Implementation of a Perioperative Surgical Home (PSH)

VHA Southeast, Inc. Confidential information.

July 23, 2015

Mike Schweitzer, MD, MBA

VP Healthcare Delivery System Transformation

Implementation of a Perioperative Surgical Home (PSH)OrthoService Line Webinar


1. Explore Comprehensive Care for Joint Replacement (CCJR) and Medicare Access and CHIP Reauthorization Act (MACRA)

2. How to begin developing a PSH program at your organization

3. Engage Physician Leaders to prepare for MACRA MIPS or Value Based Payments through PSH

Educational Goals

3 |


VHA Southeast is a member owned cooperative comprised of not-for-profit healthcare organizations in Alabama, Florida,

Georgia, and the U.S. Virgin Islands. VHASE serves 23 members (75 hospitals and affiliated medical staffs).

Who is VHA Southeast?

4 |

Mission —To accelerate our members’ improvement of clinical

and economic performance and transformation in the healthcare

industry.


Polling Question #1: What do you think of the Perioperative Surgical Home (PSH) Model?

Please Select:

I don’t know what PSH is.

I am skeptical PSH will work.

I Want to learn more.

I will explore PSH development in my organization over next 3-6 months.

I already have PSH or similar model in my organization.


• Pre-op evaluations/care often not effective

• 1 in 7 Surgery Patients readmitted within 30 days nationwide (NEJM online

September 2013)

• Hopkins Frailty Score predictive of a patient experiencing a

postoperative complication (J AM Coll Surg. 2013; 217(4):665-670)

Perioperative Care – Current State

6 |


CMS announces proposed rule for Comprehensive Care for Joint Replacement (CCJR) bundled payment model for a 5 year performance period, beginning January 1, 2016 and ending December 31, 2020.

Requires the participation of hospitals within 75 geographical MSAs that have not voluntarily participated in BPCI for Total Joints as of July 1, 2015.

Hospitals will bear full financial risk (MS-DRG 469/470) for the episode of care including procedure, inpatient stay and all related care under Part A & B within the 90 days including post-acute care and physician service.

The policies discussed in this presentation are proposals subject to the notice and comment rulemaking process.

CMS Further Accelerates Adoption of Alternative Payment Models with Announcement of CCJR


CCJR Collaborator means one of the following:• SNF

• Home Health

• LTAC

• Inpatient Rehab Facility

Gainsharing payments, if distributed, must be distributed on an annual basis

Alignment payments from a CCJR Collaborator to a participant hospital may be made at any interval that is agreed upon by the parties

“Notwithstanding any CCJR sharing arrangements between the participant hospital and CCJR collaborators, the participant hospital must have ultimate responsibility for adhering to and otherwise fully complying with all provisions of the CCJR model.”

CCJR Aimed to Drive Collaboration

19

• Physician

• Non-physician practitioner

• Outpatient Therapy provider

• Physician Group Practice


Participant hospitals may assign various percentages of two-sided risk to collaborators.

Where that is the case, CMS would continue to make reconciliation payments and recoupments solely with the hospital

The hospital would be responsible for paying/recouping from its collaborators according to the agreements between those entities

CMS proposes to limit the hospital’s sharing of risk to 50% of the total repayment amount to CMS

The hospital would be required to retain 50% of the downside risk

The hospital could not share more than 25% of its repayment responsibility with any one provider or supplier.

Financial Arrangements: Risk sharing

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• HHS Secretary Burwell announced in January that 30% of payments from traditional Medicare benefits will be tied to alternative payment models such as bundled payments, ACOs, medical or specialty homes by end of 2016.

• 50% of Payments will shift from FFS to Value-base payments by end of 2018.

• Secretary Burwell also outlined a goal for 85% of all Medicare fee-for-service payments to be tied to quality or value payment incentives by 2016, and 90% by 2018.

