1. Maryland Hospital Association
Maryland Value-Based Performance Policies What we’ve achieved and where we’re headed
Traci La Valle
Vice President
Maryland Hospital Association
January 27, 2017

2. Today’s Agenda Big picture: Maryland performance
Value-based performance policies
Population health metrics
Population-based measurement

3. The Maryland Demonstration is Designed to Accomplish the Triple Aim
Maryland entered into a five-year contract with CMS to implement the Maryland All-Payer Model, a demonstration under Section 1115A of the Social Security Act, intended to test how global budgets could be used to achieve The Triple Aim
Better Care
Lower Costs
Better Health
The Triple Aim:
Improve the experience of care for patients
Improve the health of whole populations
Reduce the per capita cost of health care

4. Durable medical equipment
How It Works
Providing fixed, predictable revenues gives hospitals flexibility to invest in care and health improvement activities such as:
Coordinating care with other health care providers
Reducing complications
Reducing readmissions
In turn, these activities reduce avoidable utilization, which improves value and affordability
Physicians
Outpatient clinics
Nursing homes
Medications
Home health
Under the demonstration, Maryland’s hospitals are accountable for driving down health care costs, no matter where or how the care is delivered
Durable medical equipment

5. Financial and Quality Performance
As a result of the demonstration, Maryland’s hospitals have saved Medicare over $400 million, more than 3 times the amount that was required by this point in time

6. Reducing Medicare Costs
For the rest of the country, Medicare costs per beneficiary are increasing, while in Maryland these costs are decreasing
Average Medicare Costs Per-Beneficiary-Per-Year
2013
2016
Change
Maryland
$10,548
$10,471
-0.7%
Nation
$9,280
$9,305
0.3%
Source: Maryland figures are calculated from 100 percent Medicare Parts A and B claims data. National figures calculated from 5 percent sample file of Medicare claims

7. Bending the Cost Curve for Medicare
Medicare Spending per Beneficiary by Provider Type
June 2015 to June 2016 Percent Change
Maryland
Nation
Dollar Impact of Savings (Millions)
Hospital Spending
Inpatient
-2.57%
0.50%
(52.0)
Outpatient
3.36%
5.35%
(13.9)
Total Hospital Spending
-0.69%
1.96%
($65.9)
Non-Hospital Spending
SNF
-6.12%
-5.10%
(3.4)
Home health
2.80%
-0.64%
4.9
Hospice
8.73%
2.16%
5.7
Outpatient Clinic & Other
0.08%
1.11%
(0.6)
Physician Professional Claims
4.11%
1.83%
24.5
Total Non-Hospital Spending
2.17%
0.40%
$31.1
Total
0.60%
1.16%
($34.8)
The demonstration drives a decrease in Medicare spending, in part by incentivizing a shift in utilization to lower-cost settings of care

8. Monthly Case-Mix Adjusted Readmission Rates
Note: Based on final data for January 2012 – June 2016, and preliminary data through October 2016.

9. Maryland is reducing readmission rate but only slightly faster than the nation

10. All-Payer Case-Mix Adjusted PPC Rates CYTD 2013 - CYTD 2016
Medicare FFS
CY13 YTD Through Sep
1.29
1.50
CY14 YTD Through Sep
0.96
1.06
CY15 YTD Through Sep
0.87
0.99
CY16 YTD Through Sep
0.69
0.76
CY16 over CY13 % Change (YTD through Sep)
-46.45%
-49.31%

11. Value-Based Performance Policies
All-payer demonstration contract requirements
HSCRC payment policies
Exemptions from national value-based payment policies

12. Value-Based Performance Policies
All-payer demonstration contract language applies to readmissions and complications
…the state [must] demonstrate that it is implementing a program for regulated Maryland hospitals and, as applicable, other hospitals in Maryland that achieves or surpasses the [national] measured results in terms of patient outcomes and cost savings…
The state must ensure that the aggregate percentage of regulated revenue at risk for quality programs…is equal to or greater than the aggregate…at risk under national Medicare quality programs.
Value Based Purchasing exemption is an annual process
and follows similar guidelines

13. Updates to HSCRC Value-Based Payment Policies

14. ICD-10 Transition
In CY 2017 performance year, the base and performance periods are coded in ICD-10. The preference is to use grouper version 34

15. Updates to HSCRC Policies
QBR
Revenue neutral scaling eliminated. Pre-set scale similar to MHAC policy
FY 2018 pre-set scale to be based on performance year 2016 results
FY 2019 pre-set scale to be determined by commissioners
Continued emphasis on HCAHPS
MHAC
Proposal to remove palliative care exclusion—studying further
Update thresholds and benchmarks; CY17 performance compared to October 2015 – September 2016 base period; Grouper version 34
No state improvement target; single payment scale

16. Updates to HSCRC Policies
Readmissions
No significant changes to policy have been discussed
Delay in setting attainment and improvement targets due to ICD-10 anomalies
Policy Year
Improvement Target
FY 2016
6.36%
FY 2017
9.3%
FY 2018
9.5%
FY 2019 ??

