National Reimbursement Trends
Mike Cheek
Narda Ipakchi
James Michel
National Medicare Trends: Focus on Fee-
for-Service Mike Cheek
Senior Vice President
Reimbursement Policy & Legal Affairs
Member Sharing Questions
In general, what should AHCA/NCAL know about member operating experiences in WI?
What would you like AHCA/NCAL staff to understand about the following:
• Medicare Fee-for-Service
• Medicare Advantage
• Accountable Care Organizations
• Comprehensive Joint Replacement demo
What lessons learned from the WI operating environment might be helpful to other state affiliates and members?
What are your greatest concerns for 2017 and going forward?
Key Learning Objectives
Medicare increasingly is becoming regional and local both in delivery and payment
Quality measurement now is an integral part of reimbursement policy – rates, alone, are a thing of the past
Opportunities exist but innovative thinking is needed
Overview of Medicare in CMSOffice of the
Administrator
CM
Chronic Care Policy
Hospital & Ambulatory
CCSQ
Survey & Certification
Quality Improvement
Coverage & Analysis
CMMI
Patient Care Models
Medicare Demonstration
CPI
Provider Enrollment
Investigations & Audits
OFM
Payment
Quality
Pilots & Demos
Audits
Reimbursement Policy is Yesterday –Measurement Now Equals Payment
Center for Medicare
Office of the Actuary
Center for Clinical Standards and
Quality
Center for Medicare and Medicaid
Innovation
Office of Management and
Budget
Medicare Advantage
Business Unit
Market basket Wage Index
Rehospitalizationand IMPACT Act
Alternative Payment Methods/Delivery Models
Secretary Burwell’s Mandate has been Achieved and More to Come
“We believe these goals can drive transformative change, help us manage and track progress, and create accountability for measurable improvement.”
Secretary Burwell, January 2015
Alternative Payment Models Done -- 30 percent of traditional, or fee-for-service, Medicare
payments to quality or value through alternative payment models by the end of 2016
• On track – 50 percent of payments to these models by the end of 2018
Value-Based Purchasing Done – 85 percent of all traditional Medicare payments to quality or
value by 2016• 90 percent by 2018
Medicare FFS Payment Initiatives Key SNF Impacts
SNF PPS Rates – CMS has work underway to change how SNFs are paid under SNF PPS
SNF Volume & Referral Sources – Hospital and Physician Payment Systems are changing• Hospital and physicians will have powerful incentives to
minimize costs downstream• In future, CMS will share spending post scope of practice
which will influence hospital referral patterns and physician orders
CMS SNF Prospective Payment System Redesign
CMS has New Data Resources and Federal Partnerships
Percent of RU Assessments Between 720-730 Minutes, by State, 2013
WI in 40-50% Range
SNF Public Use File and Elder Justice Task Force
Use state and facility data to assess at risk providers • Medicare Provider Aggregate Table, CY 2013, Microsoft Excel (.xlsx)
• Medicare Provider by RUG Aggregate Table, CY 2013, Microsoft Excel (.xlsx)
• Medicare RUG Aggregate Table, CY 2013, Microsoft Excel (.xlsx)
• Medicare RUG by State Aggregate Table, CY 2013, Microsoft Excel (.xlsx)
• Medicare Therapy Minutes Aggregate Table, CY 2013, Microsoft Excel (.xlsx)
Understand the scope and status of the Elder Justice Task Force operating in the DOJ Northern District of Iowa
• Iowa District operational
CMS Research Approaching Conclusion
Ongoing CMS data analysis Technical Expert Panels (TEPs)
TEP Timeframe Status
Therapy February 2015 Summary Report
Nursing/NTAS December 2015 Follow Up Call – No Date
SNF PPS Redesign TEP I June 2016 Comments Due to CMS 8/15
SNF PPS Redesign TEP II Fall 2016 To Be Scheduled
Efforts to Influence PPS Changes
Therapy • Extensive phase two therapy
component research
Nursing Component/NTAS• Eight member companies
participating in NTAS research
Viability of PPS-Based Data • AHCA research on PPS data
demonstrated poor resource for policy changes
Preparing for Redesign
Request to Board for
$150,000 from reserves in order to respond by August 15 to CMS Redesign concept
More may be needed in response to Fall 2016 TEP
CMS Focus is on Readily Available Changes
Redesign concept based in part upon previous two TEPs
Concept within bounds of statutory language therefore no legislation needed
Based upon current administrative data
Based Upon Five Components
Physical Therapy/Occupational Therapy (PT/OT)
Speech-Language Pathology (SLP)
Non-Therapy Ancillary Services (NTA)
Nursing
Non-Case Mix
Component values determined independently
Significant Shift Away from Existing PPS
RUGs and minutes replaced by mutually-exclusive resident groups based upon resident characteristics and additional adjustments
While technically defined as a per diem, daily payments based upon a percentage of stay of care costs within each resident group
Daily payment likely would decline over course of stay
Payment Model Example (Confidential)
Data Sources Problematic
For PT/OT, SLP and NTA using claims and cost-to-charge ratios
Resident characteristics and related resident groups used for case mix are based on hospital MS-DRGs
Nursing would rely upon 2006-2008 STRIVE data and linkage of claims to cost-to-charge ratios• Uncertain how observed decline in admission function since
STRIVE would be statistically accounted for
Proposed Plan for Response to CMS Redesign Concept
CMS Response• Approach same as SNF PPS Notice of Proposed Rulemaking
• Form Ad Hoc member work group – Reimbursement Cabinet, Data Analytics Subcommittee, Volunteers from Clinical Committee
• Support and data Analysis from Moran and University of Chicago
• Coalition of SNF stakeholders working together on a coalition letter
Possible Congressional Effort
Possible Demo Concept • Legislative
• Comments to CMS
Hospital and Physician Payment Trends & Changing Referral Patterns
What Are CMS’s Priorities?
