1. Collaborative on Reducing Readmissions in Florida Health Reform and Readmissions Coaching Call #5 July 14, 2010 2:00 – 3:00 pm EDT

2. Today’s Call Why readmissions? Health reform legislation and the components addressing readmissions

3. Why Focus on Readmissions? A patient readmitted soon after a hospitalization reflects a failure to return that individual to health ▫Poor transitions in care ▫Lack of patient & caregiver understanding ▫Inefficiencies in the system ▫Ineffective or lack of communication ▫Poor quality of care

4. Why Focus on Readmissions? Readmissions are costly ▫Estimated $15 billion in Medicare costs per year ▫Florida data shows  CHF- $278.7 million  AMI - $59 million  Pneumonia - $130.2 million  CABG - $60.7 million  Hip replacement - $74.2 million

5. Florida PPR vs. CMS Florida HealthFinderHospitalCompare Types of readmissions3M Potentially Preventable Readmissions (PPR) Risk Standardized Readmission Rate (RSSR) Days15 days30 days ReasonsRelated to the same or related to original admission Readmission for any reason Payer/patientAll payer categories (Ages 18+)FFS Medicare, Age 65 and older who have a complete claims history for 12 months Time period12 months3 years Adjustments3M APR DRG and Severity of Illness Subclass Hierarchical Regression Model Can hospitals reproduce?YesNo Terms usedLower/higher/As ExpectedBetter than, no different, worse BenchmarkFlorida statewide readmission rateFlorida vs. US National Rate Minimum number of cases 3025 Conditions/Procedures70 conditions and proceduresHeart attack, heart failure, pneumonia 5

6. Patient Protection and Affordable Care Act of 2010 Delivery system reforms ▫Value based purchasing ▫Bundled payments ▫Accountable Care Organizations Payer initiatives ▫Health plans ▫Medicaid Public reporting

7. The Tie Between Quality and Reimbursement Kathy Reep July 14, 2010

8. Requirements Under Health Care Reform Continued pay-for-reporting Value-based purchasing –Includes HCAPHS Hospital-acquired conditions Readmission measures risk adjustment

9. Value-Based Purchasing Requirement of ACA for acute care IPPS hospitals Budget neutral Implementation starting in FY2012 –FY2012 data collection and reporting –One percent pool in FY2013; 1.25% in FY2014; 1.5% in FY2015; 1.75% in FY2016; 2% in FY2017 and thereafter

10. Value-Based Purchasing Limited to RHQDAPU measures for FY2013 Starting in FY2014 Secretary has authority to expand the measures –Expansion must include efficiency measures (i.e. Medicare spending per beneficiary) –Cannot include readmissions measure

11. Value-Based Purchasing Initial proposal called for scoring to be based on the data reported by hospitals in three quality domains – –Clinical process of care –Patients’ perspectives of care (HCAPHS) –Outcomes (mortality) measures

12. Value-Based Purchasing Process indicators –Each indicator score is converted into a new score between 0 and 10 –The new score is determined to be the higher of two measures: attainment or improvement HCAPHS –Score between 0 and 20 for achieving minimum performance across all indicators If all eight indicator scores are above their respective 50 th percentile, the hospital receives full 20 points Otherwise, minimum performance score based on the indicator with the lowest percentile score and points awarded based on how close that percentile rank is to the median

13. Value-Based Purchasing Scores will be calculated at the start of each payment year Baseline and measurement period will be April 1 through March 31 –FY2013 = October 1, 2012-September 30, 2013 –Baseline period for FY2013 is April 2010-March 2011 –Measurement period for FY2013 is April 2011-March 2012

17. Hospital-Acquired Conditions All claims involving inpatient admission to general acute care hospitals are subject to POA collection POA indicator is based not only on the conditions known at the time of admission, but also include those conditions that were clearly present but not diagnosed until after the admission took place

18. Hospital-Acquired Conditions Public reporting of HAC rates begins in FY2012 HAC payment penalties effective in FY2015 –Hospitals in the worst quartile of risk-adjusted HAC rates will be subject to a 1.0 percent payment penalty Penalty in addition to current payment adjustment at DRG level

20. Readmissions Current focus areas –Heart failure patients (HF) –Heart attack patients (AMI) –Pneumonia patients (PN) –List expanded in FY2015 What hospitals are included? –All acute care PPS hospitals –CAHs are exempt –Hospital must have 25 discharges within a disease category over the three-year reporting period (Hospital Compare)

21. Readmissions Includes –Medicare fee-for-service patients, at least 65 years of age, with a principal diagnosis of AMI, HF, or PN –12 full months of enrollment in Parts A and B prior to the index admission –Medicare Part A at the time of the index admission –One full month of enrollment in Parts A and B post- discharge (fee-for-service)

22. Readmissions Excludes –Incomplete Medicare enrollment data –Under age 65 –Length of stay greater than one year –Discharged against medical advice –In-hospital deaths –Transfers out –Same day readmissions for the same condition to the same hospital

23. Readmissions Key Terms –Index Admission: The first admission for a patient within a specific time period. Readmission clock starts counting at day of discharge. –Readmission: An admission to any acute care hospitals, for any acute care reason, that occurs within 30 days of a previous discharge.