17. QBR and MHAC Scoring
Earn between 0-10 points on each metric, which rolls up to a final score between 0-1
Better of attainment and improvement
Threshold – average performance and minimum performance required to begin earning points
Benchmark – top (decile) performance for which maximum points are earned
Final score of 0 = on every metric the hospital performed worse than average; 1 = hospital at top performance on every metric

18. Setting QBR and MHAC Payment Scales
Three anchor points
Maximum reward – best score, best possible score, or some other high point (e.g., 0.8)
Maximum penalty – lowest score or lowest possible score
“Break point” – where rewards begin and penalties end; average score from a current or prior period. This is a value judgment and an indication of expectations

19. Setting the QBR Payment Scale
FY 2018 will have a distribution similar to the scale on right—max penalty at lowest score, max reward at highest score and break point at average score
FY 2019 commissioners will set the three anchor points—high, low and break even

20. Modeling of QBR Scaling Options
Which scores should be used for maximum rewards and penalties ?
Which score should be used as cut point to turn from penalty to reward zones ?
80% represents realistic max possible score
Rewards can be increased in commensurate with higher points
Increase the maximum reward from 1% to 2% inpatient revenue
RY 19 Scaling Options
Min
Cut Point
Max
Statewide Penalties
Statewide Rewards
Final Scores (max reward 1%) 7%
37%
57%
-$20M
+11M
Full Scale Options Max Reward 2%
Full Score Range 0%
50%
100%
-49M
+1M
Option 1
40%
80%
-24M
+7M
Option 2
45%
-37M
+3M
Note: Modeling based on RY17 Final Scores

21. MHAC Scaling Options

22. Exemptions from Medicare Value-Based Programs
Hospital Acquired Conditions and Readmissions exemptions are part of the all-payer demonstration…as long as we have a program of similar scope and risk compared to the nation, and are meeting annual performance targets
VBP exemption is an annual process where CMS reviews Maryland’s annual performance and the HSCRC policy
Maryland programs measure performance across all payers and adjust all-payer revenue
Uniformity in performance metrics across all payers
Harder to compare Maryland performance to nation when Maryland is focused on different metrics

23. Maryland QBR Compared to CMS VBP
Domain
Measure
Data Type
Weight
Safety
CAUTI
NHSN
All-payer
Medicare only
20%
HSCRC All-payer
35%
CLABSI
SSI – colon
SSI – hysterectomy
C.difficile
MRSA
PC-01
PSI-90
PSI-90 (suspended)
Patient Experience
HCAHPS
Required reporting through independent vendor All-payer
25%
50%
Outcome*
Outcome
30-day mortality, 3 conditions: AMI, heart failure, pneumonia
CMS data Medicare only
All-cause mortality
HSCRC data All-payer
15%
Efficiency
Medicare spending per 30 day episode
CMS data
*Starting in FY2019, CMS will include two new metrics that measure complication rates up to 90 days following elective primary total hip arthroplasty and/or total knee arthroplasty. Maryland is not able to calculate all-payer complication rates that extend beyond the hospital stay.

24. Maryland MHAC Compared to CMS HAC
Number of measures
6 (PSI-90, CLABSI, CAUTI, Surgical Site Infections, MRSA, and C. Difficile infection)
58 Potentially Preventable Complications (7 of the original 65 have been removed due to clinical concerns)
Data source
Medicare claims and chart-abstracted surveillance data
All-payer HSCRC case-mix data
Scoring
Attainment compared to hospitals nationally.
Better of attainment and improvement relative to statewide benchmarks
Incentives to individual hospitals
1% decrease in Medicare payments for lowest performing 25% of hospitals nationally
In years when state meets its collective HAC reduction goal (RY 17)
Maximum reward: 1% increase of permanent inpatient revenue
Maximum penalty: 1% reduction in permanent inpatient revenue
In years when state fails to meet its collective HAC reduction goal:
Maximum penalty: 3% reduction of permanent inpatient revenue

25. Population Health Metrics and Measurement

26. Population Health Planning
CMMI
Maryland must include population health metrics as part of Care Redesign amendment to All-Payer Demonstration model and
All-Payer Demonstration Progression Plan
DHMH’s Office of Population Health Improvement
Developed a broad-reaching strategic thought framework and process to address individual risk factors contributing to poor health, including social determinants of health. The final document, Maryland Population Health Improvement Plan: Planning for Population Health Improvement will be posted at 
Developing a framework to identify priorities, data sources, potential metrics and accountability mechanisms that will eventually lead to inclusion of metrics in HSCRC value-based payment policies

27. Draft Population Health Timeline
Due Date
Description
June 30, 2017
State submits a Population Health Plan to CMS.
August 31, 2017
CMS target date to send comments on the submitted Population Health Plan to the State (requested within 60 calendar days of receiving the State’s Population Health Plan). State works with CMS to incorporate CMS comments in the Population Health Plan.
January 1, 2018
State submits to CMS the Value Based Payment Plan (“VBP Plan”).
July 1, 2018
State begins tracking proposed value-based program measures for each hospital.
March 31, 2019
Based on the State’s testing, the State submits any modifications to the VBP Plan to CMS for review and comment.
May 31, 2019
CMS target date to send comments on the submitted VBP Plan to the State (requested within 60 calendar days of receiving the State’s VBP Plan). State works with CMS to incorporate CMS comments and modifications in the VBP Plan.
July 1, 2019
State incorporates the VBP Plan Measures into its payment methodologies.