Priorities
• Implementing MACRA and MIPS
• Working toward helping physicians get ready for alternative payment models
• Requirements for Participation for nursing homes
• IMPACT Act
Measures
• “People talk about there's too many measures, we need to get rid of measures, and that's true. I really view it as being about having the right types of measures.” – Kate Goodrich, M.D., Director CCSQ
CMS is Increasing Accountability with Medicare Spending Per Beneficiary (MSPB) Measures
Inpatient stay(variable based on LOS)
30-days post-inpatient stay
3 days pre-inpatient stay
Measure Timeline
CMS Moving Towards Episode-based Efficiency Measures
Measures Addressing Medical Episodes
1. Gastrointestinal Hemorrhage
2. Kidney/Urinary Tract Infection
3. Cellulitis
Measures Addressing Surgical Episodes
4. Hip Replacement/Revision
5. Knee Replacement/Revision
Hospital MSPB Allows Could Reduce SNF Utilization
Medicare Spending Per Beneficiary (MSPB)
• Assesses Medicare Part A and Part B payments
• Price-standardized to remove the effect of geographic payment differences and add-on payments
• Risk adjusted to account for beneficiary age and severity of illness
• Reported on Hospital Compare with state and national comparisons
• FY 2016 part of VBP; counts for ¼ of total score
Hospital Responses: Target SNF Spending and Volume
• Cleveland Clinic: focus on post-acute care providers/suppliers (30% of cost)
• Partners Healthcare (Boston): SNF highest post-acute cost variation
Docs Will Also Be Incentivized to Reduce PAC
Sunsets Value-based Modifier (Pay for Reporting) at end of 2018
• Initial bonus system shifted to penalty for not reporting
• Attribution rests heavily on primary care
• Physicians receive all A&B costs per attributed patient – includes SNF costs
Establishes MIPS for January 1, 2019 and beyond
• Establishes episodes of care
• Includes resource use measures (30%+), quality (30%), others
• Risk for penalties starts at 4% in 2019 and rises to 9% in mid2020s
• Rulemaking still underway
Creates bonus payment for participating in APMs
• 5% bonus on all professional fees
• Thresholds start at 25% and escalate rapidly to 75%
• If met, exempt from MIPS and its penalties
• Forces alignment with hospital incentives by mid-2020 or sooner
Implications for PACCMS driving change in PAC utilization through APM and VBP measures for hospitals and physicians
• Quality policymakers driving payment changes through penalty system
• PAC spending variation increases pressure on other providers because PAC spend counts against their efficient measures
CMS also driving change through alignment of SNF measures and models with those of other providers
• IMPACT Act SNF MSPB reporting measure could move to VBP
• Becoming more difficult to justify PAC-specific models and measures given CMS focus on uniformity and standardization
Congress supportive of this approach as well
• W&M draft VBP legislation for PAC is example of pressure to accelerate such trends
Key Takeaways
SNFs will need to be responsive to specific hospital and physician market needs and financial risk
Aggressive Passive
• SNFs must address quality, LOS• Identify opportunities for pro-active
engagement• Push toward clinical partnership
• Proactive identification of opportunities
• Identify barriers to hospital success and market-specific interventions
• Evaluate and proactively engage hospitals and physician groups on what they need to succeed
Medicare Advantage:Current Landscape and
Future Outlook
Narda Ipakchi, MBA
Senior Director
Managed Markets
27
Discussion Goals
Review Medicare Advantage (MA) plan structure and design
Understand current/future MA plan market pressures and priorities and potential impacts on providers
Identify opportunities to collaborate with plans or other stakeholders to enhance position in MA environment
