aco alternatives: payment bundling, based care and...

Presenting a live 90‐minute webinar with interactive Q&A

ACO Alternatives: Payment Bundling, ACO Alternatives: Payment Bundling, Community‐Based Care and MoreLegal Challenges in Evaluating and Implementing Alternative Value‐Based Models

T d ’ f l f

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

TUESDAY, SEPTEMBER 20, 2011

Today’s faculty features:

Robert L. Roth, Partner, Hooper Lundy & Bookman, Washington, D.C.

Lloyd A. Bookman, Founding Partner, Hooper Lundy & Bookman, Los Angeles

Robert A. Minkin, Senior Vice President, The Camden Group, Los Angeles

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ACO AlternativesACO Alternatives

CLESeptember 20, 2011

Webinar Slide Presentation

Copyright 2011. This presentation as a whole and all of its individual parts are the exclusive property of The Camden Group.

GOALS FOR THIS PROGRAM

Help providers understand why they should be focusing on Medicare reform initiatives beyond ACOs

Explain the operational and legal aspects of several of the new initiatives coming out of the CMS Center for Medicare & Medicaid Innovation including financial risk that programMedicaid Innovation, including financial risk that program participants will have to bear

Explain how these new initiatives are harbingers of a future that may mean the end of fee-for-service Medicare

9/11/2011 ι 6THE CAMDEN GROUP HOOPER, LUNDY, AND BOOKMAN P.C.

WHY THIS PROGRAM?

The Failure of the Proposed ACO Regulations The March Towards Health Care Reform in the Commercial

Sector Delivery System Redesign is Inevitable Regardless of

Government MisstepsGovernment Missteps Integration is Occurring The Centers for Innovation’s Bundling Models The Centers for Innovation s Bundling Models


PPACA—Searching for Delivery System Reform

PPACA contains much insurance reform Movements towards expanded coveragep g Revenue generation Expenditure reductions in Medicare and Medicaid “Integrity” expansion But, precious little heath care delivery system reform


Agenda

Bundled Payment and Readmission RiskMedical HomeMedicare Shared Savings ProgramMedicare Shared Savings ProgramCritical Success Factors

Healthcare Spending GrowthCMS Projections for National Healthcare Spending

$4,353

21.0%

$4,500

$5,000

CMS Projections for National Healthcare SpendingCY 2003 - 2018(Amount in Billions)

$$3,313

$3,541

$3,790

$4,062

18.9%

19.3% 19.8%

20.3%

19.0%

20.0%

$3,500

$4,000 National Health Expenditures (billions)

National Health Expenditures as a Percent of Gross Domestic Product

$2 113$2,241

$2,379$2,510

$2,624$2,770

$2,931$3,111

17.6%17.7%

17.9%18.0%

18.2%

18.5%

18.0%$2,500

$3,000

$1,735 $1,855$1,981

$2,113

16.6% 17.0%$1,500

$2,000

15.8%15.9% 15.9%

16.0%16.2%

16.0%

$500

$1,000


15.0%$0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: Centers for Medicaid & Medicare Services - NHE Projections 2008-2018, Forecast Summary and Selected Tables

Looking Ahead

“ if ld t ll t“…if we could actually get our health-care system across the board to hit the efficiency levels of a Kaiserlevels of a Kaiser Permanente… we actually would have solved our problems ”problems.

-President Obama, 2010


GOALS OF REFORM MODELS

Bend the cost curve

Improve Quality; narrow the network?

Shift total government program risk to providers

B t d t t i t b fi i f d f h i But, do not restrict beneficiary freedom of choice


Assumptions

Can decrease cost and improve quality through greater integration and coordination among hospitals, physicians, and post-acute providers

Evidence-based medicine works and is a key component Need quality reporting can design successful quality metrics Need quality reporting—can design successful quality metrics

which will lead to care improvements Alignment of economic incentives among providers will lead to g g p

more efficient and cost-effective care


Goals of CMS’ ‘Bundling for Care Improvement Initiative’

Improve overall quality and Value

Drive physician collaboration through Financial Incentives as a mechanism to improveas a mechanism to improve efficiency and achieve sustainable results

Reduce or stabilize growing costs to Medicare for acute care services by maximizingcare services by maximizing the use of available capacity in high quality providers


Bundling Concepts

Basic idea is predetermined payment for a defined bundle of services

What services are in the bundle? What services are in the bundle? What is the episode of care? What conditions are subject to the bundled payments?j p y Retrospective vs. Prospective Bundled Payment Retrospective—providers are paid under the Medicare fee-

ffor-service systems with a reconciliation to the bundled amount

Prospective—the awardee is paid a bundled payment Prospective the awardee is paid a bundled payment amount, standard Medicare FFS payments are not made, and the awardee is responsible for paying the other providers


