alaha/hfma audit summit: bundled payments lessons learned€¦ · alaha/hfma audit summit: bundled...

AlaHA/HFMA Audit Summit:

Bundled Payments Lessons

Learned

Mary Beth Briscoe, CFO

April 21, 2016

Agenda

1) Overview of Bundled Payment Programs

• Bundled Payments for Care Improvement (BPCI)

• Comprehensive Care for Joint Replacement Program (CJR)

• Oncology Care Model (OCM)

2) UAB Hospital – How Are We Managing?

3) Recommendations

4) Questions

Background

Traditional Medicare Model = fragmented care with minimal coordination across providers and health care settings

Rewards for Volume instead of Quality

Research has shown that bundled payments can align incentives for providers – hospitals, post-acute care providers, physicians, and other practitioners – allowing them to work closely together across all specialties and settings throughout the continuum of care.

CMS Accelerates the Tipping Point for Everyone

0%

20%

40%

60%

80%

100%

2011 2015 2016 2018

Alternative Payment Models

Traditional, Fee for Service

“…HHS goal of 30 percent traditional FFS Medicare payment through alternative payment models by the end of 2016… 50 percent by the end of 2018”

HHS Press Office 1-26-15

Background

BPCI OVERVIEW

- OPTIONAL

- MANDATED

Bundled Payments for Care Improvement

BPCI: Where are we?

Two cohorts so far…will there be another?

As of 1/1/16, there are 1,574 participants in Phase 2 comprised of 337 Awardees and 1237 Episode Initiators

409 hospitals

700 skilled nursing facilities

288 physician practices

100 home health agencies

9 inpatient rehabilitation facilities

1 long term care hospital

Two Types of Gain Sharing

Net Payment Reconciliation Amount

• Medicare Spend Reduction

Internal Cost Savings

• Hospital Expense Reduction

CJR OVERVIEW “MANDATED”

Why CJR?

$12.299 Billion Total Episode Spending

$343 Million Savings to Medicare

2.8% Overall CJR Savings to

Medicare

CJR moved forward with 67 MSAs April 1

Tuscaloosa:

Hale, Pickens,

Tuscaloosa

Montgomery:

Autauga, Elmore,

Lowndes,

Montgomery

Dothan:

Geneva,

Henry,

Houston

Stop-Loss & Stop-Gain Limits Narrowed

CJR will phase in stop-gain limits, rather than static 20% stop-gain limits in all 5 years.

Less potential loss in Years 2 and 3.

Rural hospital, SCH, MDH, RRC participant have the same stop-gain limits but different stop-loss limits:

2016: N/A, no downside

2017: -3%

2018-2020: -5%

OCM OVERVIEW

OPTIONAL

OCM Overview

Episode-based

• Payment model targets chemotherapy and related care during a 6-

month period following the initiation of chemotherapy treatment

Emphasizes practice transformation

• Physician practices are required to engage in practice transformation

to improve the quality of care they deliver

Multi-payer model

• Includes Medicare fee-for-service and other payers working in tandem

to leverage the opportunity to transform care for oncology patients

across the population

UAB Status

• In process of data review

• Assessing financial implications / learning opportunities

• Impact on MACRA

OCM Payment Approach

Two-part payment approach:

1) A monthly $160 per-beneficiary care management payment for

Medicare FFS beneficiaries

1) A performance-based payment for OCM episodes.

• The performance-based payment will be determined based on

the practice’s achievement and improvement on quality

measures

• Participants will receive regular Medicare FFS payments during

the model.

• Performance-based payments will be calculated retrospectively

following the completion of a 6-month episode

OCM - Risk Arrangements

1. One sided arrangement

• Available throughout the five year period and includes only the PBPM

payments and performance based payments if required reductions

achieved

• One sided risk arrangements are set at 4% discount - maximum

performance payment set at 20% of benchmark before taking the

CMS discount.

2. Phased-in two-sided risk arrangement

• One-sided risk in the first two performance years and symmetric two-

sided risk thereafter (requires the participant to pay back

expenditures over the target price)

• Optional and is a 2.75% discount after year 2

• The maximum performance payment is set at 20% of the benchmark

before taking the CMS discount. Maximum payback in the two sided

arrangement is also set at 20%.

OCM Modeling

* includes additional program costs and potential IP and drug cost reductions

EXAMPLE

UAB BUNDLE PARTICIPATION

Why Bundles?

Bundled payments provided a counterstrategy to ACOs and

provides management experience across the continuum of

care

Bundled payments are now becoming mandatory models and

CMS and our participation positions organizations for

success in this new care delivery system

COPD, being a chronic disease, is difficult to manage across

a 90 day episode but gives UAB valuable experience that will

translate across all diseases

How Did We Make the Decision?