24. Readmissions An admission can only be categorized once; it is either an index admission or a potential readmission If a patient has multiple readmissions within a 30- day window, only one readmission is counted

25. IndexReadmission Jan 1 Jan 15Jan 25 Feb 10 transfer Does not count Index Example Discharged: Admitted:

26. Readmissions RSRR – Risk Standardized Readmission Rate (Predicted Rate/Expected Rate) x National Unadjusted Rate Predicted rate – the number of readmissions within 30 days predicted on the basis of the hospital’s performance with its observed case mix Expected rate – the number of readmissions expected on the basis of the nation’s performance (US average) with that hospital’s case mix

27. Readmissions P/E less than 1 = P/E greater than 1 =

28. Readmissions Beginning in FY2013, hospitals with higher than expected risk-adjusted readmissions rates for 30-days post-discharge will receive reduced Medicare payments for every discharge (readmissions rate based on prior year’s data) Maximum payment reduction for individual facilities: 1.0% in FY2013, increasing to 3.0% in FY2015 and thereafter The Secretary is mandated to establish a quality improvement program for hospitals with high severity- adjusted readmissions rates to be carried out in conjunction with Patient Safety Organizations

29. Estimating Payment Impact If proxy P/E > 1 for a disease category 1) Calculate total payments for excess readmissions = (P/E ratio multiplied by DRG payments for that condition) – 1 2) Calculate readmission adjustment factor 1 – (total excess payments) (for all conditions covered by policy) total payments (all discharges) 3) Apply the higher of the readmission adjustment factor or the specified cap to all Medicare payments =

30. Impact Analysis

31. Questions?? kathyr@fha.og

32. Community-based Care Transitions Program Beginning 2011, 5 year program Available to PPS hospitals identified as having high readmission rates Hospitals serving medically underserved populations, small community and rural hospitals, & hospitals in an eligible Administration on Aging program will be given priority Must engage in at least one evidence-based care transition intervention targeting Medicare patients at high risk for readmission $500 million in funding

33. Independence At Home Demonstration Program January 1, 2012 Targets physician and nurse practitioner-directed home- based primary care teams Accountable for providing comprehensive, coordinated and continuous care to high-need populations at home Focus ▫Reducing preventable admissions ▫Preventing hospital readmissions ▫Reducing ED visits ▫Improving outcomes commensurate with stage of chronic illness ▫Reducing cost of services and ▫Improving patient and caregiver satisfaction

34. National Pilot Program on Payment Bundling Begins in 2013 – 5 year program Voluntary Focus is to improve coordination, quality and efficiency of health care delivery ▫3 days prior to hospital stay ▫30 days after hospital discharge Groups of providers Waiver of statutory provisions Patient assessment instrument to determine best site of care Development of episode of care quality measures

35. National Pilot Program on Payment Bundling Conditions to be selected ▫Mix of chronic and acute ▫Mix of surgical and medical ▫Conditions for which there is evidence of opportunity to improve  Care while reducing expenditures  Conditions with significant variation in readmissions & post-acute care spending  Conditions with high volume or high post-acute care spending and  Conditions deemed most amenable to bundling across a spectrum of care

36. Episode of Care Quality Measures Functional status improvement Rates of avoidable readmissions Rates of discharge to the community Rates of admission to an emergency room after a hospitalization Incidence of healthcare-acquired infections Efficiency measures Measures of patient centeredness of care Measures of patient perception of care and Other measures (such as patient outcomes)

37. Accountable Care Organizations Begins January 1, 2012 Voluntary Estimated savings - $4.9 billion over 10 years Allows groups of qualifying providers to form Accountable Care Organizations and share in cost savings achieved for the Medicare program

38. ACO Requirements Accountable for the overall care of their Medicare FFS beneficiaries 3 year commitment Formal legal structure to receive and distribute bonuses Provide info to providers in the ACO Management and leadership structure Processes to promote evidence-based medicine and patient engagement, report on quality and cost measures and coordinate care Meet patient centeredness criteria

39. ACO Reporting Measures Clinical processes and outcomes Patient and care giver perspectives on care Utilization and costs

40. Health Plan Initiatives Increased focus on health plan accountability for “health” Health plans must begin reporting on: ▫Initiatives to improve outcomes such as quality reporting, case management, care coordination and disease management ▫Initiatives to prevent readmissions  Comprehensive program for hospital discharge planning  Post-discharge reinforcement by an appropriate health care professional ▫Initiatives to improve patient safety and reduce medical errors ▫Initiatives on wellness and health promotion

41. Medicaid-related Initiatives Medicaid demonstration on bundled payment ▫8 states by January 1, 2012 ▫Episodes of care that include hospitalization and concurrent physician services Medicaid global payment system demonstration project ▫5 states beginning October 1, 2010 to Sept 30, 2012 Pediatric ACO demonstration project Health homes for Medicaid enrollees with chronic conditions

42. Reporting of Readmission Data Requires Secretary to calculate and report all- payer readmission rates for conditions selected for readmissions finanicial penalties program Development of ▫10 acute/chronic outcome measures ▫10 primary/preventive outcome measures ▫Update provider level outcome measures ▫Select efficiency measures ▫Overall strategic framework for public reporting

43. What is YOUR Hospital Doing to Get Ready? Work on reducing readmissions Bundled payments ACOs Other

44. Closing Reminders Data reports Webinar on Project BOOST – July 26, 1-2:15 pm EDT To register: http://events.SignUp4.com/ReadmissionsProjectBOOST http://events.SignUp4.com/ReadmissionsProjectBOOST AHA Webinar on Mental Health Readmission – August 6, 1:00 pm EDT To register: http://www.surveymonkey.com/s/285P9V7http://www.surveymonkey.com/s/285P9V7 Next Readmissions Collaborative coaching call – August 11, 2-3 pm EDT Replay of today’s call will be available within 24 hours, and will be e-mailed to Collaborative members.

45. Contact Information Web site: http://collab.fha.org/index.php Staff: Kim Streit, kims@fha.org 407-841-6230kims@fha.org Luanne MacNeill, luannem@fha.org 407-841-6230luannem@fha.org Bruce Spurlock, MD, Convergence Health Consulting, bspurlock@convergencehealth.net 916- 772-6090bspurlock@convergencehealth.net THANK YOU!!