Presentation on theme: "Leading the Change Maximizing Payment Models"— Presentation transcript:
1Leading the Change Maximizing Payment Models Melinda S. Hancock, FHFMA, CPAPartnerDHG HealthcareChair Elect, HFMAHFMA Lead #LikeAGirlNovember 14, 2014
2"If your actions inspire others to dream more, learn more, do more, and become more, you are a leader.” – John Quincy Adams
3ACA Gains through 2019 Amounts in Billions Source:CBO and Joint Committee on Taxation, Projection
4Industry Tipping Point RevenueTimeHow do local market conditions impact timing considerations?Can market-changing events create an urgent paradigm shift?What is my step-change business model risk?Do I have the financial tools to adequately analyze relevant states?
5Hierarchy of Risk and Payment Models Payment Model & Increasing Risk Acceptance5
6Alignment of Strategy and Metrics Questions to AskHow many metrics am I tracking?How many metrics are duplicated? Do they have the same numerator and denominator? Source?Are they aligned with our results and strategic goals?What contracts are coming up for renewal that should have new metrics or should be at risk (mgd care, medical directorships, PMAs, etc.)What are we focused on?
10New NQS Based Domains for FY 2017 Clinical Care - Process = 5%HCAHPS = 25%Clinical Care - Outcomes = 25%Safety = 20%MSPB = 25%
11VBP – FY13 Domain Weights Performance Period: July 1, 2011 – March 31, 2012 Reimbursement Period: October 1, 2012 – September 30, 2013Core Measures = 70%
12VBP – FY14 Domain Weights Performance Period: April 1, 2012 – December 31, 2012 Reimbursement Period: October 1, 2013 – September 30, 2014Outcomes = 25%Core Measures = 45%
13VBP – FY15 Domain Weights Performance Period: January 1, 2013 – December 31, 2013 Reimbursement Period: October 1, 2014 – September 30, 2015HCAHPS = 30%Core Measures = 20%Outcomes = 30%MSPB = 20%One Measure!!
14VBP – FY16 Domain Weights Performance Period: January 1, 2014 – December 31, 2014 Reimbursement Period: October 1, 2015 – September 30, 2016Core Measures = 10%HCAHPS = 25%MSPB = 25%Outcomes = 40%
15VBP – FY16 Domain Weights Performance Period: January 1, 2014 – December 31, 2014 Reimbursement Period: October 1, 2015 – September 30, 2016Clinical Care - Process = 5%HCAHPS = 25%Clinical Care - Outcomes = 25%Safety = 20%MSPB = 25%
16Value Based Purchasing Outcomes = IncomeMandatory Pay for Performance Program3,500 hospitals are included in this program across the countryReimbursement Determine Two Ways:AchievementHow we compare to National Top Decile (350 Hospitals)ImprovementHow we measure against ourselvesDid we do better than a previously measured baseline period
17Value Based Purchasing Percent of Medicare Reimbursement at RiskFY 2013 – 1.00%FY 2014 – 1.25%FY 2015 – 1.50%FY 2016 – 1.75%FY 2017 – 2.00%FY 2018 – 2.00%FY 2019 – 2.00%FY 20xx – refers to the Federal Fiscal Year (Oct. 1 – Sep. 30) when DRG payments will be affected
18VBP FY 2016 – New Measures Patient Experience No Change – Same HCAHPS MeasuresCore Measures5 Dropped; 1 NewOutcomes3 New MeasuresEfficiencyNo Change
19VBP – FY 2016 – Patient Experience HCAHPSHospital Consumer Assessment of Healthcare Providers SurveyAn engagement survey CMS has mandated each hospital give to every discharged inpatientConsists of 27 questions that lead to the 8 categories assessed for VBPPatients score each question on scale of 4For answers to count, patients must give hospitals a score of 4 or “Always”
20VBP FY 2016 – Patient Experience Communication with NursesCommunication with DoctorsResponsiveness of Hospital StaffPain ManagementCommunication about MedicinesCleanliness and Quietness of HospitalDischarge InformationOverall Rating of Hospital
32Outcomes – 30 Day Mortality Currently in 3 Performance PeriodsFY 2016 ended June 30, 2014FY 2019 began July 1, 201430 Day Mortality MeasuresAssess deaths: AMI, HF, and PN that occur within 30 days after admission; which, depending on the length of stay, may occur post- discharge….