The Basics

CMMI Has Recently (August 23, 2011) Proposed Four Separate Bundled Payment Models For StudyGo To: http://innovations cms gov/areas of focus/patientGo To: http://innovations.cms.gov/areas-of-focus/patient-

care-models/bundled-payments-for-care-improvement.html

All Four Models Will Include An Assumption of Financial Liability All Four Models Will Include An Assumption of Financial Liability By The Awardee for Medicare Payments That Exceed Historical Trends—No Caps, No risk corridors (unlike proposed ACO regulations)regulations)

All Four Models Permit “Approved” Gainsharing

Apply only to Medicare Part A and Part B services


Beneficiaries Must Be Notified of Participation and Will Continue to Have Freedom To Choose Their Providers

The Basics

Awardees may be acute care hospitals, physician group practices, health systems, physician-hospital organizations, post-acute providers, and “conveners of participating health care providers”

Applicants are encouraged to participate in other Medicare payment initiatives as well, including the Medicare Shared Savings Program, Pioneer ACOs, and other medical home and shared savings initiatives


The Basics

Bundled Payment Agreements Will Last For 3 Years (with Potential 2 Year Extensions)

First Program Could Start As Early as 1Q 2012 (Model 1 Awardees)

LOI and Application Due Dates: LOI and Application Due Dates:Model 1 LOI Due October 6, 2011; Application Due

November 18, 2011,Models 2-4 LOI Due November 4, 2011; Application Due

March 15, 2012 LOIs are non-binding

Models 2-4 Must Also Submit a Research Request Packet Along With Their LOI To Receive Data From CMS


Along With Their LOI To Receive Data From CMS Applicants Late Submitting Their LOI Will Not Be Considered

The Basics

Applications will be scored, process will be selective Applicants must demonstrate ability to bear risk of losspp y These programs generally include patients who are eligible for

fee-for-service (“FFS”) Medicare on the basis of age or disability (ESRD beneficiaries and Medicare Advantage enrollees are(ESRD beneficiaries and Medicare Advantage enrollees are excluded)

Medicare must be the primary payerp y p y Unclear about how coordination with secondary payers and bad

debts will work Applicants can request some of a portion of a Deductible waiver


Model 1- Retrospective Acute Care Hospital Stay Only

Applies to Noted Medicare FFS Beneficiaries Admitted to Awardee Regardless of Assigned MS-DRG

Episode Includes All Part A Services Furnished To Beneficiaries

I l d H i l Di i T i d R l d Includes Hospital Diagnostic Testing and Related Therapeutic Services Furnished by an Entity Wholly-Owned or Operated by the Hospital Three (3) Days Before Admission

Episode Ends On Hospital Discharge



Awardees To Offer CMS A Discount On Usual Part A Inpatient Payments Discount to be Calculated to Include All Payment Adjustors Discount to be Calculated to Include All Payment Adjustors

and Applicable Outlier Payments (Except DSH, Capital, IME)

Medicare makes normal FFS payments less discount on hospital Part A payments

Minimum Discounts: 0% or Higher For First 6 Months of Year 1 0% or Higher For First 6 Months of Year 1 .5% or Higher For Second 6 Months of Year 1 1% or Higher for Year 2


g 2% or Higher for Year 3


There Is No Episode Reconciliation on Part A Payments

Episode Monitoring: Awardee Required To Pay Medicare For Amount Of Part A

and Part B Payments For Inpatient Stay In Excess ofand Part B Payments For Inpatient Stay In Excess of Trended Historical Aggregate Beyond Risk Threshold

P t E i d M it i Post-Episode Monitoring:Monitoring Period = 30 days post hospital discharge Awardee Required To Pay Medicare Amount of Part A and Awardee Required To Pay Medicare Amount of Part A and

Part B Payments During Monitoring Period In Excess Of Trended Historical Aggregate Risk Threshold


Model 2- Retrospective Acute Care Hospital Stay Plus Post-Acute Care

E t d E i d f C T I l d P t A t C Extends Episode of Care To Include Post-Acute Care

Uses Typical FFS Payment With Retrospective Reconciliation Uses Typical FFS Payment With Retrospective Reconciliation

Applies to Proposed/Accepted MS-DRG’spp p p

Episode Begins with Admission and Continues Through a Minimum of 30 days Following Discharge

Quality Measures To Be Proposed (But Standard Set Will Quality Measures To Be Proposed (But Standard Set Will Ultimately Be Required)



E i d I l d Episode Includes: All Part A and Part B Services Furnished During Stay