Medicare Advantage (MA): Basic Structure
Medicare Advantage Organization (MAO)
Part A
Care Coordination
CMS
Part B
Beneficiary
Administrative Services
Part D
PMPM $$
Negotiated Rate $$
Enrollment in MA Growing at Steady Pace
Source: Kaiser Family Foundation analysis of CMS Enrollment Files
MA
En
rollm
ent(
mill
ion
s)
Nearly One-Third of Medicare Beneficiaries Enrolled in MA
MA Penetration by State, 2016
Source: Kaiser Family Foundation analysis of CMS Enrollment Files
Two Plan Sponsors Comprise Nearly 40 Percent of MA Enrollment
Source: Kaiser Family Foundation analysis of CMS Enrollment Files
MA Penetration Rate (2016)
Wisconsin MA Landscape: 2016
Source: AHCA analysis of CMS Enrollment and Landscape Files
United, 27%
Humana, 18%
Network Health, 15%
Security Health,
11%
Sierra Health, 7%
Dean Health, 6%
Medica, 6% Other, 10%
MA Market Share by Plan, 2016
Operationalizing Medicare Advantage: Provider Challenges
MA plans typically reduce provider reimbursement rates and/or authorized SNF lengths of stay to achieve savings
Diversity of quality and performance measures across plans places a heavy reporting burden on providers
MA plans are under pressure to reduce utilization/costs and improve outcomes
Cost reduction/containment
Improved quality and outcomes (e.g., MA Five Star)
Ability to communicate and collaborate effectively with plan and other providers
Providers must demonstrate their ability to deliver these capabilities through open dialogue, robust quality and outcomes data, and relationships with other providers
Providers Must Demonstrate Value to MA Plans
Changes to MA Plan Payment
36
MA Plan’s Adjusted Bid Rate
MA Plan’s Adjusted Bid
Rate
MA Plan’s Reimbursement
for Enrollee
Individual Enrollee’sRisk Adjustment
Factor (CMS-HCC)
MA Plan’s Reimbursement
for Enrollee
MA Plan’s Reimbursement for
Enrollee
Based on enrollee characteristics: • Diagnoses • Sex • Working aged status • Age • Medicaid status• Disabled status
Based on costs/estimates for treating “average” FFS beneficiary• Part A/B covered
services only (excludes hospice)
• Includes administration/profit
Medicare Advantage Plan Premiums
Hierarchical Condition Categories (HCCs) Explained
CMS risk adjusts payments to account for differences in expected costs• Seeks to reduce “cherry-picking”
Impact of an enrollee’s risk factor is not immediate (plans receive increased premiums in the following year)
CMS requires plans to submit risk adjusted conditions each year (even chronic conditions)• Failure to properly document services and need for additional
services results in the plan and the provider obtaining less than they are owed
Several HCCs
82 year-old male 0.597
Medicaid Eligible 0.166
Diabetes w/ Renal Disease (HCC 15)
0.508
Rheumatoid Arthritis (HCC 38)
0.346
Renal Failure (HCC 131) 0.368
Hemiplegia (HCC 100) 0.437
Disease Interaction 0.102
Risk Adjustment Factor 2.524
Monthly Premium $2,282
Annual Premium $27,382
Some HCCs
82 year-old male 0.597
Medicaid Eligible 0.166
Diabetes (HCC 19) 0.162
Rheumatoid Arthritis 0.346
Renal Failure - Not Coded N/A
Hemiplegia - Not Coded N/A
No Disease Interaction N/A
Risk Adjustment Factor 1.271
Monthly Premium $1,149
Annual Premium $13,789
No HCCs
82 year-old male 0.597
Medicaid Eligible 0.166
Diabetes - Not Coded N/A
Rheumatoid Arthritis - Not Coded
N/A
Renal Failure - Not Coded N/A
Hemiplegia - Not Coded N/A
No Disease Interaction N/A
Risk Adjustment Factor 0.763
Monthly Premium $690
Annual Premium $8,278
Risk Adjustment Factor Example
Source: American Health Lawyers Association: Risk Adjustment: Key Standards, Developments, and Risks in Medicare Advantage and Beyond
Incentives to Identify Diagnoses Increases Risk Scores
MA risk scores were
approximately 9 percent
higher than Medicare FFS
in 2013
Kronick R. and W. Pete Welch. Measuring Coding Intensity in the Medicare Advantage Program.
