Maryland’s New All-Payer Model—A Journey Together

Background

3 Approved New All-Payer Model  Maryland is implementing a new All-Payer Model for hospital payment  New Model approved by CMS/CMMI effective January 1, 2014  Health Services Cost Review Commission leading the implementation  The All-Payer Model shifts focus  From per inpatient admission  To all payer, per capita, total hospital payment

4 Long Standing Medicare Waiver  Medicare waiver granted July 1, 1977  It’s what makes the system “all-payer”  Old waiver test was based on rate of increase in Medicare payment per admission  New waiver based on total hospital revenue per capita  Considerable value to State and hospitals  All payers pay share of uncompensated care and medical education costs  Limits cost shifting

5 Shifts Focus to Patients  Unprecedented effort to improve health and outcomes, and control costs for patients  Gain control of the revenue budget and focus on providing the right services and reducing utilization that can be avoided with better care  Change delivery system together with all providers Maryland’s All Payer Model Improve Patient Care Improve Population Health Lower Total Cost of Care

6 Approved Model Timeline  Phase Year Hospital Model  Maryland all-payer hospital model  Developing in alignment with the broader health care system  Phase 2 – Total Cost of Care Model  Phase 1 efforts will come together in a Phase 2 proposal  To be submitted in Phase 1, End of Year 3  Implementation beyond Year 5 will further advance the three-part aim

7 Approved Model at a Glance  All-Payer total hospital per capita revenue growth ceiling of 3.58% annual growth  Medicare payment savings of $330 million over 5 years.  Patient and population centered-measures and targets to promote care improvement  Medicare readmission reductions to national average  30% reduction in preventable conditions under Maryland’s Hospital Acquired Condition program (MHAC) over a 5 year period  Other quality improvement targets

Implementation

9 HSCRC Model Implementation Timeline Phase 1 (to 6/30/14) Phase 2 (7/1/14 – 3/30/15) Phase 3 (4/1/15 – 3/30/16) Phase 4 (2016- Beyond) Bring hospitals onto global revenue budgets Identify, monitor, and address clinical and cost improvement opportunities Implement additional population-based and patient centered approaches Develop proposal to focus on the broader health system beyond 2018 Begin public input process: advisory council and work groups Enhance models, monitoring and infrastructure Formalize partnerships for engagement and improvement Evolve alignment models and payment approaches Increase focus on total cost of care Secure resources, and bring together all stakeholders to develop approach Complete

10 Phase 1--Focus of Initial Implementation Activities Bring Hospitals to Global Budgets Initial Payment Policy Changes Advisory Council Implementation Workgroups Adapt Quality and Payment Policies to New Model

11 Global Budget Model for Hospitals  All hospitals on global budgets  What is a Global budget? Fixed revenue budget for hospital covering all services, known at the beginning of the year. Hospital $100 million VolumeRate BUDGET 100,000$1,000 Actual INCREASE 120,000$ 833 Actual DECREASE 90,000$1,111

12 Initial Public Engagement Process  Engaged broad set of stakeholders in HSCRC policy making and implementation of new model  Advisory Council, 4 workgroups and 6 subgroups  100+ appointees  Consumers, Employers, Providers, Payers, Nurses  Technical White Papers – 18 Shared Publically  Established processes for transparency and openness  Public meetings  Access to information  Opportunity for comment

Plans for Phase 2

14 Phase 2– Continuing implementation and planning during FY 2015 Enhance infrastructure and plan partnership activities Enhance HSCRC Infrastructure and Monitoring Refine Hospital Payment Models Continue focus on Uncompensated Care and Assessments Initiate Partnership Activities

15 Public Engagement Approach – Phase 2 HSCRC Advisory Council Alignment Models Consumer Engagement/ Outreach and Education Care Coordination Initiatives and Infrastructure Payment Models Performance Measurement Potential Ad Hoc Subgroups Medicaid Assessment Market Share Total Cost of Care Monitoring GBR Infrastructure Investment Rpt GBR Rev/Budget Corridor GBR Template Multi Agency and Stakeholder Groups Efficiency Physician Alignment LTC/Post Acute Transfers

Opportunities for Patient Centered and Population Based Improvements

17 Population Health for Seniors  Generations now alive are among the first in history to be raised with the expectation of old age, forerunners of a longevity revolution that will be felt for centuries to come. Some twenty percentage of all humans who have ever lived past the age of 65 are now alive. So profound is this demographic revolution that every aspect of social life and society is affected.