All Part A and Part B Services In Post-Discharge Period Related To Episode Anchor

All Hospital Diagnostic Testing and Related Therapeutic Services Furnished By an Entity Wholly-Owned or Operated By the Hospital Three (3) Days Before Admission

All Part A Services For Related Readmissions All Part A Services For Related Readmissions

All Part B Services Furnished During the Post-Discharge


Period during Related and Unrelated Readmissions


Applicant proposes a “Target Price”

May be risk adjusted

Post-episode reconciliation between Target Price and Part A and Part B expenditures

Awardee pays Medicare if expenditures exceed Target Price

Awardee receives additional payments if expenditures are less than Target Price



Two Options:

Option 1:

Minimum 30 89 Day Post Discharge Period Minimum 30 -89 Day Post-Discharge Period Minimum 3% Discount (for Part A and Part B)

Option 2:

Minimum 90+ day Post Discharge Period Minimum 90+ day Post-Discharge Period Minimum 2% discount (for Part A and Part B)



Post-Episode Monitoring

Monitoring Period = 30 Days Post Episode

If Part A and Part B Payments For Services During Monitoring Period For Included Beneficiaries Exceed The Trended Historical Aggregate Risk Threshold, Awardee Pays M di Th DiffMedicare The Difference


Model 3- Post-Acute Care Only

Episode Begins with Initiation of Post Acute Care at Episode Begins with Initiation of Post –Acute Care at Awardee (or Participating) SNF, IRF, HHA, or LTCH Within 30 Days of Discharge from Acute-Care Hospital For Agreed Upon MS-DRGHospital For Agreed Upon MS DRG

Episode Lasts a Minimum of 30 Days

Episode Includes: All Related Part A and Part B Services Furnished

D i E i d P i d (I l di R l t dDuring Episode Period (Including Related Readmissions)

All Part A Services for Related Readmissions F i h d D i E i d P i dFurnished During Episode Period

All Related Or Unrelated Part B services Furnished During Episode Period



Applicant proposes Target Price

Traditional FFS Payment Reconciled Against Traditional FFS Payment Reconciled Against Agreed-Upon Target Price

Episode Reconciliation: Episode Reconciliation: If Aggregate FFS Payments Less Than Target

Price, Awardee Paid Difference If Aggregate FFS Payments More Than Target If Aggregate FFS Payments More Than Target

Price, Awardee Pays Medicare Difference




Monitoring Period = 30 Days After End of Episode If Part A and Part B Paid For Included Beneficiaries Exceeds

Th T d d Hi i l A P B d Ri kThe Trended Historical Aggregate Payment Beyond Risk Threshold, Awardee Pays Medicare Difference

Quality Measures To Be Proposed (But Standard Set Will Ultimately Be Required)


Model 4- Prospective Acute Care Hospital Stay Only

Episode Begins with Acute Inpatient Admission and Continues Through Discharge For Agreed/Accepted MS-DRGs

Episode Includes:

All R l d P A d P B S i All Related Part A and Part B Services Including Hospital Diagnostic Testing and Related

Therapeutic Services Furnished by an Entity Wholly-Owned O t d b th H it l Th (3) D B f Ad i ior Operated by the Hospital Three (3) Days Before Admission

All Part A Furnished During Related Readmissions All Part B Furnished During Any Readmission (Related or g y (

Unrelated) During Episode Period

Episode Ends at Discharge


p g


Applicants Expected to Propose a Target Price With a Single Rate of Discount (Minimum 3% or Larger For ACE MS-DRGs))

Payment Of Agreed-Upon Bundled Payment Is Made To Awardee

Physicians To Be Paid By Awardee With No Separate Payment By CMS

Payment To Physician Could Be Same Rate or Different Negotiated Rate

Covered Part B Claims Will Be Processed As No Pay



Episode Reconciliation Single Payment Made Awardee Must Repay Medicare for Any Separate Payment

for: Part A or Part Claims During the Episode (including a Part A or Part Claims During the Episode (including a

related readmission) Part B Claims During Episode

P t B Cl i D i A R d i i (R l t d Part B Claims During Any Readmission (Related or Unrelated)




Monitoring Period = 30 Days After Discharge

Awardee Must Repay Medicare Part A and Part B Payments for Services During Monitoring Period InPayments for Services During Monitoring Period In Excess of Trended Historical Aggregate Payment Beyond Risk Thresholdy