Value-Based Payment (VBP) Acceleration of Timeline

6 9 |


The Health Care Transformation Task Force, whose members include six of the nation’s top 15 health systems and four of the top 25 health insurers, challenged other providers and payers to join its

commitment to put 75 percent of their business into value-based arrangements that focus on the Triple Aim of better health, better

care and lower costs by 2020. (www.hcttf.org)

Aetna will rapidly expand beyond its current 30% VBP

United Health Group will increase VBP arrangements to $65 billion by the end of 2018

Anthem which operates Blue Cross plans in 14 states, recently stated its value-based contracts are currently worth $38 billion

Cigna affiliated with over 100 ACOs and also many Bundled Payments

Value-Based Payment (VBP) Acceleration of Timeline

http://www.forbes.com/sites/brucejapsen/2015/02/04/aetna-cant-escape-fee-for-service-medicine-fast-enough/

7 10 |


Good Bye SGR….

Providers must choose Pay for Performance or APM options:

Pay for Performance: Merit-Based Incentive Payment System (MIPS) combines the current pay-for-performance programs into a single payment system - three prior incentive programs, the Physician Quality Reporting System (PQRS), the Value Modifier (VM), and Meaningful Use (MU) programs

Alternative Payment Model: Requires significant share of provider revenue in APM with two-sided risk and quality measures

Medicare Access and CHIP Reauthorization Act (MACRA) replaces SGR with a new performance-based payment

system and financial incentives for participation in alternative payment models.

9


Good Bye SGR…What is Coming in It’s Place?

10

April 1, 2015 July 1, 2015 2016 2017 2018 2019 2020

Track 1:

MIPS

(Default)

Track 2:

APMs

Sunsets penalties for MU, PQRS, and VBM

Measurement Period

Starts in 2017

0.0% 0.5%

0.5% Increase Annually


Considers achievement and improvement.

Poor Performers subject to payment reductions while good performers can qualify for payment increases. Initial “Threshold” will be determined based by Secretary of HHS using prior period composite scores.

Incentive payments must generally be budget neutral, thus a scaling factor of at most 3x may apply resulting in up to 27% payment increase.

The Elements of MIPS

13 |

4 Performance Categories:

Quality and Resource Use

must make up 60% of score

(CY 2019, 2020, 2021, and beyond)

Resource Use30%

Clinical Practice

Improvement Activities

Meaningful Use of EHR

25%

Quality30%

15%

PQRS & QCDR Measures

Cost Measures & Patient Attribution

Care Coordination, Patient Satisfaction, Access Measures

Meaningful Use Measures


MIPS System has Bigger Penalties

14

Courtesy Dr. Stan Stead


Risk-based contracts with Medicare Advantage plans count toward the all-payer requirement category

5% incentive payment to participate in APMs

To achieve full bonus, physicians must earn 25% of their Medicare income in 2019 from APMsand meet, yet to be defined, quality metrics.

Elements of APMs

15


• BUT physicians and others are eligible for incentive payments under a new Merit-Based Incentive Payment System (MIPS), and poor performers incur payment reductions.

• Health professionals participating in certain alternative payment models (APMs) are NOT subject to MIPS and could qualify for bonus

payments. Think PSH

• After 2025, there would be TWO conversion factors and the annual updates would be 0.75% for qualifying APM participants and 0.25% for others.

Key SGR reform-related provisions of Medicare Access and CHIP Reauthorization Act (MACRA)

16 |

• An annual 0.5% update factor applies for July

through December 2015 and for 2016 through 2019.

• The physician fee schedule conversion factor is then

frozen for the next 6 years (2020 through 2025).


MIPS:• Currently only 1% of eligible physicians received bonus in VBP in 2014

http://www.bakerhealthlawupdate.com/2015/04/five-things-to-know-about-the-medicare-sgr-fix/

• Total Penalty is up to 11% or Bonus of up to 27%

• Metrics and Qualification thresholds yet to be determined

• After 2026 increase in conversion factors is only 0.25%

APMs:

• 5% annual bonus

• Metrics and Qualification thresholds yet to be determined

• After 2026 increase in conversion factors is 0.75%

MIPS or APM?

