4/6/2016
1
©Pathway Health 2013
Comprehensive Care for Joint Replacement
(CJR) Model
Lisa Thomson
Chief Marketing and Strategy Officer
2
©Pathway Health 2013
Current Initiatives
C
reat
ed b
y P
ath
way
Hea
lth
©Pathway Health 2013
Medicare Value Based Purchasing
Medicaid Reform
Performance based pay
Quality metrics
New-Performance Measures
Publically Reported Data
New Payment Model Expectations
Financial Risk Increase
Qu
alit
y In
cen
tive
–Li
nk
to p
aym
ent
Current
FFS
Episodic
Management
Shared Savings
ACO Shared Risk
Ultimate Goal
Global Payment
Quality
Incentive
Ne
w S
tan
dar
ds
and
Exp
ect
atio
ns
©Pathway Health 2013
Medicare VBP - Payment Demonstration Model
Payment Models
– Medicare Share Savings Program
– Medicare Acute Care Episode
– Integrated Health Networks (many)
– Dual Eligible Programs
– PACE
– Bundle Payments for Care Improvement
• Defined by episodes for care
• Set target price and quality measures
Shu
tte
r Sto
ck
4/6/2016
2
©Pathway Health 2013
• Bundled Payment
– Single payment for an array of services that may include multiple providers and multiple settings within an episode of care
– Traditional Medicare
– Traditional state-managed FFS Medicaid
– Private payers in Commercial insurance or managed Medicare or Medicaid
– Diagnosis Related Grouping (DRG) used for hospital reimbursement. Multiple other model designs exist.
BPCI
7©Pathway Health 2013
BPCI
©Pathway Health 2013
• Acute myocardial infarction Read MoreAmputation Read MoreAtherosclerosis Read MoreAutomatic implantable cardiac defibrillator generator or lead Read MoreBack and neck except spinal fusion Read MoreCardiac arrhythmia Read MoreCardiac defibrillator Read MoreCardiac valve Read MoreCellulitis Read MoreCervical spinal fusion Read MoreChest pain Read MoreChronic obstructive pulmonary disease, bronchitis/asthmae Read MoreCombined anterior posterior spinal fusion Read MoreComplex non-Cervical spinal fusion Read MoreCongestive heart failure Read MoreCoronary artery bypass graft surgery Read MoreDiabetes Read MoreEsophagitis, gastroenteritis and other digestive disorders Read MoreDouble joint replacement of the lower extremity Read MoreFractures femur and hip/pelvis Read MoreGastrointestinal hemorrhage Read MoreGastrointestinal obstruction Read More
Hip and femur procedures except major joint Read More
Lower extremity and humerus procedure except hip, foot, femur Read More
• Major bowel Read MoreMajor cardiovascular procedure Read MoreMajor joint replacement of the lower extremity Read MoreMajor joint replacement of upper extremity Read MoreMedical non-infectious orthopedic Read MoreMedical peripheral vascular disorders Read MoreNutritional and metabolic disorders Read MoreOther knee procedures Read MoreOther respiratory Read MoreOther vascular surgery Read MorePacemaker Read MorePacemaker Device replacement or revision Read MorePercutaneous coronary intervention Read MoreRed blood cell disorders Read MoreRemoval of orthopedic devices Read MoreRenal failure Revision of the hip or knee Read MoreSepsis Read MoreSimple pneumonia and respiratory infections Read MoreSpinal fusion (non-Cervical) Read MoreStroke Read MoreSyncope and collapse Read MoreTransient ischemia Read MoreUrinary tract infection Read More
BPCI
©Pathway Health 2013
Mandatory Bundle
©Pathway Health 2013
• Began April 1st - First mandatory APM!
• Five year demonstration program
• 90 day episode bundle including hospital stay
• Mandatory for approximately 800 hospitals in 67 locations (MSA)
• Acute Care bears financial risk
– 90 days post DC
– MS – DRG’s 469 and 470 (Major lower joint replacement
• Shared Savings
– Tied directly to specified quality measure performance targets
• Hospitals and Physicians have finalized data– Partnerships
– Referrals
– Network – drive referrals to lower cost settings
– Clinical systems
• $7 billion market for Medicare joint replacement cost in 2014
• Projected Savings to Medicare - $153 million
Comprehensive Care for Joint Replacement (CJR)
Sh
utt
er S
tock
©Pathway Health 2013
“Starting April 1, 2016, 67 areas of the country will participate in a CMS-mandated bundled payment model.
• The Comprehensive Care for Joint Replacement (CJR) model aims to support better and more efficient care for Medicare Part A beneficiaries undergoing the most common inpatient surgeries for Medicare beneficiaries: hip and knee replacements.