BUSINESS CONCERNS AND S CPERSPECTIVE


Commercial Plans are Moving Ahead


Value Based Purchasing Design (VBPD) – Less Out-of-Pocket for Patients

Date: January 1, 2011�ALVARADO HOSPITAL LLC ARROYO GRANDE COMMUNITY HOSPITAL BAKERSFIELD MEMORIAL HOSPITAL CEDARS-SINAI MEDICAL CENTER DAMERON HOSPITAL

QUEEN OF THE VALLEY MEDICAL CENTER SAN ANTONIO COMMUNITY HOSPITAL SAN JOAQUIN COMMUNITY HOSPITAL SANTA MONICA UCLA MEDICAL CENTER SANTA ROSA MEMORIAL HOSPITAL

Who: �

DAMERON HOSPITAL DESERT REGIONAL MEDICAL CENTER EISENHOWER MEDICAL CENTER EL CAMINO HOSPITAL ENLOE MEDICAL CENTER INC FRENCH HOSPITAL MEDICAL CENTER FRESNO SURGICAL HOSPITALGood SAMARITAN HOSPITALHANFORD COMMUNITY MEDICAL CENTERHEALDSBURG DISTRICT HOSPITAL

SANTA ROSA MEMORIAL HOSPITAL SIERRA VISTA REGIONAL MEDICAL CENTER SONORA REGIONAL MEDICAL CENTER ST AGNES MEDICAL CENTER ST JOHN’S HOSPITAL AND HEALTH CENTER ST JOSEPH HOSPITAL – ORANGE ST JUDE MEDICAL CENTER ST MARYS MEDICAL CENTER ST VINCENT MEDICAL CENTER STANFORD UNIVERSITY HOSPITAL HEALDSBURG DISTRICT HOSPITAL

HOAG MEMORIAL HOSPITAL PRESBYTERIANHUNTINGTON MEMORIAL HOSPITALJOHN F KENNEDY MEMORIAL HOSPITALKAWEAH DELTA MEDICAL CENTERLOMA LINDA UNIVERSITY MEDICAL CENTERLONG BEACH MEMORIAL MEDICAL CENTERMERCY MEDICAL CENTER – REDDINGMETHODIST HOSPITAL OF SACRAMENTO PLACENTIA LINDA HOSPITAL

STANISLAUS SURGICAL HOSPITAL THOUSAND OAKS SURGICAL HOSPITAL TORRANCE MEMORIAL MEDICAL CENTER TWIN CITIES COMMUNITY HOSPITAL INC UC DAVIS MEDICAL CENTER UCSF MEDICAL CENTER VALLEY PRESBYTERIAN HOSPITAL VALLEYCARE MEDICAL CENTER

Participating Health Plans:

PLACENTIA LINDA HOSPITAL

Procedures:

Select Orthopedic and Cardiac procedures (single hip and knee replacement and cath with stent


placement)

Commercial Payer and Research Funding Priority

Target Date: April 1, 2011g p

Funder: Agency for Healthcare Research and Quality

Who:

ParticipatingHealth Plans:

Selected Orthopedic procedures (hip and


Procedures:Selected Orthopedic procedures (hip and knee replacement, knee arthroscopy, and catheterization with stents)

Blue Cross Bundling in New Jersey

Dr. Richard Popiel, who served as Vice President and Chief Medical Officer of Horizon BCBSNJ and will lead the new company as President and Chief Operating Officer. “We’re committed to leading a major

ll b ti ff tcollaborative effort among physicians, hospitals, policy makers, employers, patients, and insurers to rethink how we deliver


insurers to rethink how we deliver quality care and control costs.”

Why Should a Provider Take BundlingWhy Should a Provider Take Bundling Risk?


Bundled Payment: Nothing New Conceptually

Medicare participating Heart Bypass

Medicare participating Centers of Excellence Demonstration

Medicare participating Cardiovascular and Orthopedic Centers of Excellence

CMS Medicare Heath Care Quality Demonstration Project

ACE Demonstration “Value based Care

CMS National Voluntary PilotHeart Bypass

DemonstrationDemonstration Excellence

DemonstrationValue-based Care

Centers”Pilot

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Medicare Cataract Alternative Payment D t ti

Geisinger Health System

Prometheus Payment Method

United Healthcare Oncology Bundled PaymentDemonstration

IHA CA Commercial Bundled Payment Project

Blue Cross New Jersey

Payment


Blue Cross New Jersey Orthopedics Bundled Payment

Estimated Cumulative Percentage Changes in National Health Care Possible Reform Savings

Expenditures, 2010 through 2019


Hussey P., et al. New England Journal of Medicine 2009;361:2109-2111HIT denotes health information technology, NP denotes nurse practitioner, and PA denotes physician assistant.

