1. The Ever Shifting Sands: Health Policy Influencing Readmissions Eric A. Coleman, MD, MPH, AGSF, FACP Professor of Medicine, Head, Division of Health Care Policy and Research (c) Eric A. Coleman, MD, MPH 1

2. Roadmap (1)Shifting sands of national health policies (2)Key theme—physician fee schedule (3)Key theme—pay for value (4)Key theme—population health (c) Eric A. Coleman, MD, MPH

3. Shifting National Health Policies (c) Eric A. Coleman, MD, MPH 3

4. Triple Aim 4

5. New Payment Policies Signal a Shift from Encounter to Episode to Population Care Penalties for hospitals with excessive readmissions Codes to pay physicians for post-hospital discharge care coordination provided to Medicare beneficiaries Payment mechanism for community organizations to bill Medicare for transitional care Bundled payment for episodes of care Accountable care organizations (c) Eric A. Coleman, MD, MPH 5

6. Transitional Care Management Codes Designed to promote greater support through both face-to-face and non face-to-face encounters New CPT codes (99495 and 99496) to pay physicians (and NPs & PAs) for post-hospital discharge (30 days) care coordination provided to FFS Medicare beneficiaries $163.88 or $230.86, for combined face-to-face and non face-to-face (depending on E&M level 3 or 4 and whether face-to-face visit is <14 days or <7 days) (c) Eric A. Coleman, MD, MPH 6

7. Care Coordination Services Include: Non-Face-to-Face Communication with patient and/or caregiver w/in 2 days of D/C Communication with home health or other community services Patient/family caregiver education to support self-management Support for treatment adherence and medication management Review of discharge information and follow-up on diagnostic tests Face-to-Face Office or home visit within 14 or 7 days of discharge (c) Eric A. Coleman, MD, MPH 7

8. CMS Is Likely to Implement a New Complex Care Code for Ambulatory Care Public comment just completed Would share many of the common elements found in the newly released Transition Care Management codes (c) Eric A. Coleman, MD, MPH 8

9. Patient Centered Medical Homes Model of comprehensive primary care Strong orientation towards care integration/coordination Greater emphasis on supporting self-management Better communication with specialists and facilities Major emphasis on incorporating technology Focus on achieving quality and safety benchmarks (c) Eric A. Coleman, MD, MPH 9

10. Enter the Retail Clinics Concept--embed a NP run clinic into a retail chain store 1400 nationwide—in lead CVS (650) and Walgreens (372) Attractive to consumers with high deductible plans, with difficulty accessing PCP, and who want convenience Initially included immunizations & school physicals, now moving into disease management (HTN, DM, Asthma) Insurers and ACOs are increasingly embracing (c) Eric A. Coleman, MD, MPH 10

11. Proposed MedPAC Recommendation: Readmission Penalties for SNFs Medicare Payment Advisory Commission’s (MedPAC) 2014 budget proposal recommendations to Congress Proposal reduces payments by up to 3% for SNFs with high rates of care-sensitive, preventable readmissions Proposed start date in 2017 (c) Eric A. Coleman, MD, MPH

12. Medicare Two Midnight Rule If a physician expects a beneficiary’s treatment to require a stay in the hospital lasting at least two midnights, and admits the beneficiary to the hospital based on that expectation, it is presumed to be appropriate that the hospital receive Medicare Part A payment (rather than Observation Part B) Began October 1, 2013 (c) Eric A. Coleman, MD, MPH

13. Moving from Encounters to Episodes: Bundling of Services for Episodes of Care Could include inpatient hospital services combined with post-acute care services or post-acute care services only Bundle could be 30 days or 90 days (c) Eric A. Coleman, MD, MPH 13 (c) Eric A. Coleman, MD, MPH