Medicare & Medicaid Research Review 2014: Volume 4, Number 2
Efforts Underway to Reduce MA Coding Pattern Differences
Annual Coding Intensity
Adjustment
Increased Scrutiny of In-Home Health Risk Assessments
(HRAs)
Risk Adjustment Data Validation
Audits
RADV: Risk Adjustment Data Validation
Annual audits conducted by CMS to verify plan’s risk adjustment payments
CMS currently conducts annual RADV audits on targeted plans and randomly-selected plans
Selected plans must provide required from documentation hospital inpatient/outpatient and physician medical records
According to CMS, errors/omissions in diagnosis data drivers of the 9.5% of the improper payment rate for MA
CMS Plans to Extend RADV Audits
Currently, CMS audits 30 MA contracts (approximately 5%) per payment year
CMS plans to expand audits through contracts with Recovery Audit Contractors (RACs)
RACs would be tasked with conducting risk RADV reviews to:• Identify overpayments and underpayments
• Recoup overpayments
Ultimate goal is to have all MA contracts subject to a RADV audit for each payment year
Administrative Burden
• Pressure on plans to obtain additional documentation
• Increased volume of plan requests for documentation from providers
• However, only documentation from physician offices, hospital inpatient/ outpatient settings is eligible for RADV Audits
• SNFs are explicitly excluded from acceptable provider types
Provider Reimbursement
• Recoupment of overpayments will reduce overall plan payments
• Plan response may impact provider reimbursement and volume
• Rate cuts/freezes
• Reduced LOS
• Narrower networks
Implications for Providers
MA VBID Program
45
Snapshot of the MA Value-Based Insurance Design Model January 1, 2017 launch date and five-year model test period
Tested in: Arizona, Indiana, Iowa, Massachusetts, Pennsylvania, Tennessee, and Oregon
Plan flexibility to design VBID benefit packages for targeted enrollee populations
VBID benefits must be reduced cost-sharing or extra benefits only• No reductions in targeted enrollee benefits or increases in
targeted cost-sharing amounts
Plans Must Meet Eligibility Criteria to Participate MA and MA-PD Plan Benefit Packages offered in
participating states
HMO, HMO-POS & Local PPO plans only• Special Needs Plans are not eligible
Plan has at least 3 Star overall quality rating for CY2015
3 years of operation prior to CY2017
Minimum of 2,000 enrollees in test state
Plan is offered in no more than two states, and 50% of plan’s enrollment resides in test states
Plans Can Select One or More Interventions
Health Conditions
• Diabetes
• Chronic Obstructive Pulmonary Disease (COPD)
• Congestive Heart Failure (CHF)
• Patient with Past Stroke
• Hypertension
• Coronary Artery Disease
• Mood disorders
Interventions
• Reduced Cost Sharing for High-Value Services, Supplies, Drugs
• Reduced Cost Sharing for High-Value Providers
• Reduced Cost Sharing for DiseaseManagement Participation
• Coverage of Extra SupplementalNon-Covered High-Value Benefits
Dual-eligibles are included in demonstration population
Plans are prohibited from communicating participation inpre-enrollment marketing materials/interactions unless explicitly asked
Eligible Populations:
Beneficiary Education and
Communication:
Identification of High-Value
Providers/Services:
CMS has not identified a methodology for plan selection of high-value services and providers
Beneficiary and Provider Considerations
Dual-Eligibles and MA
50
What Are D-SNPs?
Dual-eligible Special Needs Plans (D-SNPs) are a type of MA plan in which enrollment is limited to dual-eligibles only• Grants plans flexibility to provide a model of care that focuses
dual-eligible population needs
Enrollment has grown steadily since 2006 and now exceeds 1.7 million
D-SNPs must have a contract with state Medicaid agency to “provide Medicaid benefits, or arrange for benefits to be provided”
51
CMS Is Increasingly Looking to D-SNPs for Dual-Eligibles
States participating in Financial Alignment Initiative (“Duals Demos”) express widespread challenges
CMS indicates D-SNPs may provide states with an opportunity to better coordinate Medicare and Medicaid services for dual-eligibles• 2017 MA Call Letter
• Medicaid Managed Care Final Rule
How Do D-SNPs Work with States?
MA-Only D-SNP
Contract w/State None Required
Medicaid Benefit
CoverageNone
Contract must include information on plan responsibility to provide/arrange Medicaid
benefits, (e.g. cost-sharing only vs. comprehensive coverage of LTSS)
Medicare/Medicaid
AlignmentNone
Contract must specify how the Medicare and Medicaid benefits are integrated and/or
coordinated (e.g., enrollment, appeals, etc.)
Beneficiaries may enroll in aligned D- SNPs and MMC plans operated by same plan
sponsor
Source: Integrated Care Resource Center. Working with Medicare: Update on State Contracting with D-SNPs. November 2015.
Considerations for Providers
CMS encouragement of D-SNP as vehicle for care delivery may result in increase in MA enrollment
Discussions with state can help inform state/plan contract terms (e.g., unique needs for LTSS)
Providers may need to develop relationships with D-SNPs, even if not contracted for Medicaid benefits
Plans that offer both D-SNP and Medicaid managed care plan may use similar network across offerings
James Michel
Senior Director, Medicare Reimbursement & Policy
AHCA
National Trends in Medicare Alternative
Payment Models
Discussion Review of CMS priorities and goals related to shifting
Medicare spending from FFS to value-based models
Compare and contrast alternative payment models• ACO programs
o Medicare Shared Savings Program (MSSP) ACOs
o Pioneer ACOs
o Next Generation ACOs
• Bundling programso Bundled Payments for Care Improvement (BPCI) Initiative
o Comprehensive Care for Joint Replacement (CJR) Model
Q&A
CMS Targets to Shift Payments
85% 90%
50%30%
AlternativePaymentModels
AlternativePaymentModels
FFS Linkedto Quality
FFS Linkedto Quality
All Medicare FFS All Medicare FFS
2016 Goals 2018 Goals
CMS Hits First Goal Early
85%
30%
AlternativePaymentModels
FFS Linkedto Quality
All Medicare FFS
2016 Goals
?