• This model tests bundled payment and quality measurement for an episode of care associated with hip and knee replacements to encourage hospitals, physicians, and post-acute care providers to work together to improve the quality and coordination of care from the initial hospitalization through recovery.” ~CMS
Description
12
4/6/2016
3
©Pathway Health 2013
The most common inpatient surgery for Medicare beneficiaries
• In 2014, there were more than 400,000 procedures
Can require lengthy recovery and rehabilitation periods
• In 2014, Medicare spent $7 billion for the hospitalizations alone
Quality and costs of care still vary greatly among providers
• Infections, implant failures can be 3 X’s higher at some hospitals
• $16,500 to $33,000 for surgery, hospital, & recovery across geographic areas
Hip and Knee Replacements (CMS Data)
13©Pathway Health 2013
7%4%
56%
3%1%
29%
Total Joint Replacement Spend Breakdown
Surgeon 7%
Readmission 4%
Hospital 56%
Pre-operative 3%
Other Consults 1%
Post Hospital (PAC, DME, Medication) 29%
©Pathway Health 2013
http://federalregister.gov/a/2015-29438
The Centers for Medicare & Medicaid Services have implemented a new Medicare Part A and B payment model under section 1115A of the Social Security Act, called the Comprehensive Care for Joint Replacement (CJR) model (formerly using the acronym CCJR), in which acute care hospitals in
certain selected geographic areas will receive retrospective bundled payments for episodes of care for lower extremity joint replacement or
reattachment of a lower extremity (LEJR).
CJR Model: Final Rule
15©Pathway Health 2013
July 9, 2015
• Proposed CJR rule published
September 8, 2015
• Comment period for CJR rule ended
November 16, 2015
• CMS finalized CJR regulations
April 1, 2016
• First performance period will begin
Timeline
16
©Pathway Health 2013
Hospitals
Physicians, HHA, SNF, & Others
Coordinated Care for
Beneficiaries
CJR Goal
17©Pathway Health 2013
21st
Century
BetterCare
Better Health
Lower Cost
Affordable Care Act Goals
18
4/6/2016
4
©Pathway Health 2013
Medicare fee-for-service payments made via alternative payment
models:
30% by 2016
50% by 2018
Medicare Goals
19
2016 2018
©Pathway Health 2013
1• Hospital held financially accountable for the quality and cost of the CJR
episode of care
2
• MS-DRG 469: Major joint replacement or reattachment of lower extremity with major complications or comorbidities
• MS-DRG 470: Major joint replacement or r4eattachment of lower extremity without major complications or comorbidities
3• Episode of care continues for 90 days following discharge
Reach the Goal Through Hospitals
20
©Pathway Health 2013
• Admission to a participating hospital and ultimately discharged under MS-DRG 469 or 470
Beginning
• 90 days post discharge
End
Episode Definition
21©Pathway Health 2013
Episode of Care Partners
Others
Physicians
Post Acute Care
• Bundled Items & Services
– Physicians
– Inpatient hospital admissions & re-admissions
– Inpatient psychiatric facilities
– PAC: LTCH, IRF, SNF, HHA
– Outpatient therapy
– Clinical labs
– DME
– Part B drugs
– Hospice
– Some care management payments
Hospital Partners
22
©Pathway Health 2013
• Acute clinical conditions not arising from existing episode-related chronic clinical conditions or complications of the LEJR surgery
• Chronic conditions that are generally not affected by the LEJR procedure or post-surgical care
• Excluded MS-DRGs and ICD-10-CM diagnosis codes
Exclusions
23©Pathway Health 2013
https://innovation.cms.gov/initiatives/cjr
Model: 67 MSAs, ~ 800 Hospitals
24
4/6/2016
5
©Pathway Health 2013
Madison
The Monroe Clinic
Divine Savior Healthcare
St. Mary’s Hospital
University of Wisconsin Hospitals and Clinics Authority
Milwaukee
Waukesha Memorial Hospital
Columbia Center, St. Mary’s Hospital Milwaukee, St. Mary’s Hospital Ozaukee
Aurora Medical Centers, Washington County, St. Luke’s, West Allis
Oconomowoc Memorial Hospital
St. Joseph’s Community Hospital of West Bend
Wheaton Franciscan Healthcare-St. Francis, St. Joseph, Franklin
Community Memorial Hospital
Froedtert Memorial Lutheran Hospital
Orthopaedic Hospital of Wisconsin
Midwest Orthopedic Specialty Hospital
Actual Wisconsin Hospitals
25 26
CMS Regions for Target Pricing
©Pathway Health 2013
Data.Medicare.gov
©Pathway Health 2013
• MS-DRG 469 and MDS-DRG 470
• With Hip Fx vs. Without Hip Fx
• Blend
– Hospital-specific historical spending
– Regional spending for LEJR episodes
• Regional component increases over time
• All providers will be paid throughout the year under existing Medicare payment systems
Target Prices
28
©Pathway Health 2013
MS-DRG Reimbursement to
Hospital