CMS’ Latest Bundled Program Major changes from ACE to BPCII Chronic-disease management bundled payments will be next with Models

5,6,7 CMS implementing effective 2013 CONSOLIDATED Part A and Part B

Major changes from ACE to BPCII

CMS implementing effective 2013 CONSOLIDATED Part A and Part B Fiscal Intermediary contractors, staging for nation-wide Bundled Payment deployment

Physician Incentive grows from 25% to 50% Physician Incentive grows from 25% to 50% Patient Shared Savings eliminated Immense creativity being allowed to implement bundled payments in ALL

clinical spaces: one version is one versionclinical spaces: one version is one version. Un-Bundled FFS Medicare likely to end in 2019


Growing Evidence for Bundled Payment

Key findings: Medical spending was two

percent lower for Hospitals and

“Harvard Study Shows Global Payments Improve Healthcare While Controlling Costs”

percent lower for Hospitals and physicians involved in global payments compared with those under traditional Fee-for-Service modelsmodels.

For physicians and Hospitals with no prior experience in global payments, spending was d d b i tdecreased by six percent.

Year-one savings were the result of altering referral patterns and shifting care to lower-cost

S Oh J (J l 14 2011) H d t d h l b l t i h lthfacilities. The quality of care among sites

that participate in bundled payments is significantly higher

Source: Oh, J. (July 14, 2011). Harvard study shows global payments improve healthcare while controlling costs. Becker’s Hospital Review. Retrieved from http://www.beckershospitalreview.com/hospital-physician-relationships/harvard-study-shows-global-payments-improve-healthcare-while-controlling-costs.html


p y g y gthan that of the providers under traditional contracts.

Building the Foundation for Shared Risk

Inpatient Episode Payment ModelsInpatient Episode Payment Models

Fee-for-Service Bundled PaymentPayer Payer

Payer provides single payment intended to

t f

$ $ $ $ $$

cover costs of entire patient hospitalization

$

Post-acuteServices

Hospital

Anesthesiologist

ConsultingPhysician

HospitalistSurgeon Hospital Inpatient Physicians

Post-acuteServices


Physician

Mechanisms to Drive Quality and Efficiency

A Market Approach:A Market Approach:

Bundling or global payments

Competitive Quality scores and bid will determine winner

Gainsharing with physicians Gainsharing with physicians expanded

Shared savings with gbeneficiaries eliminated for 2012/2013 version….however,

A li t t i Applicant may request a waiver for all or some of the Medicare deductible.


CMS Application Overview Selection Criteria and Weights Financial Model (40 points) Overall Savings to Medicare Risk Adjustment (if applicable) Anticipated Actions that will result in lower spending Anticipated Actions that will result in lower spending

Quality and Patient Centeredness (25 points) Proposed Mechanisms to Improve Quality and Patient Experience of Care Proposed Quality Metricsp y Quality Assurance and Continuous Quality Improvement Beneficiary Protections

Demonstration Design (20 points) Definition of Episode Level of Provider Engagement and Participation Care Improvement Design for Gainsharing Design for Gainsharing

Organizational Capabilities, Prior Experience, and Readiness (15 points) Financial Arrangements Commitment and Credentials of Executives and Governance Bodies


Success and Readiness to Participate Partnerships

Application Process

Financial model and arrangements

Organizational structure and governance Organizational structure and governance

Current quality and efficiency metrics at 90th percentile

Cost savings opportunities and quality improvement

Provider engagement and partnerships

Care Redesign Facility and Historyg y y

Marketing plan to beneficiaries


Why Others Have Done It?

Raise the profile of a high performing Clinical program

More effectively partner with physicians

G k t h t i Grow market share across payer categories

Retain existing Medicare business and grow it

Add payers to the existing portfolio

Develop management intelligence to deliver high Develop management intelligence to deliver high Value care in a bundled payment environment as FFS is dying quickly


What Is In It for Physicians?

Potential volume increase

Protect current Medicare market share

Pay physicians more quickly if in Model 4

Co-management of clinical services affecting them

Improved quality and patient experience

Gain Sharing up to a 150 percent of Medicare

Effective and integrated care coordination


g

What’s In It for Hospitals?

Strengthen service line: Reduction of costs Enhanced operational efficiency Enhanced operational efficiency Enhance clinical quality Improved patient experience P t t t k t h Protect current market share

Build Organizational Mastery to manage to EOC fixed budget

Build market share Preferred provider status within region

Stepping stone in physician integration supporting Stepping stone in physician integration supporting progress toward clinical integration or ACO Alignment in care management

Co management of clinical services


Co-management of clinical services

What’s in it for CMS?

CMS has reported $42.3 Million in savings in the current CMS has reported $42.3 Million in savings in the current ACE Demonstrations with substantial increases in

Clinical Quality.