CMS announced that as of January 1, 2016, the Office of the Actuary estimates that more than 30% of Medicare FFS payments are linked to an alternative payment model
APMs include:
• MSSP ACO
• Pioneer ACO
• Next Generation ACO
• BPCI
• Comprehensive Primary Care Model
• Medicare Advanced Primary Care Program
• Comprehensive ESRD Care Model and ESRD PPS
• Maryland All-Payer Model
• Medicare Care Choices Model
Alternative Payment Models
Groups of providers who voluntarily agree to be held finically accountable for the total Medicare spending on a defined population of patients for one year
Groups of providers who voluntarily agree to be held financially accountable for the total Medicare spending on a single patient over a single episode of care
Accountable Care Organizations
BundledPayments
Alternative Payment Models -Financial
Shared savings approach where any savings or losses are split with CMS
Savings/loss potential capped at some percentage of spending
ACOs may choose from 1 of 3 “tracks” which determine the level of financial risk:
• Track 1: one-sided risk model
• Track 2: low two-sided risk model
• Track 3: high two-sided risk model
Provider fully responsible for savings/losses per episode
Total bonus/loss potential capped at some percentage of total spending to account for high-cost outliers within episode category
Providers have some variable options:• Clinical conditions
• Episode length
Accountable Care Organizations
BundledPayments
Alternative Payment Models -Quality
Defined quality program where ACOs must meet specific performance thresholds on 33 quality measures falling into 4 domains:
• Patient/caregiver experience (8)
• Care coordination/patient safety (10)
• At-risk population (7)
• Preventive care (8)
Quality requirements and programs vary by bundled payment model
Accountable Care Organizations
BundledPayments
Alternative Payment Models
Medicare Shared Savings Program (MSSP) ACOs
Pioneer ACOs
Next Generation ACOs
Bundled Payment for Care Improvement (BPCI) Initiative
Comprehensive Care for Joint Replacement (CJR) Initiative
Accountable Care Organizations
BundledPayments
Alternative Payment ModelsProgram Demonstration? Voluntary
MSSP ACO
Pioneer ACO
Next Generation ACO
BPCI
CJR
Demonstrations implemented by CMMI
Demonstrations are not required to undergo rulemaking
Demonstrations are typically voluntary, though more mandatory programs likely
CJR the first example of CMS requiring providers to be reimbursed under an episodic methodology
More mandatory programs likely (e.g., cardiac episode)
Medicare Shared Savings Program ACOs
MSSP ACO Program Statistics
434 # of MSSP ACOs
MSSP ACOs by Risk Track2016
412 22
6
16
No DownsideRisk
DownsideRisk
Track 2
Track 3
Top 10 ACO Markets
# ACOs
% Benes
Boston 37 20%
New York 59 14%
Philadelphia 59 15%
Atlanta 109 11%
Chicago 82 16%
Dallas 54 11%
Kansas City 30 18%
Denver 12 9%
San Francisco 45 7%
Seattle 7 7%
Sources: CMS Data Library, accessed at http://data.cms.gov; Leavitt Partners, Medicare ACOs Announced: What Happened and Why It Matters, January 20, 2016.
MSSP ACO Program StatisticsHeat Map of MSSP ACO Activity
January, 2016
Source: CMS Data Library, accessed at http://data.cms.gov.
MSSP ACO Results
$465 M Total savings to Medicare Trust Fund
0 Number of ACOs Who Owed CMS Losses
82% Percent of quality measures on which ACOs improved
ACOs in Year 1 ACOs in Year 2 ACOs in Year 3
MSSP Performance Year 3 Results (2014) % of MSSP ACOs Achieving Savingsby Performance Year*
19%
27%
37%
Source: CMS Data Library, accessed at http://data.cms.gov.
*ACOs tend to perform better financially the longer they are in the program
MSSP Attrition & Financial Performance
Contract Status of ACOs with Positive Financial Results
Contract Status of ACOs with NoPositive Financial Results
Source: Tu, T., Caughey, W., Leavitt Partners, MSSP ACOs: Financial Savings and the Appetite for More. Research Brief, February 2016.
Pioneer ACO Model
Pioneer ACO Model
Where Pioneer ACOs Are
As of January 2016, 9 of the original 32 Pioneer ACOs remain in the program
Pioneer ACO Program Distinctions
Ongoing CMMI demonstration currently in 5th year
Higher levels of shared savings/risk possible than in MSSP
May experiment with alternative payment arrangements, such as reduced fee arrangements with SNFs
May access certain payment waivers, such as telehealth and SNF 3-day requirement waivers
Source: Center for Medicare and Medicaid Innovation: http://innovation.cms.gov.
