1. CMS in the 21 st Century 23rd Annual HFMA Southern California and San Diego/Imperial Chapter Fall Conference David Saÿen, MBA Regional Administrator Centers for Medicare & Medicaid Services San Francisco September 10, 2013

2. The strategy is to concurrently pursue three aims

3. Success requires delivery system and payment transformation  Value-based purchasing  ACOs  Episode-based payments  Patient-centered Medical Homes  Data transparency Volume Driven Outcomes Driven Payment systems support collaboration Payment systems support fragmentation  Fragmented payment systems (IPPS, OPPS, RBRVS)  Fee-for-service payment model  Lack of transparency Private Sector + Public Sector + Innovation Center

4. Value-Based Purchasing Program Objectives over Time Towards Attainment of the Three-Part Aim Initial programs FY2012-2013 Proposed and near-term programs FY2014-2016 Longer-term FY2017+ Limited to hospitals (HVBP) and dialysis facilities (QIP) Existing measures providers recognize and understand Focus on provider awareness, participation, and engagement Expand to include physicians New measures to address HHS priorities Increasing emphasis on patient experience, cost, and clinical outcomes Increasing provider engagement to drive quality improvements, e.g., learning and action networks VBP measures and incentives aligned across multiple settings of care and at various levels of aggregation (individual physician, facility, health system) Measures are patient-centered and outcome oriented Measure set addresses all 6 national priorities well Rapid cycle measure development and implementation Continued support of QI and engagement of clinical community and patients Greater share of payment linked to quality Vision for VBP

5. FY2013 HVBP Program Summary Two domains: Clinical Process of Care (12 measures) Patient Experience of Care (8 HCAHPS dimensions) Hospitals are given points for Achievement and Improvement for each measure or dimension, with the greater set of points used 70% of Total Performance Score based on Clinical Process of Care measures 30% of Total Performance Score based on Patient Experience of Care dimensions Payment adjustments in process

6. 13 Clinical Process of Care Measures 8 Patient Experience of Care Dimensions 1.AMI-7a Fibrinolytic Therapy Received within 30 Minutes of Hospital Arrival 2.AMI-8 Primary PCI Received within 90 Minutes of Hospital Arrival 3.HF-1 Discharge Instructions 4.PN-3b Blood Cultures Performed in the ED Prior to Initial Antibiotic Received in Hospital 5.PN-6 Initial Antibiotic Selection for CAP in Immunocompetent Patient 6.SCIP-Inf-1 Prophylactic Antibiotic Received within One Hour Prior to Surgical Incision 7.SCIP-Inf-2 Prophylactic Antibiotic Selection for Surgical Patients 8.SCIP-Inf-3 Prophylactic Antibiotics Discontinued within 24 Hours After Surgery 9.SCIP-Inf-4 Cardiac Surgery Patients with Controlled 6 a.m. Postoperative Serum Glucose 10.SCIP–Inf–9 Postoperative Urinary Catheter Removal on Postoperative Day 1 or 2. 11.SCIP-Card-2 Surgery Patients on a Beta Blocker Prior to Arrival That Received a Beta Blocker During the Perioperative Period 12.SCIP-VTE-1 Surgery Patients with Recommended Venous Thromboembolism Prophylaxis Ordered 13. SCIP-VTE-2 Surgery Patients Who Received Appropriate Venous Thromboembolism Prophylaxis within 24 Hours 3 Mortality Measures 1.MORT-30-AMI Acute Myocardial Infarction (AMI) 30-day mortality rate 2.MORT-30-HF Heart Failure (HF) 30-day mortality rate 3.MORT-30-PN Pneumonia (PN) 30-day mortality rate Represents a new measure for the FY 2014 Program not in the FY 2013 Program. Domain Weights 1.Nurse Communication 2.Doctor Communication 3.Hospital Staff Responsiveness 4.Pain Management 5.Medicine Communication 6.Hospital Cleanliness and Quietness 7.Discharge Information 8.Overall Hospital Rating

7. 12 Clinical Process of Care Measures 8 Patient Experience of Care Dimensions 1.Nurse Communication 2.Doctor Communication 3.Hospital Staff Responsiveness 4.Pain Management 5.Medicine Communication 6.Hospital Cleanliness & Quietness 7.Discharge Information 8.Overall Hospital Rating 1.AMI-7a Fibrinolytic Therapy Received Within 30 Minutes of Hospital Arrival 2.AMI-8 Primary PCI Received Within 90 Minutes of Hospital Arrival 3.HF-1 Discharge Instructions 4.PN-3b Blood Cultures Performed in the ED Prior to Initial Antibiotic Received in Hospital 5.PN-6 Initial Antibiotic Selection for CAP in Immunocompetent Patient 6.SCIP-Inf-1 Prophylactic Antibiotic Received Within One Hour Prior to Surgical Incision 7.SCIP-Inf-2 Prophylactic Antibiotic Selection for Surgical Patients 8.SCIP-Inf-3 Prophylactic Antibiotics Discontinued Within 24 Hours After Surgery 9.SCIP-Inf-4 Cardiac Surgery Patients with Controlled 6AM Postoperative Serum Glucose 10.SCIP–Inf–9 Postoperative Urinary Catheter Removal on Post Operative Day 1 or 2. 11.SCIP-Card-2 Surgery Patients on a Beta Blocker Prior to Arrival That Received a Beta Blocker During the Perioperative Period 12.SCIP-VTE-2 Surgery Patients Who Received Appropriate Venous Thromboembolism Prophylaxis Within 24 Hours 5 Outcome Measures 1.MORT-30-AMI Acute Myocardial Infarction (AMI) 30-day mortality rate 2.MORT-30-HF Heart Failure (HF) 30-day mortality rate 3.MORT-30-PN Pneumonia (PN) 30-day mortality rate 4.PSI-90 Patient safety for selected indicators (composite) 5.CLABSI Central Line-Associated Blood Stream Infection Represents a new measure for the FY 2015 program not in the FY 2014 program. FY 2015 Finalized Domains and Measures/Dimensions Domain Weights 1 Efficiency Measure 1.MSPB-1 Medicare Spending per Beneficiary measure