Actual Spending Analyzed by CMS at End
of Each Program Year
Additional Payment to Hospital or Repayment
to CMS
Retrospective Bundled Payments
29©Pathway Health 2013
• Actual Spending Below Target Price + Quality = Up to 5% of target price
Years 1 & 2
• Actual Spending Below Target Price + Quality = Up to 10% of target price
Year 3• Actual Spending
Below Target Price + Quality = Up to 20% of target price
Years 4 & 5
Hospital Incentives
30
4/6/2016
6
©Pathway Health 2013
• No responsibility to repay Medicare
Year 1
• Capped at 5% of target price
Year 2• Capped at 10%
of target price
Year 3
• Capped at 20% of target price
Years 4 & 5
Hospital Disincentives
31©Pathway Health 2013
Warning Letter
Plan of Correction
Reduce or Remove
Incentives
Increase Repayment
Amount
Expulsion
Non-Compliance Measures
32
©Pathway Health 2013
Quality First
• Minimal level of episode quality before receiving reconciliation payments when spending is below target
Performance and Improvement
• Hospital-Level Risk-Standardized Complication Rate for THA &/or TKA (NQF#1550)
• Hospital Consumer Survey (NQF#0166)
Avoidance of Expensive and Harmful Events
• Goals for all hospitals
Tools
• Relevant spending & utilization data
• Waiving some Medicare requirements
• Sharing best practices
Quality and Pay-for-Performance
33©Pathway Health 2013
BPCI and CJR
Source: American Hospital Association http://www.aha.org/content/16/issbrief-bundledpmt.pdf
©Pathway Health 2013
Retain freedom of choice
Existing safeguards remain in
place
Additional monitoring of claims
data
Beneficiary Benefits & Protections
35©Pathway Health 2013
WaiversTelehealth
Visits
Home Visits for Non-
HomeboundCollaborations
Additional “Flexibilities”
36
4/6/2016
7
©Pathway Health 2013
3 Day Rule Waived
• Following anchor hospitalization
• Begins in Year 2
3 Star or Higher SNF
• 7 of the previous 12 months
Discharges
• No premature discharges to SNF
• Beneficiaries must be able to exercise freedom of choice
SNF Waiver
37
©Pathway Health 2013
Implications for Stakeholders
38
©Pathway Health 2013
• Hospitals – accountability and risk
• Physicians – coordination of outcomes with acute, decrease variation, evidenced based care and best practice
• IRF – shift to lower cost settings, care complexity
• PAC – networks, care paths, delivery patterns
• SNF – ALOS, efficient, high quality, less costly care
• HHA –benefit from being lower cost provider, essential to bundle savings
• Payer – keeping close eye on success of CJR
Stakeholders
39
©Pathway Health 2013
Impact to Post Acute Care (PAC) Providers
40
©Pathway Health 2013
But before we discuss focus points …
41
©Pathway Health 2013
• Beneficiary Notifications
• This CMS-issued notification form is not modifiable by any entity or individual unless otherwise indicated in the form.
• Please see § 510.405 of the Comprehensive Care for Joint Replacement Final Rule for all requirements surrounding beneficiary notification.
– The final rule can be accessed here: https://www.federalregister.gov/articles/2015/11/24/2015-29438/medicare-program-comprehensive-care-for-joint-replacement-payment-model-for-acute-care-hospitals.
• In order to aid monitoring and compliance efforts, CMS recommends all CJR hospitals and their collaborators maintain a list of beneficiaries that receive these notification documents.
Beneficiary Notifications
42
4/6/2016
8
©Pathway Health 2013
Centers for Medicare & Medicaid Services
Comprehensive Care for Joint Replacement Model
Post-acute care provider/supplier Notification Letter
[Post-acute care provider name] has entered into a financial arrangement with [Hospital name] for participation in the Comprehensive Care for Joint Replacement (CJR) model. Through this arrangement, [Hospital name] may share payments received from Medicare as a result of reduced
episode of care spending and hospital internal cost savings with [Post-acute care provider]. [Hospital name] may also share financial accountability for increased episode of care
spending with [Post-acute care provider].
Beneficiary Notifications
43©Pathway Health 2013
1 Most spending variations are in the PAC setting
2 IRFs are the most expensive PAC setting
3 Readmissions are the most significant cost driver
4 SNF length of stay is a significant cost driver
5 Measures for recovery or outcomes don’t exist or are unclear
6 Bundled payments provide opportunities for non-conventional strategies
7 Know your value
PAC Focus Points
44
©Pathway Health 2013
DataGen Healthcare Analytics 2015
Spending Variations
45©Pathway Health 2013
This is about Medicare spending, not internal costs; therefore, the acute inpatient payment component of the bundle is always the same.