Pioneer ACO Results$120 M
Pioneer ACO total savings to Medicare in 2014
$9 MTotal payments made to CMS by 3 Pioneers who had losses
11
6
3
Earned Bonus
Payments
Broke Even
Paid CMS
Losses
Pioneer ACO Financial Performance, Year 3 (2014)
n = 20
87.1 %Average quality composite score among Pioneer ACOs
Source: Center for Medicare and Medicaid Innovation: http://innovation.cms.gov.
Pioneer ACO Impacts on SNF
40%Reduction in Pioneer ACO
utilization of SNF services in the first performance year
17%Reduction in Pioneer ACO
utilization of SNF services in the second performance year
Key ACO Strategies
Aggressive management of narrow preferred PAC provider networks
Buying or starting PAC lines of business, primarily home health
Manage down SNF LOS
Shift SNF to home health
Shift hospital ED to SNF
Shift to outpatient$0.46Pioneer ACO increase in per capita Medicare spending on
Home Health, second year Source: Center for Medicare and Medicaid Innovation: http://innovation.cms.gov.
Pioneer ACO Impacts on SNF
Key ACO Strategies
Buying or starting PAC lines of business, primarily home health
Shift SNF to home health
Shift to outpatient
Risk to be included, may lose significant referral volume
Increased overall costs due to higher front-end costs
Increased acuity of SNF patients require increased resources
Pioneer ACO Program Attrition
2012 2013 2014 2015 2016
Number of Pioneer ACOs32
9
Reasons for Drop-Out
Start-up and maintenance costs were higher than anticipated
Took financial loss
Dropped into lower-risk ACO model (MSSP)
Entered Next Generation ACO model
Source: Center for Medicare and Medicaid Innovation: http://innovation.cms.gov.
Next Generation ACO Model
Next Generation ACO Model
Center for Medicare & Medicaid Innovation (CMMI) announced the new demonstration model last year
Model builds upon the Pioneer ACO model and will be used to test even more program changes to determine what might be applied to the broader MSSP ACO population
Provides even more payment program waivers and other benefit enhancements that apply to skilled nursing providers
Creates new categories of aligned providers to ACOs, each with different opportunities – implications for SNF providers
Next Generation ACO Model
Where Next Gen ACOs AreNext Gen ACO Program Distinctions
Newest CMMI ACO demonstration model
22 NGACOs announced for January 2016 start date
Built upon Pioneer model
Many program enhancements:• Greater level of risk/reward
potential
• Beneficiary engagement tools
• Stable and predictable benchmarks
• Program waivers (SNF 3-day)
• Flexible payment arrangements
Source: Center for Medicare and Medicaid Innovation: http://innovation.cms.gov.
Flexible Payment Arrangements
Mechanism 1: Normal FFS Payment + Monthly Infrastructure Payment
ACO
Preferred Providers
Next Generation Participants
All Other Medicare Providers
PBPM
Claim submission
Claim payment
Flexible Payment Arrangements
Mechanism 2: Population-Based Payments (PBP)
ACO
Preferred Providers
Next Generation Participants
All Other Medicare Providers
PBPM
Claim submission
Claim payment
Partial claim payment
Flexible Payment Arrangements
Mechanism 3: All-Inclusive Population-Based Payments (AIPBP)
ACO
Preferred Providers
Next Generation Participants
All Other Medicare Providers
PBPM
Claim submission
Claim payment
Partial claim payment
Flexible Payment Arrangements
Mechanisms 2 & 3
AIPBP provider must sign a “Fee Reduction Agreement,” which is an agreement between the provider and CMS stating that CMS will withhold claim payments and instead pay a predetermined amount to the ACO in monthly payments
AIPBP Provider and ACO negotiate agreement establishing program and payment terms:
• Methodology of payment (e.g., per diem vs. episodic)
• Rate/amount of payment (negotiated rates)
• Consensus on clinical protocols and pathways
• Expectations/criteria around quality performance to “earn back” withhold
Provider Categories & Implications
Alignment Quality Reporting Through
ACO
Eligible for ACO
Shared Savings
PBP AIPBP Coordinated
Care Reward
Telehealth SNF 3-day Rule
Post-Discharge
Home Visit
Participant
Preferred Provider
NGACO Model offers more options for SNF engagement
Increasing use of SNF 3-day stay waiver
Trend toward population-based payment and provider-to-provider rate negotiations
Implications for Skilled Nursing
Providers
Bundled Payment for Care Improvement (BPCI) Initiative
Bundled Payments for Care Improvement (BPCI) Initiative
Three-year demonstration program administered by CMMI, currently in Year 2
Tests 4 models of acute and post-acute care bundled payment• Model 1: Acute care only
• Model 2: Acute + post-acute
• Model 3: Post-acute only
• Model 4: Acute care only (prospective payment)
48 defined clinical episodes available for testing
Officially ended Phase 1 “trial” period in October 2015 – all BPCI providers are now in risk-bearing Phase 2
BPCI Participants
Targeting Opportunities for Savings
IndexAdmission
Physician SubsequentAdmissions
SNF Outpatient Hospice HHA Total
$12,700
$1,680
$3,160
$4,660 $579 $47
$1,930 $24,770
Episode Costs for Major Joint Replacement of the Lower Extremity (2013)90 Days after Index Admission
Source: Analysis of CMS Claims Data, 2013.