14. MedPAC Bundling Approaches (c) Eric A. Coleman, MD, MPH 14

15. PAC Services By Condition (c) Eric A. Coleman, MD, MPH 15

16. Moving from Episodes to Populations: Accountable Care Organizations Move from several select providers sharing a bundled payment to organizing care across a community or region Multiple providers are organized to the needs of a population of patients (minimum = 5000) Patients are attributed to the ACO based on prior care seeking patterns; they are strongly encouraged to receive care from providers in the ACO but are not restricted (c) Eric A. Coleman, MD, MPH 16

17. Accountable Care Organizations Follow the Money ACO can be organized by physician group, hospital or other ACO accepts varying levels of risk for costs of attributed population (variant Medicare Shared Savings Plan) In return, the ACO is rewarded for meeting quality metrics and cost containment goals Information exchange, risk identification, and cross continuum collaboration are keys to success (c) Eric A. Coleman, MD, MPH 17

18. And of Course—Many Newly Insured Americans Seeking Care Lack capacity to incorporate into existing primary care Massachusetts experience New options (c) Eric A. Coleman, MD, MPH 18

19. Physician Fee Schedule (c) Eric A. Coleman, MD, MPH 19

20. Where We Have Been The SGR or Sustainable Growth Rate Passed in 1997 Medicare physician payment rates set through a formula based on economic growth (the SGR) For the first few years, physicians received modest pay increases In 2002 physicians were outraged by a proposed 5% cut Every year since Congress has postponed the cuts 2013 proposed cut is 24% Deferrals increase price of a fix (estimated at $139 billion/10 yrs) The current fix expires on Dec. 31, 2013 (c) Eric A. Coleman, MD, MPH 20

21. Where We Are Going Lot of uncertainty and anxiety The SGR is widely viewed as a failure As we speak, the Senate Finance and House Ways and Means Committee is entertaining a proposal with significant bipartisan support (c) Eric A. Coleman, MD, MPH 21

22. Summary of Current Plan on Table Repeals the SGR Transitions Medicare away from a volume-based system towards one based on value Specifically—the proposed plan freezes any physician payment updates for at least 10 years Instead, physicians will be eligible for payment increases if we participate in Alternate Payment Models--PCMH, Bundled Payment, or ACO (c) Eric A. Coleman, MD, MPH 22

23. Tell Me More The proposal explicitly encourages participation in APM(s) (PCMH, Bundled Payment, or ACO) Professionals who receive a significant portion of their revenue from an APM(s) that involves financial risk and quality measurement will receive a bonus payment The proposal would encourage care management services for individuals with complex chronic care needs through the development of new payment codes (c) Eric A. Coleman, MD, MPH 23

24. Keep Talking… A Value Based Performance (VBP) would begin in 2017 Professionals who receive a significant portion of their revenues from an APM(s) would be excluded The VBP program would assess performance: 1) Quality 2) Resource Use 3) Clinical Practice Improvement Activities 4) EHR Meaningful Use. (c) Eric A. Coleman, MD, MPH 24

25. Pay for Value (c) Eric A. Coleman, MD, MPH 25

26. Value Based Performance (VBP) Buyers should hold providers of health care accountable for both cost and quality of care VBP brings together info on quality of health care, including patient outcomes and health status, with data on the dollar outlays going towards health VBP focuses on managing the use of the health care system to reduce inappropriate care and to identify and reward the best-performing providers. Meyer, Rybowski, and Eichler, 1997 26

27. Replacing Volume with Value Physicians have largely been rewarded for doing more Payers are adopting reimbursement that puts the provider at risk for delivering high quality and cost effective care Physicians have been reporting on quality measures for years through Medicare’s PQRS Until now, physicians paid for simply reporting data Future payments based on meeting quality metrics (c) Eric A. Coleman, MD, MPH 27

28. Population Health (c) Eric A. Coleman, MD, MPH 28

29. Principles of Population Health Employ principles of population-based care – Segment population—healthy, chronically ill, frail, end of life and customize approach to each group – More explicit focus on prevention and wellness – Risk stratify population – Employ disease registries – Contact extends beyond face-to-face encounters (c) Eric A. Coleman, MD, MPH 29

30. Thank You 30