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Leading Age Maryland Annual Conference 2015 Maryland Healthcare and Aging Services Intersections Workshop Session F Wednesday, April 22, 2015 2:45 – 3:45.

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Presentation on theme: "Leading Age Maryland Annual Conference 2015 Maryland Healthcare and Aging Services Intersections Workshop Session F Wednesday, April 22, 2015 2:45 – 3:45."— Presentation transcript:

1 Leading Age Maryland Annual Conference 2015 Maryland Healthcare and Aging Services Intersections Workshop Session F Wednesday, April 22, 2015 2:45 – 3:45 p.m. Rick Grindrod, CEO National Post-Acute Healthcare NPH 1

2 Maryland Hospital Medicare Waiver History Maryland is the only state to have a waiver from the Medicare hospital PPS payment rules. Hospital rates are regulated by State “All-Payer” System since 1977 Waiver test to keep Medicare spending less that the nation Test included Inpatient, Medicare cost per hospital stay NPH 2

3 Erosion of the Former Medicare Waiver 3

4 New Medicare Waiver Agreement The State’s proposed new waiver demonstration model was approved January 10 th with an effective date January 1, 2014 (base period CY 2013). The waiver is for a 5-year term. All payer test will be tied to growth in per capita gross state product (target set to 3.58%). Cost includes inpatient and outpatient hospital costs Cost of all payers, not just Medicare Per capita cost of care is measured for Maryland residents, regardless of state of service. NPH 4

5 Termination and Corrective Action Triggers The Medicare per capita total hospital spending target will be set to produce $330 million in Medicare savings over 5 years (target as follows): Year 1: $0 Year 2: $49.5 million Year 3: $132 million Projected savings in Year 2 – 5 = Year 4: $247.5 million0.5% below the national trend. Year 5: $330 million The following events can lead to further review and potentially early termination: Failure to achieve savings, measured against Medicare trend, for two consecutive years. Failure to meet the cumulative target by a total of $100 million or more at any point during the life of the waiver. Annual growth in Medicare per capita total cost of care this is more than 1% greater than the national Medicare total cost of care growth rate. Cost per capita can’t exceed the national trend over a two-year period. A determination or a significant deterioration in the quality of care provided to Medicare, Medicaid or CHIP beneficiaries. NPH 5

6 Quality and Value-Based Metrics 30-day all cause Readmissions Hospital- Acquired Conditions Quality-based Reimbursement Application establishes a readmission target of the national average by the end of year 5. Currently MD is 10% over national average Application specifies cumulative total reduction of 30% over the five years (6.89% per year). Maryland must continue to demonstrate how QBR program meets or exceeds national program. Page 26 of Waiver Agreement - “For each performance year, Maryland will place the same percentage of hospital revenue at risk as the national Medicare quality programs”. 6

7 Maryland Medicare Readmission Performance Maryland Medicare Waiver Agreement establishes target of the national average by the end of the 5 year agreement (CY 2018). 7

8 Population-based Revenue Application calls for Maryland to shift virtually 100% of revenue into population-based payment models. Application sets targets for the end of years two through five. Hospital revenues that are not covered under a population-based payment model will be subject to an aggressive volume governor. HSCRC estimates the State at 95% mid way through Year 1 NPH 8

9 Fee-for-Service Model vs. Global Revenue Budget Fee-for-Service (Volume) Model 2.0% volume governor 50% variable cost factor (assumes that 50% of hospital’s cost structure is fixed) Lower update factor (market basket less 0.7%) Limited funding for growth in case-mix Global Revenue Budget Model (GRB) Initial budget based on historical revenue No change in revenue for changes in volume and case-mix Full update factor (likely something closer to full factor cost inflation) Annual adjustments for changes in age-adjusted population Funding for population health infrastructure Adjustments for changes in market share for “good volume” (non-PAU) at efficient prices (50% adjustment proposed starting 7/1/15). 9

10 Distribution of Potentially Avoidable Utilization NPH 10

11 Potentially Avoidable Utilization (PAU) 30-Day Revisits – Inpatient / Observation / ER (by including IP and OP, HSCRC eliminates differences in patient status). Planned readmissions are excluded. Potentially Preventable Complications (PPCs) – Inpatient cases with complications acquired during inpatient portion of a hospitalization. Uses the existing MHAC logic (Maryland Hospital-acquired Conditions). Prevention Quality Indicators (PQIs) – Used for inpatients to identify quality of care for “Ambulatory Care Sensitive Conditions”. Conditions for which good outpatient care and early intervention can potentially prevent the need for hospitalization. Diagnosis specific based on AHRQ logic. NPH 11

12 Prevention Quality Indicators (PQIs) Ambulatory Sensitive Conditions Cardiac PQIs Heart Failure Hypertension Angina w/o Procedure Infections Bacterial Pneumonia Urinary Tract Infection Asthma/COPD Dehydration Diabetes Long Term complications Lower Extremity Amputation Short Term Complications Uncontrolled Perforated Appendix NPH 12

13 Global Budget/Population Health Initiatives Enhanced Care Management Effective shift of care to lower cost settings Smart, cost effective market share growth Physician alignment Focus on chronic disease management Access to primary care services Partnerships with Post-Acute Providers NPH 13

14 Implications to Post-Acute Providers Build relationship with acute providers Build relationships with other post-acute providers Alternative payment models NPH 14

15 Build Relationships with Acute Providers Data and outcomes not donuts Scorecard that includes 30-day readmission rates, revisit rates, PAU rates Enhance Clinical Capability Quality Improvement and Innovative Programs Manage Transitions of Care Executive level contact EMR, Data mining, HEI NPH 15

16 Build Relationships with other Post-Acute Providers Focus on data and outcomes Develop preferred providers without limiting choice Create networks of high performing providers NPH 16

17 Consider Alternative Payment Models Bundled Payment Program ACO’s Medical Home Advantage Plan NPH 17

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