Measured the financial risk involved with participating in each

bundle

Selected a small cohort (COPD/Asthma)

Interested in learning to manage bundles that are voluntary,

and could become mandatory in the future

Cross-functional teams reviewed bundle participation

requirements and risk

BPCI Bundles

Currently participating in three bundles:

1. Chronic obstructive pulmonary disease,

bronchitis/asthma

2. Cardiac valve

3. Stroke

Also modeling for Comprehensive Care for Joint Replacement

(CJR)

Application accepted to the Oncology Care Bundle (OCM)

COPD Asthma Bundle Participation

Starting January 2013, entered Phase 1 (no-risk) of COPD/Asthma

bundled payment pilot with CMS

Bundle includes COPD and Asthma DRGs and any activity at any

location 90 days post discharge

Target price includes a 2% discount from historical average payments

by DRG

CMS will reconcile every quarter to see if payment is owed by CMS

or UAB

Improvement in key quality metrics provides an opportunity to

gainshare with physicians and post acute partners

Formed collaboration with home care agent

Formally went at risk (Phase 2) with CMS in January 2014

Additional Bundle Participation

Stroke, Cardiac Valve, CJR, OCM

UAB added two additional bundles, Stroke and Valve, in October 2015.

These two bundles are in Phase 2 (full-risk) and will start receiving

reconciliation reports from CMS after 6 months of participation

Currently modeling CJR – if mandatory participation broadens;

preparing now

UAB was recently accepted to participate in the OCM Bundle

Currently evaluating financial impacts – program costs, navigators,

cancer stage/level management, and impact of IP admission

reduction

HOW ARE WE MANAGING

ALTERNATIVE PAYMENT MODELS

How Are We Managing?

Administration established committees for each bundle to

develop processes to manage each bundle

Clinical teams provided clinical data and helped to manage

patients currently receiving care through the development of

care pathways

Finance partnered with each bundle committee to provide

financial P/L information for each bundle based on both the

target price and the internal costs of the organization

Patient Services worked with external partners identified

trends in post-acute provider performance through MSPB

analysis to begin the process of developing a preferred

provider network of SNFs and HH


External partners helped to identify patients that were higher risk for

complications and developed methods to better manage their care,

included VIVA in any discussions/partnerships

Other aspects of the program include:

Multi-disciplinary clinic that includes home health, DME, and

palliative care

Real-time notification of readmitted patients

Both the Stroke and Valve bundles are working through clinical

redesign, patient engagement, post acute provider engagement, and

identifying other major opportunities for improvement


Stoplight Forms

Patients receive a stoplight form that helps them recognize symptoms

and notify their physician before symptoms become unable to manage

at home and hospitalization is required


Post-Acute Performance SNF Scorecard


Continuum of Spend

Readmission often is over 2x the

“spend” of non-readmitted patient

Requires New Areas of Understanding


Data: Episode Drilldown

EXAMPLE


Data: Performance Summary - COPD

Average Estimated P&L per Episode

“Bundle

Busters”

EXAMPLE


Data: Discharge Trends Report

EXAMPLE


Data: Discharge Destinations - COPD


Data: Readmission Summary - COPD


Data: Physician Scorecard


Data: Diagnosis Dashboard- COPD

Holistic View

Baseline Oct Nov Dec

Cost per Discharge

LOS

HAC

PSI

Mortality

Patient Satisfaction

Gainsharing Metrics

Patient Satisfaction

Quality

Financial

Advanced Payment Model Profitability:

Monthly Reporting

Bundled Payment Models Example Reporting

Bundles Cases UH Payments

UH Direct

Cost

UH Indirect

Cost UH Total Cost

UH Encounter

Net

Bundle NPRA

Gain / Loss

UH Total

Bundle

Gain / Loss

COPD 42 $42,000 $36,330 $5,040 $41,370 $630 $14,000 $14,630

Stroke 17 $17,000 $18,700 $2,040 $20,740 ($3,740) $0 ($3,740)

Valve 26 $26,000 $22,490 $3,120 $25,610 $390 $0 $390

85 $85,000 $77,520 $10,200 $87,720 ($2,720) $14,000 ($3,350)

• Final reconciliation occurs 15 months from anchor date.

Gains are shared between the hospital, physicians and

external providers.

• Important for financial statement purposes

Pros/Cons of Bundled Payments

Pros:

Pricing, Transparency & Invoicing

Quality of Care

Coordination & Accountability Among Providers

Simplification

Financial Risks on the Provider

Cons:

Limitation of Effectiveness

Payment Distribution Difficulties

Financial Risks on the Provider

Challenges

Aligning internal and external data in a meaningful way in order to

provide reporting to the organization

Identifying “potential participants” within the organization

Managing post-acute spend

Defining roles and responsibilities in areas that we are “learning as we

go”

Recommendations

Technology – collecting and understanding data is key to managing

any initiative in healthcare today

Tracking – develop a tracking/reporting system that meets the needs

of the organization

Combining internal cost data with BPCI data to report not only the

P/L of BCPI participation, but also the overall P/L of the bundles

including internal costs

Clinical engagement is critical to your success

Internal Skills – outsourcing can also be beneficial

Actuarial

Collaboration

Recommendations

Retrospective data review is only part of the solution – it

provides a snapshot of possible process improvements

Using internal clinical data assists in improving quality of

care being delivered to our patients

Utilizing data to predict and model future patient episodes

to proactively provide care to our patients

QUESTIONS?

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