17 |

Track 1:

MIPS

(Default)

Track 2:

APMs

http://www.bakerhealthlawupdate.com/2015/04/five-things-to-know-about-the-medicare-sgr-fix/


Catch the Wave by January 1, 2017

The “Party Wave”

18 |


Economic Accountability is Compelling Action

Historical distinction between payors and providers is

becoming increasingly blurred.

Payors Providers

Penalties for

readmissions

Value-based

purchasing

Bundled payments

or PSH

Development

of ACOs

Better

manage

sickest

patients

19 |


How can health care organizations adopt and implement Alternative Payment Models such as Co-management, PSH, CIN, or ACO?

• It Requires Physicians Learning New Skills and Tools:

Project Management

Change Management

Team Leadership

Physician Champions Must Learn to Lead

John Kotter: “Our Iceberg is

Melting”20 |


Hospital Value-Based Purchasing (VBP) Domains

1.00% 1.25% 1.50% 1.75% 2.00%

Percent of Medicare Reimbursement at Risk

21 |


$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

4 3 17 2 76 81 213 24 65 388 256 83 145 136 342 66 131 72 166 213 91 288 280 195 289 235 206 245 241 26 783 357 108 71 336 126 236 184 3

IC6 CA3 IC3 AA5 RA1 IC2 IC1 FC1 IC5 IA1 ZA1 AA3 YA2 XA1 QA2 BC1 AA4 GA3 PA1 CA1 GA2MA1FA1 AC1 GA1 BA1 EC1 NA1 EA1 CC1 KA1 UA1 AA2 KA2 YA1 GA4NA2 BA2 NA3

HCO, Cases

Average of Price-Standardized Episode Payments

Hospice Pmts

HHA Pmts

DME Pmts

SNF Pmts

Phys Pmts

OP Pmts

IP Pmts

Major joint replacement, lower extremity

Data Source: Member-submitted MSPB Hospital-Specific Data Files

Inpatient Discharges 1/1/13-12/31/13


HCO ‘x’ Average Price-Standardized Episode Payment Variance from VHASE by Claim TypeMajor joint replacement, lower extremity

Data Source: Member-submitted MSPB Hospital-Specific Data Files

Inpatient Discharges 1/1/13-12/31/13

23 |

($500) $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000

Inpatient

Outpatient

Physician

Skilled Nursing

DME

Home Health

Hospice

Total

Average Medicare Payment Variance


Creates a strong focus on quality and

clinical outcomes. Access to

sophisticated IT systems.

Legal basis to contract as single

entity with multiple health plans.

Opportunity to access better

compensation for achievement of

quality and efficiency goals.

Closer alignment with Hospital.

Creation of brand name identity in

marketplace.

Importance of PSH to the Physicians

24 |


Creates long term business

relationship with all participating

physicians.

Encourages physicians to focus

on shared objectives regarding

quality, cost and patient safety.

Strengthens physician

integration.

Positions hospital for APM or CIN

initiatives.

Importance of PSH to the Hospital

25 |


The measurement and transparency of performance and results.

Stable and consistent network of providers.

Demonstration of efficiencies.

Focus on quality and clinical outcomes.

Forum for working with providers to generate improvement in care.

Importance of PSH to the Payer Community

26 |

VHA Southeast, Inc. Confidential information.LEGEND: HDST = Healthcare Delivery System Transformation, DSP = Delivery System Performance, CCCM = Care Coordination & Cost Management, MSPB =

Medicare Spend Per Beneficiary, APMs = Alternative Payment Models, APAT = Academy for Physician Advancement and Transformation

Alternative Payment Model Infrastructure

Core

Competencies

Required

CapabilitiesCapabilities Description

VHA Southeast

Services

Episode

Management

Governance and

Infra-Structure

Develop infrastructure required for physician and

payer partnerships. Transform culture with both

formal committees & physician champions. (Legal &

FMV help required)

HDST: Physician Advisory

Council Development,

Governance & Management

Structures

Episode

Re-engineering

Define and re-engineer bundled definition and

process including service inclusions and exclusions,

payments, and optimizing strategies

• HDST: APMs

• DSP: CCCM w/ MSPB

Cost ManagementIdentify and implement total cost of care reduction in

safe and appropriate manner.

