigned to the ACO whose PCP provided the greatest portion of primary care services

• For unassigned beneficiaries, they will look at primary care services received by other non-primary care physicians and/or other ACO professionals such as nurse practitioners.

Beneficiary assignment is:• Prospective at the beginning of

each performance year

• Updated quarterly based upon most recent 12 months of data

• Reconciled at the end of the performance year


One-sided Model Two-sided Model

Maximum Sharing Rate 50% 60%

Minimum Savings Rate (MSR)

2.0-3.9% 2.0%

Shared Savings • Share in first dollar savings after MSR met

• Share in first dollar savings after MSR met

Shared Savings Cap 10% 15%

Shared Losses Not applicable After 2% Minimum Loss RateShared Losses = 1- Quality RateYear 1: 5%Year 2: 7.5%Year 3: 10%

Final Medicare ACO Rules:

Comparing the Two MSSP Payment Models


Pioneer ACO Payment ModelsCore Option A Option B Alternative 1 Alternative 2

Year 1

60% - two-sided

10% sharing cap

10% loss cap,

1% MSR

50% - two-sided

5% sharing cap

5% loss cap,

1% MSR

70% - two-sided

15% sharing cap

15% loss cap,

1% MSR

50% - one-sided

5% sharing cap

2-2.7% MSR

(depends upon #

of beneficiaries)

60% - two-sided

10% sharing cap

10% loss cap,

1% MSR

Year 2

70% - two-sided

15% sharing cap

15% loss cap,

1% MSR

60% - two-sided

10% sharing cap

10% loss cap,

1% MSR

75% - two-sided

15% sharing cap

15% loss cap,

1% MSR

70% - two-sided

15% sharing cap

15% loss cap,

1% MSR

70% - two-sided

15% sharing cap

15% loss cap,

1% MSR

Year 3

Population-based

pymt of up to 50%

of expected Part A

& B revenue

Risk: 70% - two-

sided

15% sharing cap

15% loss cap,

1% MSR

Population-based pymt

of up to 50% of

expected Part A & B

revenue

Risk: 70% - two-sided

15% sharing cap

15% loss cap,

1% MSR

Population-based

pymt of up to 50%

of expected Part A

& B revenue

Risk: 75% - two-

sided

15% sharing cap

15% loss cap,

1% MSR

Population-based

pymt of up to

100% of expected

Part B revenue,

less 3% discount

Risk: Full risk for

all Part B w/3-6%

discount

(depending upon

quality scores) and

shared risk for Part

A (same as Yr 2)

Population-based

pymt of up to

100% of expected

Part A& B

revenue, less 3%

discount

Risk: Full risk for

all Part A & B w/3-

6% discount

(depending upon

quality scores)

Year 4

Same as above.

Rebase using 2011,

2012, 2013 data

Same as above.

Rebase using 2011,

2012, 2013 data

Same as above.

Rebase using

2011, 2012, 2013

data

Same as above.

Rebase using

2011, 2012, 2013

data

Same as above.

Rebase using

2011, 2012, 2013

data

Year 5 Same as above. Same as above. Same as above. Same as above. Same as above.


Final Medicare ACO Rules Determining Shared Savings

Shared Savings Formula

BYr. 1

Historical

ACOSpecific

Benchmark

ACOSpecific

Benchmark

ACOSpecific

Benchmark

Y 1 Y 2 Y 3

Benchmark: Three-year risk & growth trend adjusted per beneficiary spending rate. Projected and updated based on National FFS spending rate.

Minimum Savings Rate(MSR): One-sided model = 2.0 to 3.9 %,based upon # of assigned Medicare beneficiaries. Max savings = 10% of benchmark. Two-sided model = 2%. Max savings : 15% of benchmark.

BYr. 2

BYr 3

10%

30%

60% Most recent3 years actual spending rate, weighted by

year.


2012 Medicare ACOs

Brown & TolandPhysiciansHealthcare Partners Medical GroupHeritage California ACOMonarch Healthcare

Primecare Medical NetworkSharp Healthcare System

Healthcare Partners of

Nevada

North Texas ACO

Seton Health Alliance

Allina Hospitals & ClinicsFairview Health SystemsPark Nicollet Health Services

Bellin-ThedacareHealthcare PartnersAllina Hospitals & Clinics

Genesys PHOMichigan PioneerUniversity of MI

Presbyterian Healthcare

Services

OSF Healthcare System

Franciscan AllianceTriHealth, Inc.

Atrius Health

Beth Israel Deaconess

Physician Org

Mt. Auburn Cambridge

IPA

Partners Healthcare.

Steward Health Care

Systems

Eastern Maine Healthcare System

Dartmouth-Hitchcock ACO

RenaissanceMedical Mgmt Co.

