Payment for Healthcare Alignment with Safety, Appropriateness, and Quality Accountable Payment Model Subgroup Bree Collaborative Meeting July 18, 2013

Goals for Today’s Presentation 1.Summarize findings from the public comment period for the draft warranty on total knee and total hip replacement (TKR and THR) procedures 2.Adoption of the revised warranty by the Bree Collaborative 3.Provide update on standards for appropriateness, a bundled payment model, and measures of quality 2

Four Deliverables Standards for appropriateness Surgical bundleWarranty Measurements of quality 3

1. A Warranty for TKR and THR Aligning payment with safety 4

Overview of Public Comment Process APM subgroup developed an online survey Posted survey announcement and link on the Bree Collaborative website Local community partners and national groups promoted the survey through their networks Complete list in the posted summary document Survey was open for 2 weeks (6/19-7/3) Modified on 6/20 to allow respondents to provide only general feedback due to clinical/technical nature of many of the warranty definitions 5

Profile of Respondents 6 62 people started the survey 46 people completed it

Key Findings from Public Comments Broad support for diagnostic codes (91%), procedure codes (96%), and age limits (84%) Support for complications ranged from 35% (acute myocardial infarction) to 67% (surgical site bleeding) 57% agree with the warranty periods in the first 90 days 42% agree with the 10-year implant warranty 53% agree with the term that holds the hospital performing the TKR/THR surgery accountable for treatment received for complications at another hospital of outpatient facility Note: Sample sizes for all of these percentages are included in the posted summary document 7

Recurring Themes from Public Comments 8 Warranty limits access to TKR/THR for patients that are at an increased risk of any of these complications “This will change the face of orthopaedics forever and limit access to those who need it the most... the elderly, the poor, those who have medical comorbidities.” Workgroup response: Patients that are at an increased risk of complications are not always appropriate candidates for surgery Adhering to appropriateness criteria helps ensure that patients have a safe procedure and smooth recovery

Recurring Themes from Public Comments 9 Complications are unavoidable, so providers shouldn’t be punished for them “Including events that occur even in the best case of care creates unfair burdens on hospitals and physicians.” Workgroup response: Baseline complication rates reflect current care practices – the benchmark should be zero We want to get to the point where it’s not dangerous to go to the hospital

Recurring Themes from Public Comments 10 Complications often result from patient factors/behaviors that providers cannot control “[The warranty] makes a flawed assumption that all risks and complications are controlled on the provider side when patients make unhealthy choices in life which we can not mitigate.” Workgroup response: Patient factors can be addressed through comprehensive pre-operative screening, patient education, identification of a care partner, and other components of the bundle

Recurring Themes from Public Comments 11 Implant manufacturers should be responsible for design/manufacturing defects, not providers “I wonder about holding the hospitals responsible for defects in prostheses. Is there any way to get the manufacturers to accept responsibility for their devices?” Workgroup response: Hospitals and providers should only purchase/use implants that have a low failure rate. Manufactures should also be held responsible. This provision is difficult to administer.

Recurring Themes from Public Comments 12 Implementing the warranty is very difficult (e.g. attributing complications to the TKR/THR procedure) “It sounds like an administrative nightmare for hospitals, providers and whomever is providing oversight for the program.” Workgroup response: The CMS Technical Expert Panel (TEP) defined code sets approved by orthopedic content experts, suggesting that they are feasible to administer Recognize the difficulty of administering a 10-year warranty for implant

Changes Made in Response to Public Comments Death is only included as a complication in the warranty if it is attributable to any of the other complications in the warranty Clarify when death is included in the warranty Including the code sets that the TEP used to define all of the complications in the warranty as an appendix Clarify definitions for all complications Instead of including a 10-year implant warranty, quality criteria for the implant will be added to the bundle Remove the 10- year implant warranty 13

Other Efforts to Aid Implementation To account for price variability across hospitals, the subgroup recommends applying a fixed amount equal to the allowable amount for treating that complication using Medicare fee schedule An alternative option is, to create two categories of amounts: a set amount for a readmission without surgery and twice that when surgery is needed Researching appropriate penalties for care received at a second hospital Establishing third party groups that could help mediate disputes between health plans and providers; these groups could resolve such issues about whether treatment was for a condition attributable to the TKR/THR procedure Researching options for dispute resolution 14

Content of Warranty Adults with TKR and THR surgery Periods of accountability are complication-specific 7 days a. Acute myocardial infarction (heart attack) b. Pneumonia c. Sepsis (serious infection that has spread to bloodstream) 30 days a. Death b. Surgical site bleeding c. Wound infection d. Pulmonary embolism 90 days a. Mechanical complications related to surgical procedure b. Periprosthetic joint infection (infected implanted joint) Hospital/provider group performing surgery should be accountable for payment for care of complications treated in another facility according to single transparent market standard based on CMS fee schedule 15

Proposal to Adopt Draft Warranty The APM subgroup proposes that the Bree Collaborative adopt the revised Total Knee and Total Hip Replacement (TKR and THR) Warranty. Note: The APM subgroup is planning to wait until all four components of the TKR/THR bundle are completed before submitting a report to the Health Care Authority. 16

Outreach & Communication Plan In process To educate community about the warranty and other components of bundle Partner with stakeholders: WSHA, WSMA, employers such as Seattle Chamber of Commerce, other employer groups 17

The following slides contain information on the other parts of the bundle; there’s no new substantive developments to report to the Bree 18

2. Standards for appropriateness Avoiding unnecessary surgery 19

Evidence appraisal is complete for both sections of the standards for appropriateness: 1. Disability: reduced function and pain due to osteoarthritis despite conservative therapy 2. Fitness for surgery: physical preparation and patient engagement No action needed from the Bree at this time Standards for appropriateness Surgical bundleWarranty Measurement of quality 20

3. Surgical Bundle Transparent components of quality 21

Evidence appraisal for both parts of the bundle (Surgical Repair and Return to Function) is almost complete Expect to present a draft bundle to the Bree Collaborative at the September meeting No action needed from the Bree at this time Standards for appropriateness Surgical bundleWarranty Measurement of quality 22

Progress with Deliverables Direction from the PAR WorkgroupProgress of the APM Workgroup Recommend episodes of focusCompleted – Selected total hip and knee replacement surgeries. Recommend warranty definitionCompleted – Presented at today’s meeting. Recommend bundleIn progress – Evidence appraisal of draft content is almost done. Recommend payment process Prospective vs. retrospective Unbundling guidelines In progress – Have started to develop provisions related to accountability for complications. Recommend implementation timelineCompleted – Recommend implementation by 1/1/2014. Define quality outcome measuresIn progress – See next slides. 23

4. Measurement of Quality The guide to purchasing 24

Group has discussed 5 broad categories of measures: 1. Patient satisfaction 2. Evidence-based care 3. Functional improvement (Pre- and post-operation) 4. Avoiding readmissions 5. Others, such as time to return to function Warranty Standards for appropriateness Surgical bundle Measurement of quality 25

Progress made with several measures: 1. Endorse HOOS/KOOS as the preferred method for assessing disability, including pain 2. Agree NIH’s quality of life tool, PROMIS-10, is a promising tool 3. Agree HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems) Survey is a good tool for measuring patient experience No action needed from the Bree at this time Standard for appropriateness Surgical bundleWarranty Measurement of quality 26