18 Opportunities for Success Model Opportunities Transition to global models (COMPLETE) Transition to global models (COMPLETE) Reduce Medicare cost Reduce Medicare cost Lower use—reduce avoidable volumes with effective care management and quality improvementLower use—reduce avoidable volumes with effective care management and quality improvement Integrate population health approaches Thoughtful controlled shifts to lower cost settings with net savingsThoughtful controlled shifts to lower cost settings with net savings Rethink the business model/capacity and innovateRethink the business model/capacity and innovate Transition to global models (COMPLETE) Transition to global models (COMPLETE) Reduce Medicare cost Reduce Medicare cost Lower use—reduce avoidable volumes with effective care management and quality improvementLower use—reduce avoidable volumes with effective care management and quality improvement Integrate population health approaches Thoughtful controlled shifts to lower cost settings with net savingsThoughtful controlled shifts to lower cost settings with net savings Rethink the business model/capacity and innovateRethink the business model/capacity and innovate Delivery System Objectives Improved value Sustainable delivery system Support provider alignment & delivery reform Improved value Sustainable delivery system Support provider alignment & delivery reform

19 Potentially Avoidable Hospital Utilization (PAUs)  In order balance the revenue model, PAUs must be reduced  PAUs are “Hospital care that is unplanned and can be prevented through improved care, coordination, effective primary care and improved population health.”  30- Day Readmissions/Rehospitalizations (includes ER)  Preventable Admissions and ER Visits (based on AHRQ Prevention Quality Indicators and other)  Avoidable admissions for SNF and assisted living residents beyond PQIs)  Potentially preventable complications  Admissions and ER visits for high needs patients can be moderated with better chronic care and care coordination

20 Partnerships to Improve Outcomes  Prevent admissions—integrate care, avoid and provide early treatment for conditions New conversation with hospitals on global budgets  Expedite discharges to post-acute care services;  Optimize post acute services;  Avoid ER observation and selected admissions with alternative SNF treatment;  Better manage care transitions; and  Establish protocols for referrals back to acute care

21 Partnerships to Improve Outcomes- INTERACT GOAL: Increase use of INTERACT approach  INTERACT is a quality improvement program designed to improve the early identification, assessment, documentation, and communication about changes in the status of residents in skilled nursing facilities and assisted living facilities. The goal of INTERACT is to improve care and reduce the frequency of potentially avoidable transfers to the acute hospital. Such transfers can result in numerous complications of hospitalization, and billions of dollars in unnecessary health care expenditures.  Recent survey conducted by Lifespan shows few providers using tools and forms

22 Partnerships to Improve Outcomes-GET CONNECTED GOAL: Increase information exchange, especially information about patterns of care between SNFs, assisted living, and hospitals  The Chesapeake Regional Information System for our Patients (CRISP) is a nonprofit corporation created to function as Maryland’s state-designated health information exchange  CRISP has information on all hospital admissions and discharges, lacks source of admissions through ERs  State applied for grant to connect long term and post acute providers

23 Partnerships to Improve Outcomes-- TRANSITION GOAL: Improve care transitions between hospitals and long-term/post-acute providers/back to home to reduce readmissions  Work with hospitals to improve transitions, including back to home transitions from post-acute settings  Participate: Transitions: Handle With Care The Maryland Hospital Association is working with partner organizations to reduce avoidable readmissions within Maryland and improve care transitions for patients and families.

24 A Journey Together Thank you for the opportunity to work together to improve care for Marylanders.