8. Physician Quality Reporting System (PQRS) and Value Modifier PQRS incentive: ends in 2014 PQRS payment adjustment: starts in 2013; overlaps with the incentive for 2 years Value Modifier: first reporting year is 2013; affects payment in 2015 – Must include all providers by payment year 2017 (measurement year 2015)

9. Value-Based Payment Modifier Value Modifier Scoring: Combine each quality measure into a quality composite and each cost measure into a cost composite using the following domains:

10. Readmissions penalties for applicable hospitals starting FY 13 The FY 2012 IPPS/LTCH PPS Final Rule sets forth: Conditions and readmissions to which program will apply for the first program year Readmission measures/methodology and calculation of readmission rates (e.g., CMS will use 30-day AMI, HF, and PN measures based on 3 years of data: July 1, ‘08 - June 30, ‘11) Public reporting of readmission data Next year’s (FY13) proposed rule will include specific information regarding payment adjustment For more information, see: https://www.cms.gov/AcuteInpatientPPS/FR2012/list.asp https://www.cms.gov/AcuteInpatientPPS/FR2012/list.asp Reducing Hospital Readmissions (ACA Sec. 3025)

11. Date of download: 2/1/2013 Copyright © 2012 American Medical Association. All rights reserved. From: Association Between Quality Improvement for Care Transitions in Communities and Rehospitalizations Among Medicare Beneficiaries JAMA. 2013;309(4):381-391. doi:10.1001/jama.2012.216607 Means (solid lines) and upper and lower control limits (dashed lines) set by the experience of 2006-2008. Vertical dotted line indicates start of quality improvement in the intervention communities. Figure Legend :

13. Fee for Service Medicare Recovery Audit Program The Recovery Auditors are CMS contractors who are tasked with detecting and correcting improper payments Statute gives CMS the authority to pay the Recovery Auditors on a contingency fee basis. Primarily review claims after they are paid (post payment review) In September 2012, CMS implemented a 3-year demonstration to allow for prepayment review in 11 error-prone states (including California and Missouri for Region D)

14. Fee for Service Medicare Recovery Audit Program

15. FY 2012 Results Overpayments Collected - $2.291 billion Underpayments Restored - $109.4 million Total Program Corrections - $2.4 billion

16. Fee for Service Medicare Recovery Audit Program FY 2012 Results – California

17. FY 2012 Results – Region D (includes California) Top Overpayment Issues – Minor Surgery and Other Treatment Billed as Inpatient – Medical Necessity Review of Surgical Cardiovascular Procedures – Medical Necessity Review of Neurological Conditions Top Underpayment Issues – Incorrect Patient Status – MS-DRG Validation of Gastrointestinal Procedures – MS-DRG Validation of Nervous System Procedures

18. RAC Contact Information www.cms.gov/Recovery-Audit-Program RAC@cms.hhs.gov

19. Accountable Care Organizations 259 ACOs – 221 Medicare Shared Savings Program ACOs 35 also participating in the Advance Payment Model – 32 Pioneer ACOs – 6 Physician Group Practices Over 4 million beneficiaries receiving care from ACO providers

20. Fast Facts – All MSSP ACOs (April 2012, July 2012, January 2013 starts)

21. Results: ACO Participation is Growing Rapidly All ACOs Assigned Beneficiaries by County (4.0 million total) Source: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Downloads/All-Starts-MSSP-ACO.pdf

22. Pioneer ACOs Succeed in Improving Care, Lowering Costs Key results for performance year 1: 40% Pioneer ACOs produced shared savings with CMS, generating a gross savings of $87.6 million in 2012 and a net savings of $33 million to Medicare. Costs for Pioneer ACO beneficiaries grew by only 0.3%. This is below historical Medicare growth rates and well below the 0.8% growth rate for similar beneficiaries. As a group, Pioneer ACOs generated gross savings of $87.6 million, or 1.2 percent savings on a total benchmark of $7.59 billion for over 669,000 beneficiaries. 13 Pioneer ACOs earned shared savings totaling $76.09 million. 18 Pioneer ACOs generated savings while 14 generated losses. 2 Pioneer ACOS owe preliminary shared losses totaling nearly $4.0 million. Pioneer ACOs successfully reported quality measures and performed better than the Medicare fee- for-service population on a variety of measures, such as blood pressure and cholesterol control measures