33CMS 30 Day Risk-Standardized Mortality Rate Calculation =Measure (AMI, HF, PN) National Crude RateFacility Predicted DeathsXFacility Expected Deaths
34VBP FY 2016 - Efficiency Medicare Spend Per Beneficiary (MSPB) Captures total Medicare Spending Per Beneficiary relative to a hospital stay, bundling hospital sources (Part A) with post acute care (Part B)Bundles the cost of care delivered to a beneficiary for an episode across the continuum of care:3 Days PriorHospital Inpatient Stay30 Days post Discharge
37PROPOSED MSPB Measures Additional Efficiency Measures proposed to be addedRisk Adjusted similarly to MSPBProposed to facilitate alignment with the Physician Value Based Payment Modifier programIncludes Part A and B and 3 days prior to admission and 30 days post dischargeMedicalSurgicalKidney/Urinary Tract InfectionHip replacement/revisionCellulitisKnee replacement/revisionGastrointestinal hemorrhageLumbar spine fusion/refusionSOURCE: May 1, 2014 Federal Register
38System was penalized $376,003 in FY’15 VBP Program Must acknowledge the amount UNEARNEDOf the programs dollars made available:System did not capitalize on $6,187,541
43VBP – CMS Proposed Future Measures FY 2018 Program (Performance Period: CY 2016)Patient Experience: Care TransitionFY 2019 Program (Performance Period: CY 2017)Surgical Complication: Total Hip and Total Knee Arthroplasty
44FY 19 New Measure Added THA/TKA for 30 month performance period. January 1, 2015-June 30, 2017Baseline of July 1, 2010-June 30, 2013Risk standardized measure for complications after Total Hips and Knees surgeries for up to 90 days post surgeryOne of eight complications: AMI, pneumonia, sepsis, SSI, PE, death, mechanical complication or periprosthetic joint infection/wound infection.Each has a defined time frameEach is a ‘Yes’ or ‘NoRisk adjusted for patient age, sex and comorbiditiesSOURCE: August 2014 Proposed Rules Federal Register
47Readmission Reduction Program 9% of Current and Future Medicare Reimbursement at Risk3% penalty of Medicare Reimbursement at risk each program yearMeasured Populations 30 days from DISCHARGEAMI, HF, PN, COPD, THA & TKAAugust 2014: CABG Added to FY 2017Performance Periods: 3 Year Rolling ProgramFY’15: July 1, 2010 – June 30, 2013 – 3%FY’16: July 1, 2011 – June 30, 2014 – 3%FY’17: July 1, 2012 – June 30, 2015 – 3%FY’18: July 1, 2013 – June 30, 2016 – 3%FY’19: July 1, 2014 – June 30, 2017 – 3%Currently participating in 3 performance periods simultaneously
48How are Readmissions Measured? Scoring Index based at 1.0Calculate Excess Readmission RatioExcess Readmission Ratio > 1 = BADExcess Readmission Ratio < 1 = GOODFacility Predicted ValueFacility Expected Value
52Hospital Acquired Conditions (1% at Risk*) 12 Hospital Acquired Conditions IdentifiedDivided in to 2 DomainsIf a hospital is in the BOTTOM QUARTILE (worst performing 25% in the country), it will be penalized a FULL 1% of Medicare ReimbursementPenalties will begin FY’15 (beginning October 1, 2014)*1% After DSH, Uncompensated Care, and IME
56Hospital Acquired Conditions: FY 2016 First Domain: PSIs25%Second Domain: CDC75%Pressure Ulcer RateCLABSIForeign Object Left in BodyCAUTIIatrogenic Pneumothorax RateSSI Following Colon Surgery (FY 2016)Postoperative Physiologic and Metabolic Derangement RateSSI Following Abdominal Hysterectomy (FY 2016)Postoperative Pulmonary Embolism and Deep Vein Thrombosis RateAccidental Puncture and Laceration Rate
63VBP – CMS Proposed Future Measures FY 2018 Program (Performance Period: CY 2016)Patient Experience: Care TransitionFY 2019 Program (Performance Period: CY 2017)Surgical Complication: Total Hip and Total Knee Arthroplasty
64FY 19 New Measure SOURCE: August 2014 Proposed Rules Federal Register Added THA/TKA for 30 month performance period.January 1, 2015-June 30, 2017Baseline of July 1, 2010-June 30, 2013Risk standardized measure for complications after Total Hips and Knees surgeries for up to 90 days post surgeryOne of eight complications: AMI, pneumonia, sepsis, SSI, PE, death, mechanical complication or periprosthetic joint infection/wound infection.Each has a defined time frameEach is a ‘Yes’ or ‘NoRisk adjusted for patient age, sex and comorbiditiesSOURCE: August 2014 Proposed Rules Federal Register
66Description of Models 1 - 4 Models 2 and 3 are the most popular by far- retrospective vs prospective models that include the post acute care components
67Bundled Payments Model 1 and 4 Model 1 is Retrospective and is all DRGsModel 4 is ProspectiveAcuteLTACH/SNF/IRFHHHomeReadmission67
