Changes to Performance-Based Payment Programs Sule Calikoglu, Ph.D. Deputy Director of Research and Methodology

Maryland Quality-Based Payment Initiatives QBR (Quality Based Reimbursement) Clinical Process of Care Measures Patient Experience of Care (HCAHPS) Patient Outcomes MHAC (Maryland Hospital-Acquired Conditions) 65 Potentially Preventable Complications ARR Payment Methodology Shared Savings Readmissions

FY 2015 Changes to QBR FY 2015 payments: Performance Period: CY 2013 Base Period: FY 2012 Eliminated appropriateness of care measurement from the QBR program Removed topped off measures from the opportunity domain Added Patient Outcome Measures: A mortality measure developed using 3M APR-DRG grouper risk of mortality (ROM) on admission

QBR MEASURES AND DOMAINS

FY 2016 Changes to QBR Clinical Measurement and HCAHPS are aligned with CMS program National Measure list National Thresholds and Benchmarks National Data Source Performance periods (Federal Fiscal Year instead of Calendar Year) New Outcome Measures Agency for Health Care Quality Patient Safety Indicators (10%) Central Line Blood Stream Infections (CLABSI) (10%)

Maryland Hospital Acquired Conditions Initiative Implemented in July 2009 Relies on Present on Admission Indicators (POA) for secondary diagnosis PPCs are defined as harmful events (accidental laceration during a procedure) or negative outcomes (hospital acquired pneumonia) that may result from the process of care and treatment rather than from a natural progression of underlying disease.

FY 2015 Changes FY 2015 payments: Performance Period: CY 2013 Base Period: FY 2012 Added Improvement Scale based on comparing hospital’s performance to their own base line Raised the bar by expected MHAC values at the 85% of the state average Excluded two types of cases from counts of PPCs Hospice Palliative Care Patients (defined as cases with ICD-9 code = V66.7) Patients with more than 6 PPCs

MHAC Components Attainment Scale Improvement Scale Includes 50 PPCs selected based on clinical and data quality Score is based on case-mix adjusted PPC rates weighted by the estimated resource use Revenue neutral scaling Rewards are given if a hospital performs better than 85 percent of state average. Maximum reduction is 2 % of total inpatient revenue Includes 5 PPCs that are high cost, high prevalence and high priority Measures percent change from a base year for each hospital Revenue neutral scaling Rewards are given if a hospitals improves more than the current median improvement in the base year. Maximum reduction is 1 % of total inpatient revenue

New Improvement List for FY2016 PPC Number PPC DESCRIPTION Number of Complications Number of Hospitals with PPC COST per PPC Total PPC Cost 24 Renal Failure without Dialysis 3150 46 $9,602 $30,246,300 5 Pneumonia & Other Lung Infections 1082 $20,455 $22,132,310 35 Septicemia & Severe Infections 919 43 $22,175 $20,378,825 9 Shock 904 44 $20,538 $18,566,352 6 Aspiration Pneumonia 704 45 $14,121 $9,941,184 16 Venous Thrombosis 544 41 $17,760 $9,661,440 48 Other Complications of Medical Care 392 42 $19,703 $7,723,576 52 Inflammation & Other Complications of Devices, Implants or Grafts Except Vascular Infection 581 $12,516 $7,271,796 37 Post-Operative Infection & Deep Wound Disruption Without Procedure 467 40 $15,520 $7,247,840 7 Pulmonary Embolism 431 $16,203 $6,983,493 54 Infections due to Central Venous Catheters 150 32 $38,685 $5,802,750 31 Decubitus Ulcer 157 33 $35,691 $5,603,487 Accidental Puncture/Laceration During Invasive Procedure 772 $6,621 $5,111,412 49 Iatrogenic Pneumothrax 207 38 $7,341 $1,519,587 Post-Operative Wound Infection & Deep Wound Disruption with Procedure 60 25 $13,003 $715,165 28 In-Hospital Trauma and Fractures 100 34 $7,199 $691,104 66 Catheter-Related Urinary Tract Infection 91 26 $5,671 $487,706 Source: HSCRC Casemix Data FY 2013

HSCRC Progressively Increased the Revenue at Risk State Fiscal Year MHACs QBR FY 11 0.5% FY 12 1% FY 13 2% FY 14 FY15 2% +1 % (improvement) FY16 2% +1%

Continuous Improvement and evaluation QBR: incorporates new measures and increase their contribution to the overall score HCAHPS, Mortality, Patient Safety Indicators MHAC: more aggressive benchmarks and evaluation of PPC selection to the program Coding audits and POA screens

Readmissions:Episode-Based Payment ARR Bundling approach All-cause , All DRG (same hospital) Risk adjustment using APR-DRGs Savings to payers “off the top” Admission-Readmission Program (ARR) All-Cause 30-Day Readmissions and Admissions All Payer Most Hospitals other than TPR Implemented in FY2012

Episode Development Maryland establish an episode-based payment that covers both the initial admission and any subsequent re-admission HSCRC establishes an expanded Episode Bundle Previously….. Expanded Time Frame 30 day “window” Acute Hospitalization Readmission 1 Readmission 2 Establish a “30 day DRG Episode” payment amount or “weight” that covers both the initial admission and ALL subsequent re-admissions within 30 days DRG pmt DRG pmt DRG pmt $10,000 $9,000 $6,000 Each paid separately under DRG system = Additional payment for readmissions Broader “Scope” – multiple hospitalizations

Readmission Shared-Savings FY 2014 Rate Adjustment to achieve 0.3% savings from inpatient revenues Based on Case-mix Risk-Adjusted 30-Day Readmission Rates FY 2015: Planned readmissions are excluded Possible Changes for FY 2016 Incorporation of across hospital readmissions Changing the measurement methodology to align with CMS

Maryland’s All Payer Model Maryland’s Goals An all payer system that is accountable for the total cost of care on a per capita basis is an effective model for establishing policies and incentives to drive system progress toward achieving the three part aim of enhanced patient experience (including quality and satisfaction), better population health, and lower costs. Maryland’s All Payer Model Enhance Patient Experience Better Population Health Lower Total Cost of Care

New Waiver and Performance-Based Payment 30% Reductions in Hospital-Acquired Conditions Readmission Target to Achieve National Rate Potentially Avoidable Utilization Other Population Health Metrics

Stake Holder Engagement Work Groups

Performance Measurement Develop State-wide Targets and Hospital Performance Measurement Potential changes to MHAC, QBR and Readmission Shared Savings Program Measuring potentially avoidable utilization, readmissions, hospital acquired conditions, ambulatory sensitive conditions Integration of cost, quality and population health and outcomes