JSA Medical Group, a division of HealthCare Partners

BronxAccountableHealthcare Network

= Pioneer & MSSP ACOs

= Pioneer ACOs only

= MSSP ACOs onlyAs of July 2012


Proposed Medicare ACO Rules

The ACO Paradigm

Patient Centered


Medicare Accountable Care Organizations

Providers eligible to form an ACO:– ACO professionals in group practice

– Networks of individual practices of ACO professionals;

– Partnerships and joint ventures between hospitals and ACO Professionals;

– Hospitals employing ACO professionals

– Critical Access Hospitals under Method II

– Federally Qualified Health Centers

– Rural Health Centers

•Cannot include providers participating in other shared savings programs or demos or the Independence at Home pilot.

ACO professionals :

• Physicians

• Nurse Practitioners

• Physician Assistants

• Clinical Nurse Specialists

Other eligible ACO participants

• Skilled Nursing Facilities

• Home Health Care

• Hospice

• Comprehensive outpatient rehabilitation facility


ACO Network

ACO Providers:Bonus-Eligible

Non-ACO Preferred Providers

Non- Preferred Providers

ACO Network: “A Team of Rivals”

•Primary Care Practitioners

•Hospitals

• “Value” Providers • Low Quality, High Cost Providers


ACO Configurations Will Vary: PCP Model

Contracted Services

Primary Care Group Practice

OrIndependent Practice

Association

•Hospitals

•Specialists

•Post-acute

ACO


ACO Configurations Will Vary: Multi-Specialty

Contracted Services

Multi-Specialty Group PracticeOr

Independent Practice Association

•Hospitals

•Post-acute

ACO


ACO Configurations Will Vary: Integrated Acute

Contracted Services

Integrated Acute Care Delivery Systems

•Post-acute

ACO


ACO Configurations Will Vary: Continuum

The Integrated Continuum

ACO

• PCPs

•Hospitals

• Specialists

• Post Acute


ACO Configurations will vary: Others?

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Contracted/Preferred Provider Services

Chronic Care Management Alliance

• Specialists

• Hospitals

ACO

Value provider on orthopedic

Value provider on Cardiac Care

Specialists


• Beneficiary Choice maintained

– Choice of Providers in/out of ACO

– Can opt out

– ACO prohibited from offering beneficiaries inducements for certain behavior.

• Contract Terms– ACO can add or remove participants or providers throughout the

contract. Requires a 30-day notice to CMS.

– CMS can terminate an ACO contract when a “significant change” occurs –ACO is no longer able to meet the eligibility or program requirements.

Key Aspects of Final Medicare ACO Rules


• Must establish processes as part of a quality assurance and improvement program that:– Promote evidence-based medicine

– Promote patient/beneficiary engagement

◊ Patient experience of care survey

◊ Mechanism for evaluating health needs of ACO population

• Identifying community stakeholder partnerships to improve health

◊ Communicate clinical information and evidence-based medicine to beneficiaries

◊ Patient engagement and shared decision making

◊ Patient medical record access

– Internally report on quality and cost metrics

– Coordinate care among all providers ◊ Individualized care plans, care transition processes, etc.

Final Medicare ACO Rules’ Eligibility Requirements

Required Processes


Proposed Medicare ACO Rules Determining Shared Savings

Shared Savings Formula

Final Shared Savings=

ACO achieved savings

x ((Maximum Shared Savings %) x (Quality Score %))

Example:

ACO savings $800,000

Maximum under Model I x 50% ACO-specific Quality Score x 87%

= $348,000

Notes•CMS withholds 25% of earned Shared Savings until end of agreement to offset potential losses.

•Failure to complete full three years = withhold forfeited

•Must be 90% or above on all quality metrics in order to achieve maximum savings rate.


What needed to be successful ACO…

• According to Center for Health Care Quality and Payment Reform

1. Complete and timely information

2. Technology and skills for population management and care coordination

3. Adequate resources for patient education and self-management support

4. Culture of teamwork

5. Coordinated relationships

6. Ability to measure and report on quality

7. Infrastructure and skills to manage financial risk

8. Commitment to “value” by organizational leadership

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Source: “How to Create Accountable Care Organizations, “ Center for Healthcare Quality and Payment Reform, 2009.


So What Does All of This Mean?

While none of us has a perfect crystal ball, here are some of the expectations for the next few years:

1. We expect a decline in hospitalizations by up to 30% over the next ten years.

2. More care will likely move to home care & SNF; it is likely that remaining post-acute volume willbe spread across fewer providers.