68Bundled Payments Model 2 Model 2 is Retrospective For 30-60-90 days AcuteLTACH/SNF/IRFHHHomeReadmissionModel 2Model 2 is RetrospectiveFor days68
69Bundled Payments Model 3 Model 3 is Retrospective For 30-60-90 days AcuteLTACH/SNF/IRFHHHomeReadmissionModel 3Model 3 is RetrospectiveFor days69
70Oncology / Hematology (1) General Medicine / Internal Medicine (10) The EpisodesCMS created 48 Episodes, each with up to 15 individual MS-DRG codesWe categorized Episodes into 9 Service Lines; illustrative purposes onlyModel 2, 3, or 4 applicants may select 1-48 Episodes for testingSpine (5)Cardiac Services (12)Vascular Services (3)Orthopedics (10)Neurology (2)Oncology / Hematology (1)Pulmonology (3)General Surgery (2)General Medicine / Internal Medicine (10)70
71Advantages of Participation Improved quality of care for patientsReduced complications, readmissions, and costImproved ability to work with hospitals, physicians, nursing homes, home health, rehab centers, and other providers to improve overall care quality and servicePotential competitive advantage within market with physicians and post-acute careOpportunity to receive payment aligned with these goals and based on outcomes
72Where are the Bundled Payments? MEDICARE: Cohort 1COMMERCIAL as of July 201472
73Early Results of BPCI Cohort 2 Tremendous increase in the number of applications in the most recent open enrollment in April 2014: Nearly Triple!Models 2,3,4 were open for enrollmentCurrently in the Phase 1 period which is the non risk, decision making period. Phase 2 is when the Episode Initiator starts to accept risk
74Changes In the Cohort 2 Timeline: 7/31/14 EventOriginal DateRevised Date*Historical Claims & Target PricingLate Summer 2014November 2014Go/No Go Decision to ParticipateNovember 1, 2014January 11, 2015Go Live with RiskJanuary 1, 2015April 1, 2015Other significant changes:ADDITION OF EPISODES: You can now add episodes in July 2015 and October 2015: only 1 episode is required for April 1, Phase 1 ends in October 2015B-CARE: B-CARE quality data wont be collected until Spring 2015Option for Delayed Reconciliation: Will offer a 4 quarter timeline for reconciliation.* Revised again in October 2014
75Readiness: Risk Capability What are your data analytics and capabilities and ability to operationalize your quality dataWhat is the maturity of your physician network and post acute care network? What do you know about each? What don’t you know?How are you doing on the VBP and RRP that are building blocks for this? How are you going to manage the gain sharingWhat quality metrics are you tracking and need to improve that can be built into this programWhat internal cost sharing could you roll out with this?75
76Strategic Planning: How does it all tie in? System/Facility Strategic PlanClinically Integrated Networks/Post Acute Care NetworksPayment ModelsMSSP/BPCI/VBP/RRP/HACManaged Care/Direct to Employer Opportunities
77DRG Inpatient and PACS Fee for Service Model Bundled Episodic Model DRG 470 Total Joint Replacement w/out CCModel 2DRG Inpatient and PACS Fee for Service Model+++$3,207$10,129$8,965$616=$22,927x98%HomeHome HealthSNFIRFOutpt. RehabMD$22,468ReadmissionEpisodic period for model 2: 3 days prior to admission to 90 days post discharge from hospital$22,468Bundled Episodic ModelNote: any CMI aggregate charges lower than $22,468 can be shared with providers via gain sharing model
78Gain Sharing Model Physician Setting ($$) Shared Reward Surgeon AnesthesiologistHospitalistOutpatient PhysicianSettingHospitalSNFHome Health
79Bundled Payment Episode Pricing and Gain Sharing 2013Historical Cost Per Episode$12,500Target Price$13,647Physicians (35%) $86Update factorQuality MetricsFor illustration:3% inflation/yrDiscount = 3%Settlement(Per Case)$247Environment of Care - Hospital (40%)$99Quality MetricsProcedure – nursing, rehab, cost categories. What % of revenue can the cost be to break-even. Implants – 29 to 31%. Reduce the total cost to meet those break-even number. If the doctors don’t hit this number, their group will not qualify – break even analysis on what they are doing.BPLNEpisode Definitions Risk AdjustmentActual FFS Cost during Performance Period$13,400Environment of Care - Post-acute (25%)$62Quality Metrics
80BPCI Multiple Bonus Payments: Physicians 2 opportunities for Physicians to be awarded BonusesInternal Cost Savings PoolBundled Payment Savings PoolBoth have required Quality Metrics and Cost Savings to be metCost Savings MUST be directly attributed to Quality Improvement and Care Redesign80