• HDST: APMs

• DSP: CCCM w/ MSPB

• Rev. & Cost Man.:

Supply Chain Services

• VHASE IBI Portal

Targeted Analytics &

Technology

Understand current state and measure, monitor &

evaluate future performance (internal trends/external

benchmarks) across continuum.

VHASE IBI Portal

Across

Continuum

Clinical Care

Delivery

Continuum of Care

Management

Assess & re-engineer care across the episode

continuum & execute continuous process

improvement.

DSP: CCCM w/MSPB, Care

Continuum Management

Model

Post-Acute NetworkIdentify optimal PAC partners, manage utilization

appropriately & partner to improve transitions of care

across the continuum.

HDST: Strategy Services,

Network & Strategy

Management

Provider

EngagementProvider Alignment

Develop culture of transparency & collaboration with

physicians & key providers. Grow the network of

participating providers and use gainsharing

methodologies.

HDST: APAT, Physician-

Hospital Integration, APMs


Bundled Payment Care Initiative (BPCI) Participants 2014-2015


BPCI vs CCJR

3 |

Program Structure BPCI CCJR

ParticipationVoluntary – Only entities that

have elected to participate

Mandatory – Entities that have not

chosen to voluntarily participate

Episode InitiatorsAcute Care hospitals or Physician

Group PracticesAcute Care Hospitals Only

Program Term3 years – July 2015

(Model 2 &3)5 years – Jan 2016

Target Price Cost

Efficiencies

Reconciliation payment if below

target price

Reconciliation payment if below

target price and meet all 3 quality

measures

Target Price

Calculation Basis

3 year historical hospital spend by

CMS

Blended 3 year historical hospital

CMS with increasing % based on

regional pricing

CMS Reconciliation

FrequencyQuarterly Annually

High Episode Risk

Adjustment

1/99th percentile

5/95th percentile

5/75th percentile

Actual episode payments capped at

2 standard deviations above regional

mean episode payments


Perioperative Surgical Home (PSH)

The PSH model is a patient-centered, physician-led interdisciplinary, and team-based system of coordinated care for the procedural and

surgical patient.

PSH spans the entire surgical experience from decision for the need for

surgery to 30-90 days post discharge from a medical facility.

PSH aim is to reduce variability in the perioperative care process.

The goal of the PSH is to enhance value and help achieve the Triple Aim:

What is a Perioperative Surgical Home? AAOS June 2014

http://www.aaos.org/news/aaosnow/jun14/advocacy7.asp

Better Patient Experience

Lower CostsBetter Healthcare

Perioperative Surgical Home


PSH Overview Stakeholders


Post-Discharge

Phase

Preoperative Phase

Operative Phase

PostoperativePhase

There will very likely be

multiple future variations

of the surgical home concept

that may work effectively,

depending on institutional

infrastructure, [priorities] and

yet to be identified external

forces..”

An Analysis of Methodologies that Can be Used to Validate if a

Perioperative Surgical Home Improves the Patient-Centeredness,

Evidence-Based Practice, Quality, Safety, and Value of Patient Care.

Vetter TR, Ivankova NV, Goeddel LA, McGwin G Jr, Pittet JF.

Anesthesiology. 2013 Dec;119(6):1261-74.

PSH Can be Built in Modules


Perioperative Care Clinic (PCC)

Pre-op Clinics can expand to Post-Discharge Transitional Care

Clinics

Using Project RED, Project Boost, and/or LACE Tool

Preoperative

• Patient engagement

• Assessment & triage

• Optimization

• Evidence based

protocols

• Education

• Transitional care plan

Long Term Recovery

• Coordination of

discharge plans

• Education of patients

and caregivers

• Transition to appropriate

level of care

• Rehabilitation and return

to function

• Reduced variation

PCC

VHA Southeast, Inc. Confidential information.34

Variation in Post Acute Care (PAC) Cost

Source: AHA Issue Brief ‘Moving Towards Bundled Payment’ Jan 2013

The source of the cost variation for each condition will

help identify where efforts should be targeted.