28. MHA’s Recommendations to DHMH
Hold providers accountable only for outcomes they can control
Focus on risk factors that can be influenced by clinical interventions, e.g., diabetes and hypertension control
Involve other sectors such as schools, local health departments, public policy for behavioral risk factors such as smoking prevalence and obesity
Public and private entities address shared goals with interventions and accountability appropriate to their sphere of influence in a “layered approach”
We support a balanced population health scorecard that includes metrics related to public health as well as those that are within the scope of medical care. To achieve a balanced scorecard, the plan should focus accountability for broad behavioral-based measures – such as obesity and smoking prevalence – on public health agencies, regulatory bodies, government programs, and similar entities. Health care providers, such as hospitals and the statewide health system would be accountable for measures that more directly assess chronic disease management. Hospitals and their partners are better positioned to manage chronic conditions through preventive services than to help people avert them in the first place. Process and outcome measures should align with the efforts Maryland’s hospitals are already making to manage population health. Hospitals are addressing obesity and smoking cessation primarily through their employee wellness plans. The same types of layered measures and accountability can be developed for state and local government entities.
The degree of accountability should vary for different measures, depending on the ability of health care providers and other stakeholders to effectively intervene. While hospitals can manage population health, they are not well equipped to address population-level risk factors due to the difficulty of changing individual behavior on a large scale. Smoking is an individual health behavior, and behaviors such as diet and exercise are major factors for obesity. Studies show that these types of behaviors are very difficult for health professionals to address, and that successfully modifying them is a long-term, ongoing process. Even with major investments, widespread improvement in individual behavior would take a significant amount of time and not be guaranteed.

29. MHA’s Recommendations to DHMH
Include behavioral health and access to care
Emergency Department visits for behavioral health conditions have increased over the last three years while ED use for all other conditions has declined
While Maryland has one of the lowest rates of uninsured, access to a regular source of primary care is critical to managing chronic health conditions

30. Example: Layered Measurement Approach and Varying Accountability in Public Policy and Health Care

31. Population-based Measurement
Several policies under development involve measuring individual hospitals’ impact on a population. Different methods of attributing individuals and costs may be used depending on the policy goal
Total cost of care (TCOC) monitoring, e.g., as one of the annual update conditions (HSCRC’s zip code approach)
TCOC guardrail, e.g., care redesign activities that include access to detailed Medicare data require a TCOC guardrail (approach not yet defined)
HSCRC “geographic model” an extension of GBR to include non-hospital costs
Payment policy related to efficiency, e.g., value-based policy, eligibility for capital funds
Attribute some or all Medicare beneficiaries
Consider combination of different approaches, including beneficiary level attribution, geographic attribution

32. Population-based Measurement
Total cost of care
Assigns or attributes most or all beneficiaries to hospitals
Account for a significant portion of total Medicare costs
Inherent differences in population’s disease prevalence and community resources could be addressed by
Comparing trend in spending per beneficiary
Risk adjustment
Beneficiary level analysis is important to understand patterns of use to inform this approach and to identify potential issues that need to be addressed in a geographic approach
However, for some beneficiaries, it may not be clear which hospital has the lead on managing their care and a geographic model or shared accountability may be needed

33. Population-based Measurement
Criteria to assign beneficiaries could include
Plurality of hospital care
Total charges
Types of service, e.g., inpatient admissions, observation, clinic and ED visits are more likely than diagnostic imaging services to indicate the hospital that is managing care
Beneficiary residence
Physician E & M visits and physician referral patterns
Combination of factors
In most cases, the hospital with the plurality of visits is also the hospital with the highest charges, and it appears that a high percentage of beneficiaries who use hospital services are clearly linked to a single hospital or system

34. Other Areas Still to be Explored
Non-hospital utilization
Post-acute care following a hospital discharge
Patterns of use and potential linkages to hospital for hospice and home health
Non-hospital Part B utilization among high utilizers of hospital care
Beneficiaries with little utilization
Non-hospital Part B utilization only
No utilization
Stability of patterns over time
Comparison to ACO attribution

35. Traci La Valle is a Vice President at the Maryland Hospital Association where she advocates for Maryland's hospitals, health systems, communities, and patients primarily before state regulatory bodies. In her role, she works to ensure fair and reasonable hospital payment policies that provide appropriate incentives to improve quality and reduce avoidable costs. In her years at MHA, she has held progressively responsible roles covering a range of issues that affect Maryland hospital finances. Traci has a Master of Public Health and a Certificate in Health Finance and Management from Johns Hopkins School of Public Health, and a Bachelor of Science in Physical Therapy from Temple University. Traci La Valle Maryland Hospital Association 6820 Deerpath Road Elkridge, MD

36. Maryland Hospital Association
Maryland Value-Based Performance Policies What we’ve achieved and where we’re headed
Traci La Valle
Vice President
Maryland Hospital Association
January 27, 2017