3. At present, MSSP ACOs will not have the authority to waive restrictive payment rules; Pioneer ACOs, however, have been afforded some greater flexibility

4. Bundled payments will change models of care, reduce length of stay, increase integration before & after services & change relationships w/ physicians

5. Volume of “care” provided in typically “residential” settings (like AL or even IL) will likely increase.


What are the ACOs Doing?

• Many of the ACOs are focused right now in two major tasks:

1. Attribution – sorting out which Medicare beneficiaries may be “IN” or “OUT’ of the ACO.

2. Physician Participation – figuring out which primary care physicians are going to participate.

Secondarily

Some are still sorting out IT/EMR issues, quality management, communication and so on.

Post-acute care, while recognizably important, is not far up on the priority list for many.


Why Isn’t Post-Acute a Burning Issue?

Here’s Why:

SNF care, or home health, accounts for very small fraction of the total healthcare dollar in any given market.

They’ll get to us.

Will you be ready?


What We Think We Know….

1. The move to TCOC/ACO/Bundled Payment has created new models of care and experimentation

2. Care delivery changes have moved faster than payments.

3. Clinical quality improvements are expected to reduce acute care use by about 20% over the next five to eight years.

• Implications:

Care is moving to a lower cost settings that are patient-centered

Clients served in the community are likely to be sicker and frailer and will be served for longer periods or more episodes

Care delivery model changes have not seen reimbursement follow

Value-based payments will grow

Patients and their families are struggling

Community-based care models must also change to include effective technology, caregiver supports, specialty programming, frequency of interventions, greater integration, improved hand-offs, etc.


Reducing Potentially Preventable Admissions

May 8th the 2011 4th Q data was released showing a reduction of 1,915 potentially preventable readmissions or about a 9+% reduction in year 1.

Collaborations appear to be improving performance outcomes at a faster rate.


Health Provider Strategies

• Hospital/Physician Integration

• Collaborations w/ new partners – payers, vendors, etc.

• New Health Venture Capital Firms with non-traditional investors

• Joint venture between University of Pittsburgh Medical Center's health plan and the Advisory Board to provide ACO technology and outsourcing services.

• Post-acute providers creating a seamless care continuum –Kindred, Genesis, LifeCare, Select, etc. Developing exclusive contracts to serve as PAC providers in selected markets.

• Implementation of Lean, Six Sigma and other cost efficiencies

• Advocate Health System in Chicago offers training for care integration and total cost of care management

• 980 Health Care Mergers in 2011 valued at $227B Source: ACO service industry blooms - Healthcare business news and research | Modern Healthcarehttp://www.modernhealthcare.com/article/20111114/MAGAZINE/311149948#ixzz1k9bSVgZk?trk=tynt

http://www.modernhealthcare.com/article/20111114/MAGAZINE/311149948






Changing Health Care Use – One Example

45,000

47,000

49,000

51,000

53,000

55,000

57,000

59,000

Wisconsin Medicare Hospital Admission Rates

Wisconsin is one state that has made significant progress on reducing both admissions and readmissions to acute care.

There are currently discussions about how low admission and readmissions can be without impacting quality of care.


What Can We Expect?

We believe seven emerging themes will prevail:

1. Providers will be asked to accept greater financial risk for outcomes

2. Operational efficiency will be critical

3. Collaboration among all providers will be required for survival

4. Significant investments in technology will be necessary

5. Increased quality expectations, reporting and monitoring

6. Elevated regulatory risk

7. Increased focus on community-based services and carewill result


“Strawman” Strategic Priorities for Health Care Providers

1. In each market in which you operate, position your organization to be #1 or 2 for key referral sources and collaborative partners

2. Develop / coordinate / collaborate to create a full continuum of capabilities in each market

3. Continue to investing technology and update physical plants to meet contemporary requirements

4. Improve operating performance and build balance sheet

Overall focus: assemble basic performance data – tighten pre- and post-acute network – focus on developing relationships with Providers that will ultimately control or influence flow of funds

33


Possible Future Visions

- Expand into Independent and Assisted Living

- Private Duty Services

- Focus is Age 75+ Market

(Otherwise known as Retirement Living)

- Continued emphasis on “rehab” as core business driver

- Cultivate rehab “excellence”

- Focus is Age 65+ Market

(Otherwise known as Sub-Acute Care)

- Multi-service continuum for complex care

- Service offered in multiple settings

- Potentially Age 55+ Market

(Otherwise known as Chronic Disease Management)

Community

Focus

Rehab

Focus

Clinically

Complex

Focus


Contact Us

John Richter

Managing Partner, Health Care

CliftonLarsonAllen

[email protected]

mailto:[email protected]

Documents

SNF Services and Payment: Preparation for Today, … Services and Payment: Preparation for Today, Tomorrow, and 2020 ... • Medical Mall Services of Mississippi ... Technology and