PAC Spend as Percent of Total Cost of Care

Source: Dobson DaVanzo Medicare Payment Bundling: Insights from Claims Data and Policy

Implications,at http://www.aha.org/research/reports/12bundling.shtml

40.0% 42.0% 44.0% 46.0% 48.0% 50.0% 52.0% 54.0% 56.0%

30 Day

60 Day

90 Day

46.0%

51.2%

54.5%

Fixed-length Episode Following Discharge From Index Hospital Admission

% o

f M

ed

icar

e F

ee

-fo

r-se

rvic

e E

xpe

nd

itu

res


CEO

CFO

CMO

Physician champions

PI department

Polling Question #2 – Who are first three stakeholders you would contact to start your APM? (multiple answer)

36 |

VHA Southeast, Inc. Confidential information.37

PSH Learning Collaborative Members


The Patient Journey

Navigating the Episode of Care

Comprehensive Journey Map of all the patient-provider actions

along the entire continuum of care

Identify all the areas where non-adherence or deviation from plan

or decision points can be challenging or a source of risk

Courtesy Wellbe

38


Become Increasingly Analytic

Guided

CarePath™

CareGuide™

Collecting ‘real-time’ patient-generated

data during the episode of care

Claims

Data

Clinical

Data

Patient-generated

Data

Courtesy Wellbe

39


Kaiser Baldwin Park, CA TKA over two years• Reduced LOS (1.9±0.6 days)

• POD#1 discharge (43%)

• 94% SNF bypass rate

• Potential savings > $1 million in 1 year

St. Francis Community Hospital Roslyn, NY Total Joints in first 3 Q• Complications decreased from 4.2% to 1.7%

• Blood transfusions decreased from 10.4% to 4.8%

• Patient Satisfaction with Physician increased from 77 to 86%

• Readmissions within 30 days decreased from 7.4% to 1.8%

PSH Outcomes Examples PSH Summit June 2015

40 |


Be an Indispensable Partner for Change

Physician Champions

Leading Change

41 |

VHA Southeast, Inc. Confidential information.42 |

Top Lessons Learned in PSH

Use quality as the “Change Agent”

Identify physician champions

Better collaboration among health care providers

Understand your costs

Be transparent

Choose Bundle - High Volume with High Variability

Information systems barriers

Use data to drive the process

Shift towards evidence-based practice

Labor-intensive to administer program

Improve the organization and coordination of care


CCJR

MACRA

BPCI

PSH

Still Clueless!

Polling Question #3 – Please select the models where you feel you have increased understanding (multiple answer):

43 |


Create a sense of urgency — “The Burning Platform”

Ownership and commitment to new expectations — patient-

centered, value-based, high quality, and cost-effective care

Creating the infrastructure to support Value Based Payments

Cultural transformation — Coordinated Care

If you are not involved, you do not share in the benefits

PSH Steps Forward

44 |

THANK YOU !


Contact Dr. Mike Schweitzer, Vice President of Healthcare Delivery System Transformation at [email protected] for more information.

Visit us online at www.vhasoutheast.com

45 |

mailto:[email protected]

http://www.vhasoutheast.com/

46

Streamlining Orthopedic Episodes of Care

www.wellbe.me

47

Upcoming Live Event

Musculoskeletal Leadership SummitSept 10-11, 2015 – Las Vegas, NV

http://www.orthoserviceline.com/summit

Speakers include:

• Jane Keller, CEO of OrthoIndy• Bill Munley, VP of Professional Services and Orthopedics at Bon Secours St. Francis Health System• Maureen Geary, Program Director for the Connecticut Joint Replacement Institute• Dr. Corey Lieber, Orthopedic Surgeon at Newport Orthopedic Institute/Hoag Hospital• Kimberly Meyers, Executive Director of Neurosciences and Spine at University of Colorado Hospital• Kevin Cullinan, Executive Director, Orthopedics at Catholic Healthcare Initiatives St. Vincent’s – Little Rock• …and more!

http://www.orthoserviceline.com/summit