Sample Model Four Cardiac Bundled Payment BidDraft CMS Bundled Payment Bids by MS-DRG for Application - Conservative Discount

CY 2011

CY 2010 Medicare

MS-DRGFFS

CasesAvg. Cont.

Margin/CaseHospital Actual Discount

Hosp w/ Discount

ACE Avg (1)

Compare to ACE %

Proposed Bid

Hospital Actual

ACE Avg (2)

Compare to ACE %

Proposed Bid

216 12 $3 969 $80 220 $ 8 214 $6 408 $12 806 20% $ 8 214 $9 2 4 $10 846 ($1 3) 14% $10 846 $ 6 2 $

Part A Part B

Total ACE Average

Total Proposed

Bid

216 12 $37,969 $80,220 -2.5% $78,214 $65,408 $12,806 20% $78,214 $9,274 $10,846 ($1,573) -14% $10,846 $76,255 $89,061217 3 23,309 53,018 -2.5% 51,692 45,396 6,296 14% 51,692 8,792 7,543 1,250 17% 8,792 52,939 60,485218 5 16,320 43,036 -2.5% 41,960 44,001 (2,041) -5% 41,960 5,889 5,899 (10) 0% 5,899 49,900 47,858219 5 34,125 63,818 -2.5% 62,222 51,155 11,067 22% 62,222 10,438 7,893 2,545 32% 10,438 59,048 72,660220 2 18,024 42,849 -2.5% 41,778 35,761 6,017 17% 41,778 7,931 5,373 2,559 48% 7,931 41,134 49,709221 8 10,432 35,771 -2.5% 34,877 31,986 2,891 9% 34,877 5,233 4,665 568 12% 5,233 36,651 40,110226 6 18,508 49,280 -2.5% 48,048 38,329 9,719 25% 48,048 2,911 3,290 (379) -12% 3,290 41,620 51,338227 25 12 508 40 862 -2 5% 39 840 33 028 6 813 21% 39 840 2 178 1 825 353 19% 2 178 34 853 42 018227 25 12,508 40,862 -2.5% 39,840 33,028 6,813 21% 39,840 2,178 1,825 353 19% 2,178 34,853 42,018231 1 30,130 63,557 -2.5% 61,968 47,495 14,473 30% 61,968 5,632 6,590 (957) -15% 6,590 54,085 68,558232 0 0 36,660 -2.5% 35,744 43,687 (7,943) -18% 35,744 5,855 6,032 (177) -3% 6,032 49,719 41,776233 18 20,225 55,277 -2.5% 53,896 46,036 7,860 17% 53,896 6,657 7,277 (620) -9% 7,277 53,313 61,173234 18 16,766 37,316 -2.5% 36,383 31,692 4,692 15% 36,383 5,503 5,361 142 3% 5,503 37,052 41,887235 8 20,059 45,397 -2.5% 44,262 38,709 5,553 14% 44,262 5,804 6,236 (432) -7% 6,236 44,945 50,498236 19 10,655 30,068 -2.5% 29,316 24,212 5,104 21% 29,316 5,030 4,085 944 23% 5,030 28,297 34,346242 10 6,499 26,743 -2.5% 26,075 21,807 4,268 20% 26,075 1,607 2,693 (1,086) -40% 2,693 24,500 28,768243 17 9,365 20,137 -2.5% 19,634 16,418 3,215 20% 19,634 1,193 1,480 (287) -19% 1,480 17,898 21,113244 15 6,070 15,855 -2.5% 15,459 13,365 2,094 16% 15,459 1,481 1,037 444 43% 1,481 14,402 16,940246 46 10,977 27,190 -2.5% 26,510 18,790 7,720 41% 26,510 0 2,428 (2,428) -100% 2,428 21,218 28,939247 173 6,928 15,287 -2.5% 14,905 13,291 1,614 12% 14,905 1,712 1,406 306 22% 1,712 14,697 16,617248 17 10,873 23,347 -2.5% 22,763 17,071 5,692 33% 22,763 2,540 2,173 367 17% 2,540 19,244 25,302249 43 5,694 13,918 -2.5% 13,570 11,922 1,648 14% 13,570 1,289 1,477 (188) -13% 1,477 13,400 15,048250 4 2,756 18,475 -2.5% 18,013 16,111 1,902 12% 18,013 1,705 2,869 (1,164) -41% 2,869 18,980 20,882251 40 7 035 13 997 13 647 11 977 1 670 14% 13 647 2 620 1 764 856 49% 2 620 13 741251 40 7,035 13,997 -2.5% 13,647 11,977 1,670 14% 13,647 2,620 1,764 856 49% 2,620 13,741 16,267258 0 0 18,197 -2.5% 17,742 17,344 398 2% 17,742 280 1,924 (1,644) -85% 1,924 19,268 19,666259 1 7,472 13,093 -2.5% 12,766 12,433 333 3% 12,766 1,705 1,133 571 50% 1,705 13,567 14,471260 1 8,266 27,217 -2.5% 26,537 29,733 (3,196) -11% 26,537 5,456 6,330 (874) -14% 6,330 36,062 32,867261 2 346 12,318 -2.5% 12,010 9,735 2,275 23% 12,010 1,319 1,283 37 3% 1,319 11,018 13,330262 0 0 7,086 -2.5% 6,909 7,572 (664) -9% 6,909 0 875 (875) -100% 875 8,448 7,784