BPCI Results – Year 1
Model 2 Model 3
66%Percent of BPCI patients
discharged to institutional PAC* before program start
47%Percent of BPCI patients
discharged to institutional PAC* after program start
* SNF, IRF, LTCHSource: BPCI Evaluation Report, Year 1. The Lewin Group, February 2015.
$12,082
$7,465
Average SNF payment 90 days post-discharge for non-BPCI
patients
Average SNF payment 90 days post-discharge for BPCI patients
Provider Experience in BPCIOpportunities Challenges
Fortify relationships with care partners
Care redesign / collaboration on protocols and pathways
Shared savings
3-Day waiver (Model 2)
Early adopter / seat at the table
Access to data when not an episode initiator
Low volume / inability to adequately scale risk
Identifying patients in the bundle
Hospital dictation of rules (Model 2)
SNF avoidance and utilization management
BPCI Initiative – What’s Next?
Evaluation Report #2 expected in Q1 2016• First significant, conclusive results
BPCI is a closed demonstration – very likely there will be no future opportunity to engage
Secretary may expand any BPCI model nationally if evaluation shows a reduction in the cost growth rate and an improvement in quality
Future of bundling will look more like CJR than BPCI
Comprehensive Care for Joint Replacement (CJR) Initiative
Comprehensive Joint Replacement (CJR) Initiative
Five-year, mandatory bundled payment program for providers who operate in one of 67 MSAs
Runs April 1, 2016 – December 31, 2020
90-day episode spending targets for lower-extremity joint replacement (LEJR) procedures, primarily total hips and knees• MS-DRG 469
• MS-DRG 470
The hospital is the at-risk entity under CJR; no downside risk until Year 2
Hospitals may share up to 50% of financial risk with CJR “collaborators,” which include SNFs
Program waivers and alternative financing options begin in Year 2 (January 1, 2017)
CJR Design
Target prices based on 3-year historical spending of the hospital at first, transitioning to regional trend by year 4
Built-in limits to savings and loss potential
BPCI takes precedence
Rule encourages hospitals to gain-share with “collaborators,” including SNFs
CCJR waives:
SNF 3-day rule starting in Year 2 for SNFs with 3 or more stars on Nursing Home Compare (Five-Star)
Limits on physician home visits
Geographic site requirement and originating site requirement for telehealth reimbursement
Comprehensive Joint Replacement (CJR) Initiative
SNF Medicare Revenue Exposure to CJR(based on analysis of 2013 claims data)
CJR Program Overview
Source: AHCA internal analysis.
CJR Composite Quality Score
Percentile THA/TKA Complications
HCAHPS Survey PRO Data (Reporting Only)
>90th 10 8 2
>80th and <90th 9.25 7.4 “
>70th and <80th 8.5 6.8 “
>60th and <70th 7.75 6.2 “
>50th and <60th 7 5.6 “
>40th and <50th 6.25 5 “
>30th and <40th 5.5 4.4 “
<30th 0 0 “
CJR Composite Quality ScoreQuality Composite
Score RangeQuality Category Eligible for
Reconciliation Payment
Effective Discount % for
Reconciliation Payment
Effective Discount % for Repayment
Amount
>13.2 Excellent Yes 1.5% PY1: N/A*PY2-3: 0.5%PY4-5: 1.5%
>6 and <13.2 Good Yes 2% PY1: N/APY2-3: 1%PY4-5: 2%
>4 and <6 Acceptable Yes 3% PY1: N/APY2-3: 2%PY4-5: 3%
<4 Below Acceptable No 3% PY1: N/APY2-3: 2%PY4-5: 3%
CJR 3-Day Stay Waiver
Blanket waiver –providers will not have to “apply” to access the waiver
SNFs may access the waiver if they have been rated 3 stars or higher for at least 7 of the preceding 12 months
CMS will publish a “master list” of eligible SNFs updated at some time interval (e.g., quarterly)
CMS will issue sub-regulatory guidance to providers with more specific information about how to use the waiver
Represents broadest effort yet to test a waiver of the 3-day stay requirement
Broader Implications of CJR
Sets precedent as first mandatory bundled payment program
CMS preference for “hospital-controlled” bundled payments• CMS language in final rule: ““We may consider, through future
rulemaking, other episode of care models in which PGPs or PAC providers are financially responsible for the costs of care”
May expect to see another mandatory bundled payment program modeled after CJR, perhaps focused on cardiac episodes
AHCA CJR Data Resource
By MSA:
• Hospital volume
• Average episode spend by provider/service type
• Volumes to different PAC settings
• Readmission rates
• SNF average LOS
By Hospital:
• Volumes
• PAC referral patterns
• Readmission rates
Reports Will IncludeReport Sample
Shows distribution of spending over