Hospitals must evaluate the efficacy of physicians’ post-acute care plans and work to
reduce Medicare spending in PAC settings.
The most successful CJR hospitals will reduce the incidence and magnitude of institutional
PAC.
PAC Spending Variations
46
©Pathway Health 2013
DataGen Healthcare Analytics 2015
IRFs Are Expensive
47©Pathway Health 2013
Average Episode Spending by First PAC Setting
IRF
~$36,000
SNF
~$32,000 HHA
~$28,000
Self-Care
~$16,500
IRFs Are Expensive
48
4/6/2016
9
©Pathway Health 2013
• Hospitals understand
– Most significant opportunity to increase gain or decrease loss occurs in PAC setting
– Average of 45% of all episode payments occur after the anchor DC
• Biggest variable –
– READMISSIONS
– ALOS PAC
– Intensity of rehabilitation
• Alignment with providers who demonstrate ability to efficiently provide high quality care
Data and Outcomes
49©Pathway Health 2013
Readmission rate for joint replacements is generally low; however, Medicare payments for the episode
are doubled when a patient is readmitted.
Why?
Major joint readmissions tend to be for revisions or surgical complications, after which the PAC work
generally starts all over.
Readmissions Are Expensive
50
©Pathway Health 2013
SNFs are the only PAC setting paid on a per diem basis by Medicare Part A.
There are 2 expense drivers for SNF care:
Length of Stay and Case Mix.
Even small LOS reductions can help reduce Medicare spending (and SNF revenue).
SNF Lengths of Stay (LOS)
51©Pathway Health 2013
No rigorous, comparative standards for benchmarking; only anecdotal evidence.
CJR data will provide data.
New SNF QMs will provide data as well!
Recovery and Outcome Measures
52
©Pathway Health 2013
New SNF QMs
53©Pathway Health 2013
Care Coordination
Telehealth
Home Delivered Meals
Transportation for Shopping, Outpatient Therapy
Potential episode savings generated by providing the services may cover the costs!
Opportunities
54
4/6/2016
10
©Pathway Health 2013
Knowing your value is the key to success!
How do you compare to your competition and to best practices?
Without this information, PAC providers are at risk!
“Low Spend” Providers have an advantage.
“High Spend” Providers will have to justify the higher cost or rectify it.
Your Value
55©Pathway Health 2013
For the CMS bundled payment system to work, hospitals will need to recruit high-
quality post-acute care partners.
Know Your Value
56
©Pathway Health 2013
Know Your Value
57©Pathway Health 2013
• Decrease SNF LOS
• Skip a SNF
• Build a SNF
• Partner with a SNF
– Increase MD Continuity
– Demand Value SNF Competencies from selected SNFs
– Scalability
• Increase HHA integration
• Narrow networks
Hospital Response to CJR
58
©Pathway Health 2013
Leadership Strategies
59
©Pathway Health 2013
• Not in my marketplace?
• Think again!
• CJR is the beginning
• Change operations and approach to care now
Whew…
60
4/6/2016
11
61©Pathway Health 2013
5 Star RatingQuality
MeasuresCustomer
Satisfaction
Costs of CareHospitalization
Rate
Other Data?
Other Care Models
What Do You Need To Know?
62
©Pathway Health 2013
Strategies for Success
So
urc
e –
Path
way
Hea
lth
Assess Readiness
Data and Technology
Capabilities and
Competencies
Partner and Collaboration
©Pathway Health 2013
• Document your delivery of care and services:
– Quality services
• Satisfaction survey (LTSS and PAC – separate)
• Overall ranking – 5 star and SNF performance measure
• Readmission
• ALOS per disease state
• TCOC
• HCC
• Clinical practices – evidenced based
• Care transition/care coordination
Becoming a valued partner
64
65©Pathway Health 2013
• “ a business or marketing statement that summarizes why a consumer should buy a product or use a service. This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings.”
• Create a Business Case –tell your story
• Service Delivery
• Staffing Model
• Specialties
• QAPI
• Key metrics
• Cost containment
• Communication
• Partnerships
Val Prop - Create
66
4/6/2016
12
©Pathway Health 2013
Leadership• Change agent – drive change through
“collective” creativity
• Refine and shape the culture
– (listen, appreciation and optimism)
• Embrace the challenge
– Lead creativity and innovation
• Acknowledge the essentials that should not change
• Think BIG! Look to the “road” ahead
• Energetic and Passionate – the fuel for change
©Pathway Health 2013
Thank You
Lisa ThomsonChief Marketing and Strategy Officer
Pathway Healthwww.pathwayhealth.com
(651) 407-869968