Total/Avgs 499 $10,295 $24,944 -2.5% $24,320 $20,572 $3,748 18% $24,320 $2,586 $2,629 ($43) -2% $2,942 $23,201 $27,262


(1) Four ACE Demo sites adjusted for FY 2011, Wage Index, and Capital Geographic Adjustment Factor (GAF)(2) Four ACE Demo sites adjusted for FY 2011 and Geographic Practice Cost Index (GPCI) = indicates ACE average w as used for bid

Required Beneficiary Education by Provider


Extensive Required Quality Measures

AMI 1 Aspirin at ArrivalAMI-1 Aspirin at Arrival

AMI-5 Beta-Blocker Prescribed at Discharge

AMI-9 Inpatient Mortality

HF-1 Discharge Instructions

HF-3 ACEI or ARB for LVSD

PN-2 Pneumococcal Vaccination

PN-5c Timing of Receipt of Initial Antibiotic Following Hospital Arrival

PN-7 Influenza Vaccination (Note: Reported by Flu Season ONLY)

SCIP-Inf-2 Prophylactic Antibiotic Selection for Surgical Patientsp y g

SCIP-Inf-3 Prophylactic Antibiotics Discontinued Within 24 Hours After Surgery End Time

SCIP-VTE-1 Surgery Patients with Recommended Venous Thromboembolism Prophylaxis Ordered

VTE-2 Intensive Care Unit Venous Thromboembolism Prophylaxis

VTE-6 Incidence of Potentially-Preventable Venous Thromboembolism

STK-2 Discharged on Antithrombotic Therapy


STK 2 Discharged on Antithrombotic Therapy

STK-5 Antithrombotic Therapy By End of Hospital Day 2

Extensive Required Quality Measures

STK 6 Discharged on Statin MedicationSTK-6 Discharged on Statin Medication

TK-10 Assessed for Rehabilitation

ED-2 Admit Decision Time to ED Departure Time for Admitted Patients

HAI Central Line Associated Bloodstream Infection (CLABSI)

Structural-2 Participation in a Systematic Clinical Database Registry for Stroke Care

Data Accuracy Data Accuracy and Completeness Acknowledgement

MORT-30-HF Heart Failure (HF) 30-Day Mortality Rate

READM-30-AMI Acute Myocardial Infarction (AMI) 30-Day Readmission Rate

READM-30-PN Pneumonia (PN) 30-Day Readmission Rate( ) y

PSI-06 Iatrogenic Pneumothorax, Adult

PSI-14 Postoperative Wound Dehiscence

IQI-11 Abdominal Aortic Aneurysm (AAA) Mortality Rate (with or without volume)IQI-11 Abdominal Aortic Aneurysm (AAA) Mortality Rate (with or without volume)

IQI-91 Mortality for Selected Medical Conditions (composite)

HAC-2 Air Embolism

HAC 4 P Ul St III & IV


HAC-4 Pressure Ulcer Stages III & IV

HAC-8 Manifestations of Poor Glycemic Control

Critical Success Factors Under Bundling

Vision, perseverance, and courage

Physician leadership and co-management

Targeted education to distribution channels

Best practices in cost, efficiency and effectiveness

90th percentile Quality

Legal Structures able to G


handle Gainsharing

LEGAL ISSUES


THREE CATEGORIES OF REGULATORY ISSUES

Federal laws for which CMS has waiver authority

Federal laws for which CMS has no waiver authority

State laws


CMS Waiver Authority

CMS may waive any provision in Titles 11 and18 of the Social Security Act as may be necessary to test models described in statute authorizing Centers for Innovation (Social Security Act section 1115A(d)(1))

This includes the federal CMP statute the federal anti-kickback This includes the federal CMP statute, the federal anti-kickback statute, and the Stark law