episode by provider/service type
Reports will be available in 3-5 weeks
Outlook2017 and Onward
Over Time Less Payment Will be Traditional Medicare
• 2020 PROJECTION
Medicare Advantage
Other
Value-Based Purchasing
Traditional
2015 PROJECTION
Duals demos
1%
ACOs14%
Duals Demos
1%
ACOs16%
Value-Based Purchasing
76%
Bundled Payments
24%*
Bundled Payments
9%
Unaffected Spending
42%
Value-Based Purchasing
48%
FFS Spending Impacted by
Payment Reforms
Distribution of Medicare
Enrollment
FFS Spending Impacted by
Payment Reforms
Distribution of Medicare
Enrollment
Medicare Advantage
31%
Medicare Advantage
34%
Traditional Fee-for-Service
49%
Traditional Fee-for-Service
54%
* Includes hospital, PAC and clinical condition bundles.Source: Avalere Health
Number of Older Adults in Wisconsin by 2040*
23,676 26,273 32,598 40,415 46,331 49,337
31,800 32,587 34,993
40,731
51,955 65,411
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2016 2020 2025 2030 2035 2040
75-84 85 & Older
Number
of
License
d SNF
Beds:
33,677
*Data analysis by AHCA/NCAL Research Department
**The SCAN Foundation. DataBrief No.20: Seniors with Chronic Conditions and Functional Impairment.
Demand is defined as
significant deficits in
Activities of Daily Living
(ADL) and/or
Instrumental Activities
of Daily (IADLs).
Nationally research
indicates the
prevalence of disability
among older adults has
declined and that
chronic illness does not
necessarily lead to the
need for post acute and
long term care.**
Factors Impacting NF Demand and Suggested Areas for State Affiliate Research Before Assuming Demographics are a Solution
Understand Your State Specific Demographics• Resources: AHCA/NCAL State of the States Database; Administration on Aging AgED Database; State Departments of Economic Development and Planning as well as Departments of
Health also Track Such Data
Learn About Family Caregiver Capacity
• Resources: AARP State LTSS Scorecard (click on your state); Value of Family Caregiving – AARP
Assess HCBS Capacity Resources: Aging and Disability Resource Centers (ADRC – state transition and diversion program offices); State Medicaid HCBS Program Options; Implications of Medicaid Eligibility
Assess Nursing Center Capacity
• Resources: State Medicaid and Licensure and Certification Agency Data
Understand Delivery System Requirements
• Resources: State Medicaid HCBS Program Options; CMS Medicaid Managed Care LTSS Materials (final rule, interpretative guidance); State-Plan Contracts (contact your state for copies)
Carefully Review Investor Research
AHCA/NCAL Reimbursement Team
Name & Title Lead Area(s) Background
Mike Cheek, SVP for Reimbursement Policy and Legal Affairs
All Reimbursement Policy The Lewin Group, Avalere Health, State Medicaid LTC Director, National Association of Medicaid Directors
Dianne De La Mare, JD, MST, VP for Legal Affairs
Managed Care and ACO Contracting
Masters in Speech Therapy, JD
Caroline Haarmann, MPH, Senior Director, Medicaid Policy
State Health Systems Change, Medicaid Payment Policy
MACPAC (Congressional Medicaid Advisory Commission), District of Columbia Medicaid Agency, Thomason Reuters Data Analytics
Lilly Hummel, JD, Senior Director,NCAL
Medicare and Medicaid Payment Policy
Avalere Health, U.S. General Accountability Office
Narda Ipakchi, MBA, Senior Director, Managed Markets
Medicare and Medicaid Managed Care, Duals Integration
Avalere Health, Manatt Health
James Michel, Senior Director,Medicare Policy
ACOs, Bundling, HealthInformation Technology
The Advisory Board, Booz Allen Hamilton
AHCA/NCAL Member Resources To-Date & More to Come
Medicaid Managed Care Contracting Guide and Antitrust Guidance • State Affiliate Program Advocacy Overview and Recommended
Statutory Protections• State Affiliate Guide on Influencing State Contracting with Plans• Member Contracting Guide • State Affiliate Managed Care Technical Assistance Resource Center
Medicare Advantage Took Kit• Module 1 – Primer on Medicare Advantage Regulatory Structure• Module 2 – Plan Reimbursement and Implications for Providers • Module 3 – Contracting Guide for Members
AHCA/NCAL Member Resources To-Date and More to Come
Accountable Care Organizations • Primer on ACOs• ACO Contracting Tools
State of the States • State-by-State Medicaid Payment Systems, Provider Tax and State Plan Links• Demographic Information• Medicare Advantage and ACO Activity • Duals Demo Activity
Weekly eNewsletter – Reimbursement & Legal Week in Review
CJR Resource Center
Managed Care Technical Assistance Resource Center