81Outpatient Bundling…coming soon? In February 2014, CMMI issued a Request for Information on a new bundled payment program to expand to outpatient.Focus is Specialty Physicians and onProcedures and (2) complex chronic careHighlighted colonoscopy, cataract surgery, & radiation therapy for procedural options.Regarding the chronic care, “CMS is considering development of a model that would incentivize specialists to more efficiently manage the care provided to beneficiaries with complex or chronic medical conditions over the period of time that corresponds to the specialty practitioner’s long term involvement with managing the beneficiary’s care.”Was seeking responses until March 13
82Outpatient BundlingReferred to by CMS as: “Comprehensive Ambulatory Payment Classification (APC)”Finalized in the CY 2014 OPPS/ASC Final RuleAffect payments to 4,000 hospitals and 5,300 ASC’sDelayed implementation to January 1, 2015 instead of the traditional outpatient October 1 implementation dateExtra time allowed the Agency, hospitals, and physicians more time to evaluate and comment on the policy
83Outpatient Bundling – Comprehensive APC’s Single Medicare payment rather than individual APC payments throughout the episode25 Bundled Outpatient ProceduresProposed Payment could include all hospital services reported on the claim covered under Medicare Part B for up to a proposed 6 Month PeriodFew exceptions resulting in a single beneficiary copayment per claim
86Affinity Groups Current Large System CFO Council Large System Revenue Cycle CouncilStrategic CFO CouncilBeing FormedCMMI Bundled for Care Improvement CouncilPayer Focused Affinity GroupNewly Formed and Actively MeetingHealth Care Economics Professional CouncilPhysician Group Practice Executive CouncilStrategy Executive CouncilAcademic Medical Center CFO Council
87Master Level Seminars Chicago, IL | Dec. 8-10, 2014 Beyond Big Data: Developing a Business Intelligence and Analytics PracticePopulation Health Management and the Next Generation of Clinical IntegrationWashington, DC | Feb , 2015Transparency, Metrics, and Communication: Proven Practices for Revenue Cycle StrategiesSeattle, WA | March 25-27, 2015
88Improve the Billing and Payment Experience for Patients hfma.org/dollars88
90Enhance Price Transparency Clarifies basic definitions that are often misusedSets forth guiding principlesEstablishes roles for payers, providers, othersReflects consensus of key stakeholdershfma.org/dollars
91Demystify Price Information for Consumers Describes how to request price estimates, step by stepClarifies what estimates may or may not includeExplains in-network and out-of-network careDefines key termsAvailable for posting on your website at no chargeHardcopies available for purchase in bulk at a nominal price through AHA’s online storehfma.org/transparencyahaonlinestore.org
92Best Practices Address Key Issues Provision of CareRegistration and Insurance VerificationFinancial CounselingPatient SharePrior Balances (if applicable)Balance Resolution
93Achieve Recognition as an Adopter of Best Practices Recognition demonstrates commitment to best practices in patient financial communicationsBased on HFMA review of an application and supporting documentationAll provider organizations may applyRecognition valid for two yearsAdopters may use the phrase “Supporter of the Patient Financial Communications Best Practices” in their marketing materials.
94Leading the Change from Volume to Value Defining and delivering valueKey organizational capabilities for building valueOrganizational road mapshfma.org/valueprojectHFMA's Value Project helps healthcare organizations create value for the multiple purchasers of health care. The transformation toward a value-based healthcare system is reshaping the delivery of care, patient expectations, and payment structures.In the resources HFMA has produced for the Value Project since its inception in 2010, healthcare finance leaders and clinical partners come together to:Define the practices of providers who are leading the way toward a value-based healthcare systemDescribe the primary capabilities that healthcare organizations will need to develop in the areas of people and culture, business intelligence, performance improvement, and contract and risk management to improve the value of care providedProvide specific strategies, tactics, and tools that healthcare organizations can use to build, enhance, and communicate their value capabilitiesIdentify the trends today that are defining the future state of value in health care and describe new care delivery models that could help healthcare organizations create valueThe various reports produced as part of this project are pictured on the next slide.