23. COMPREHENSIVE PRIMARY CARE Aims: Better health Better care Lower cost Continuous improvement driven by data Comprehensive primary care functions: Risk-stratified care management Access and continuity Planned care for chronic conditions and preventive care. Patient and caregiver engagement Coordination of care across the medical neighborhood Enhanced, accountable payment Optimal use of health IT Supportive Multi-payer Environment Practice and Payment Redesign through the CPC initiative

24. 1.Risk-stratified care management 2.Access and continuity 3.Planned care for chronic conditions and preventive care 4.Patient and caregiver engagement 5.Coordination of care across the medical neighborhood CPC initiative: What is CMS trying to support?

25. Model 1Model 2Model 3Model 4 Episode All acute patients, all DRGs Selected DRGs + post-acute period Post acute only for selected DRGs Selected DRGs Services included in the bundle All part A DRG- based payments Part A and B services during the initial inpatient stay, post-acute period and readmissions Part A and B services during the post-acute period and readmissions All Part A and B services (hospital, physician) and readmissions PaymentRetrospective Prospective Participants 3 representing 32 health care facilities 55 representing 195 health care organizations 14 representing 165 health care organizations 37 representing 75 health care facilities 25 Bundled Payments: 4 Models

26. Improving Care for Medicare-Medicaid Enrollees

27. More Information Medicare-Medicaid Coordination Office www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid- Coordination/Medicare-Medicaid-Coordination-Office/ Medicare-MedicaidCoordination@cms.hhs.gov

28. Many free preventive services and a free annual wellness visit. A 52.5% discount on covered brand-name medications for those in the prescription drug donut hole. More than 6.6 million beneficiaries have saved over $7 billion since the law was signed. The donut hole will be closed in 2020. Cracks down on fraud to protect Medicare, including tougher penalties for criminals. Makes sure your doctors can spend more time with you and improve care coordination. Improvements that extend the life of the Medicare Trust Fund. The Law Strengthens Medicare

29. Many preventive services like flu shots, diabetes screenings, mammograms, and other cancer screenings are free. Every year, you can get a free Wellness Visit – a chance to sit down and spend more time with your doctor to discuss your health. In the first six months of 2013, 16.5 million people with traditional Medicare received at least one of these free services. Before the law passed, a person with traditional Medicare could pay as much as $160 for some colorectal screenings – today, it is free. The Law Keeps Seniors Healthy

30. Seniors in Medicare now get 52.5% off their covered brand- name drugs and 21% off of the cost of generic drugs while in the donut hole. This discount has saved Californians $573,726,255 on prescription drugs. These savings occur at the pharmacy. You don’t have to file any forms or wait for a check. The donut hole will be closed by 2020. The Law Saves Seniors Money

31. The health care law provides unprecedented new tools and resources to fight and prevent fraud and abuse in Medicare. The Law Cracks Down on Fraud and Abuse “Metro Detroit Man Charged in $30 million Medicare Fraud Scheme” -- Detroit Free Press “Fraud Offenders Convicted in Massive Home Healthcare Case” -- The Miami Herald “Health Care Fraud Prosecutions on Pace To Rise 85%” -- USA Today

32. Some seniors with multiple chronic conditions see an average of 14 different doctors and fill 50 prescriptions a year. The health care law helps doctors and nurses coordinate care using electronic health records. The law helps your doctors and specialists stay on the same page, helping you spend more time with your doctor. The Law Helps Improve Care

33. Protection from the worst insurance company abuses Makes health care more affordable Better access to care The Law Helps Families

34. Insurance companies can no longer deny coverage to children with pre-existing conditions. An additional 3.0 million young adults have health insurance (435,000 in California). Millions more Americans have access to free preventive services. Insurance companies are more accountable to consumers. Thousands of new doctors and nurses around the country.

35. The law protects all your guaranteed Medicare benefits. You can continue to choose your own doctor. Seniors still have access to a strong Medicare Advantage program. The law adds 10 years to the life of the Medicare Trust Fund. Did You Know…

36. A new way to get health insurance Enrollment starts October 1, 2013 Coverage begins January 2014 About 25 million Americans will have access to quality health insurance – Up to 20 million may qualify for help to make it more affordable – Working families can get help through the Marketplace The Health Insurance Marketplace

37. Help will be available in the Marketplace – Toll-free call center - 24/7 150 languages – Website chat 24/7 (English and Spanish) – Help in-person Navigators Other trained enrollment assisters – Local Community Health Centers, libraries, hospitals and other locations in local communities Agents and brokers Assistance – It’s Available If You Need It

38. Learn More https://www.healthcare.gov/ 1-800-318-2596 http://www.coveredca.com/ 1-888-975-1142

39. Contact Information David W. Saÿen Regional Administrator San Francisco Regional Office Centers for Medicare & Medicaid Services 415-744-3501 David.Sayen@cms.hhs.gov