Applicant should propose specifically what aspects of the law it wants waived and obtain specific approval for its models and waiver of the potentially applicable laws as applied to those modelsmodels


CMP Statute

The CMP statute prohibits payments from hospital to physician to reduce or limit services to Medicare or Medicaid beneficiaries [42 U S C sec 1320a 7a(b)(1) and(2)][42 U.S.C. sec. 1320a-7a(b)(1) and(2)]

Could be implicated by gainsharing arrangements or other innovative arrangements to economize on care

CMS has indicated it will permit gainsharing under bundling models

Compensation to be shared cannot exceed Compensation to be shared cannot exceed 50% of the total savings achieved under the bundled

payment program50% f h i i ’ l t f th i l d d i 50% of physician’s normal payment for the cases included in the gainsharing initiative

Physicians may not reduce or limit medically necessary services


y y y y Physician participation in gainsharing must be voluntary

The Stark Law

The Stark law prohibits referrals by a physician to an entity with which the physician has a financial relationship for the provision of designated health services (“DHS”)

DHS includes inpatient and outpatient hospital services There are numerous and complex exceptions There are numerous and complex exceptions There will likely be various financial arrangements between

DHS entities and physicians:p yGainsharing Hospital payments to physicians for services

May be difficult to fit these arrangements within an existing exception


The Federal Anti-Kickback Statute

Prohibits the payment or receipt or remuneration to induce referrals of government health care business

Some of the arrangements could be perceived as inducing referralsGainsharing or other payments to physiciansGainsharing or other payments to physicians Arrangements with post-acute providers could be seen as

such providers furnishing remuneration for referralsp g


Non-Waiveable Statutes

Federal Antitrust laws Could be implicated if there is collaborate pricing among p p g g

competitors, or other anti-competitive behaviorMay occur if model is used beyond Medicare

C id ki FTC/DOJ L Consider seeking FTC/DOJ Letter

Tax exempt Status Issues Tax-exempt Status Issues InurementMore than incidental private benefitMore than incidental private benefit Use of tax-exempt bond financed property Payments consistent with fair market value


Cannot share tax-exempt organization’s profits

State Laws

State Anti-Kickback Statutes State Self-Referral Statutes State Statutes Governing Insurance, Health Plans, and Risk-

Bearing OrganizationsS A i l State Antitrust laws

State Corporate Practice of Medicine Prohibitions


Patient Centered Medical Home


What is a Medical Home?

Patient-centered Medical Home (“PCMH”)All of a patient’s care is coordinated by a physician-led

multidisciplinary team. Access and care coordination are facilitated by an extensive use of technology.


Primary Care Model-Key Features

A personal PCP Physician-director medical

practicepractice Whole-person orientation Coordinated care Quality and safety Enhanced access


Principles of Patient-centered Medical Home“When and how” based on ti t f d d

Patient Accessand

Communication

patient preference and needs

Metrics used to define performance: quality, access, efficiency

Proactive in identifying patient needs

Ensure patients have goals for their care and responsibility for Communication

Culture of continuous improvement Clear lines of authority/

responsibility and process fordecision-making

p yhealth related behaviorsProcesses assure smooth transition of care and communication between

id (

Team orientation

Patient-Centered Quality and

Efficient Care

providers (across continuum)

Work to top of licenseShare resources to maximize efficiency

Orientation and training

Aligned providers

Facilitate physician-physician communication

Facilitiesand Technology

Orientation and trainingStandardized roles and work flows

Facilities support teamwork, and efficient work flow


and efficient work flowTechnology facilitates aims of care modelSource: The Camden Group

The Care Team of the Patient-centered Medical Home

Primary Care Provider Care Management

Delegated“C t E ti ”Health Education

Patient-centeredMedical Home “Carve-out Expertise”Health Education Medical Home

Specialists Behavioral Health

Comprehensive Care ClinicsSocial Services


Clinics

PCMH’s Paid in any Number of Ways

Can be paid for on a PMPM basis or DFFS Typical Sponsors are Capitated Medical Groups or Integrated yp p p p g

Hospitals CMS is conducting a PCMH Demonstration attempting to lower

Over all cost of careOver all cost of care Gainsharing is utilized to reward goal achievement based upon

actual savings seen against historical costsg g Most results have been marginal so far…..utilization gains

countered by demographic creep.


Questions and Discussion

R b t Mi ki FACHERobert Minkin, FACHESenior Vice President, The Camden Group

[email protected]

Lloyd A. BookmanPartner, Hooper Lundy & Bookman

Lbookman@health law [email protected]

Robert L. RothPartner, Hooper Lundy & Bookman

[email protected]


aco alternatives: payment bundling, based care and...

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