95New Report Extends Value Resources to Reflect Industry Realignment Acquisition and Affiliation StrategiesAcquisition andAffiliation StrategiesCurrent State & Future Directions of ValueValue In Health CareHMFA’s Value ProjectFour Key Capabilities for ValueBuildingValue-DrivingCapabilitiesDefining &Delivering ValueDefining andOrganizational Road Maps for Value-Driven Health CareThe Value Journey:Organizational Road Maps for Value DrivenHealth Carehfma.org/valueproject
96Career Strategies HFMA Resources “Choose a job you love, and you will never have to work a day in your life.” Confucius96
98Your personal plan…what does it really mean? Leadership…Your personal plan…what does it really mean?“Leadership has nothing to do with titles; it has everything to do with, “Do you inspire other people? Do they want to follow you? Do they want to be with you?”-Tom Atchison, author of Followership: A Practical Guide to Aligning Leaders and FollowersIn closing, I would like to thank each of you for being a leader in our industry.As you see by the quote from Leadership expert Tom Atchison on this slide, “you don’t need formal authority in the form of titles to lead change. You just need to be able to inspire others to join you in the change leadership process.”98
99Be an Exceptional Leader Well cultivated self awarenessCompelling visionA real way with peopleMasterful executionWell cultivated self awareness:Leading with conviction – identify your values and beliefs and let them guide decision making, even if it leads to unpopular decisionsUsing emotional intelligence – recognize your strengths and weaknesses and manage your emotions.Earning trust ant loyalty – be willing to admit mistakes, do what you'll say you‘ll do and pay attention to the concerns of others.Energize staff- encourage strong work ethic and enthusiasm by modeling it personally.Compelling vision:Develop vision anticipates changes and includes strategies to adapt them.Communicating vision – help others to understand the future state and communicate their role in reaching that state.A real way with people:Listen like you mean it – be approachable and open-mindedGive feedback, set clear expectations and provide appropriate criticism and praise when appropriate.Mentoring direct reports – invest time in othersDevelop a high performance teamMasterful execution:Understand the informal sources of power in your org and work to influence themBuilding true consensusUse mindful decision making-facts, goals, ethics, alternatives, and judgmentDriving resultsSustaining creativity-be open to new ideasCultivate adaptability – bring clarity
100Be “Great by Choice” Fire bullets instead of cannonballs. 10ers are extremely disciplinedThey use empirical data and continually plan for the “what if”The take the 20 Mile MarchPerformance markers and self imposed constraintsFire bullets instead of cannonballs.Only shoot cannon balls after testing.Show great financial constraintZoom out – then zoom in.The best leaders were more disciplined, more empirical, and more paranoid.It is more important to scale innovation; blend with creativity with discipline.Fast decision and fast actions are a good way to get killed.Great companies changed less in reaction to a radically changed world than comparison companies.
101Develop Your Leaders…“You cannot lead without knowing the needs of your people—what drives them, what makes them do what they do; then you can give them opportunities to succeed based on their own psychology of success.”Develop your leaders….Kerry Gillespie, FHFMA, vice president, operations, Community Health System, Inc., Brentwood, TN, and a member of HFMA’s Tennessee Chapter101101
102Everyone Is a Leader….Everyone in this room is a leader. I’m asking each of you to renew your commitment to leading our industry forward, to ensuring its long term viability and quality. Together, we CAN improve health care. Together, we can and we must • Mentor young professionals as we have been mentored, • Rise above the uncertainty and frustration of today, and • Work in partnership with our colleagues throughout the industry to lead the change. Kari Cornicelli HFMA National Chair 2014/2015
103New Skills for A Leader Convening collaborative efforts Making decisions on behalf of your organizationCommitment to move the alliance forwardConfidence that the alliance will "get to its destination"
104Trend Toward Collaboration Across Traditional Boundaries 8 Key Elements Required for Successful CollaborationA common pain (a shared problem)A convener of stature (an influential leader)Representatives of substance with authority to make decisionsLeaders committed to move the alliance forwardA clearly defined purposeEstablished rulesConfidence that the alliance will "get to its destination"A shared pool of reliable informationSource: Mike Leavitt and Rich McKeown. Finding Allies, Building Alliances: 8 Elements That Bring…and Keep People Together