learning the new language of healthcare

February 7, 2014

The Georgia Society of CPAs

Learning the NewLanguage of Healthcare

February 7, 2014

9:35am – 10:25am

http://www.gscpa.org/Content/Home.aspx

February 7, 2014


What am I Trying to Say?

Everyone knows these… But what about these?

EBP Evidence-BasedProtocol

CQM Clinical QualityMeasures

CIN Clinically IntegratedNetwork

GPRO Group PracticeReporting Option

LOL Laughing out loud

SMH Shaking my head

BRB Be right back

JK Just kidding

BFF Best friends forever

BTW By the way

FYI For your information

February 7, 2014


ACO

CIN

PHOVBP

PQRS

Are We Speaking theSame Language?

February 7, 2014


The Curve

PE

RF

OR

MA

NC

E

TIME

First CurveFee-for-ServiceQuality Not RewardedPay for VolumeFragmented CareAcute Hospital FocusStand Alone Providers Thrive

Second CurveValue Payment

Continuity of Care RequiredSystems of Care

Providers at Risk for PaymentIT Centric

Physician Alignment

Straddle

Revenue DropsMinimal Reward for Quality

Volume Decreases

No Decisive Payment ChangePay for Volume Continues

High Cost IT InfrastructurePhysicians in Disarray

The Curve

February 7, 2014


• Sickness System

• Health: No Disease

• Acute Disease

• Fee for Service

• Hospital Beds Full

• Hospital Centric

• Doctor Centric

• Doctor Decides

• Quality Decided by Doc

• Wellness System

• Health: Wellness

• Chronic Disease

• Value Based Payment

• Hospital Beds Empty

• Community Centric

• Patient Centric

• Shared Decision Making

• Measurable Metrics

Old Healthcare New Healthcare

February 7, 2014


Old Healthcare New Healthcare

• Cost not considered

• Independent doctors

• Independent hospital

• Medical record secret

• Opaque

• Artificial harmony

• Analogue

• Hypothesis driven clinicaltrials

• Decreased cost

• Integrated doctors

• Integrated delivery sys.

• Open access record

• Transparent

• Cognitive conflict

• Digital

• Predictive analyticsactionable correlations

February 7, 2014


BundledPayments

PartialCapitation

GlobalPayment

Fee-for-Service

SharedSavings

Visitor

Symptomatic

Acute Needs

Services & Supplies

Unit Based

No Financial Risk

Visitor

Symptomatic

Acute Needs

Services & Supplies

Unit Based

No Financial Risk

Patient

Episode

Most CommonConditions

Packaged Treatments

Efficiency Based

Partial Financial Risk

Patient

Episode

Most CommonConditions

Packaged Treatments

Efficiency Based

Partial Financial Risk

Person

Overall Health

Community HealthCharacteristics

Manage Well Being

Outcome Based

Full Financial Risk

Person

Overall Health

Community HealthCharacteristics

Manage Well Being

Outcome Based

Full Financial Risk

Evolution of Reimbursement

February 7, 2014


The Healthcare System of the Past

PatientsPhysicians/Providers Payers

Hospitals & OtherProviders

Inefficiency

Lack ofCoordinatedInformation

UnsupportableEconomics

February 7, 2014


Hypothetical:Martha is a 67 year old women who needs a hip replacement

Six months later –Well Check

Hip Replacement Nine months later

• ED• Admitted for pneumonia

(payment)• Treated by hospitalist -

(payment)• Consulted by cardiologist -

(payment)

• Gaping hole in information• Information from previous

two episodes of care maynever reach primary careprovider-Drug interactions-Duplicative testing

Episodes of Care

• Orthopedic Surgeon (payment)• Surgery-Anesthesia (payment)-Pathology (payment)

• Acute Care (payment)• Rehabilitation-PT(payment)

Patient-CenteredMedical Home

Primary CarePhysician

Specialist

Physician

Physician

IPA

BundledPayment

+ Coordinated Care

+ $ for Coord. Care

PHO

Payer

NarrowNetwork

ACO

SharedSavings

Capitation

The Road to Clinical IntegrationO

LDN

EW

February 7, 2014


What Does “Value” Look Like?

VALUE=

QUALITY COST EFFICIENCY+ +

February 7, 2014


What is a “Value-BasedPayment” Model?

Value-Based Payment:

A payment model which rewards healthcare providersfor meeting certain predetermined performancemeasures related to quality and efficiency

Efficiency: The state or quality of achievingmaximum productivity with minimum

wasted effort or expenseQuality: The standard of something asmeasured against other things of a similar

kind; the degree of excellence ofsomething “quality of life” also the general

excellence of standard or levelValue: The regard that something is held to

deserve; the importance or preciousnessof something: “Your support is of great

value”

February 7, 2014


Hospital Value-Based Purchasing(“HVBP”)

• Rewards and penalties based on qualitymeasures and patient satisfaction scores

• Penalties for high readmission rates

– FY12-14 for AMI, heart failure, and pneumonia;expand list in FY15

– Reduce overall inpatient payment by 1%-3%

• Penalties for Hospital Acquired Conditions (HACs)/NeverEvents

– In FY15, top 25% in HACs will have payments reduced by 1%

February 7, 2014


Value: PVBP

PVBP: Physician Value-Based Purchasing

• Physician feedback program

– Individual reports on resource use and quality of careas compared to peer group

• Physician value-based payment modifier

– Phased in between 2015 and 2017

– 2014 performance determines 2016 modifier

– Budget neutral

– wRVU x conversion factor x VBPM

• Positive number = paid more

• Negative number = paid less

February 7, 2014


PVBP vs. SGR

February 7, 2014


Sustainable Growth Rate(“SGR”) Fix

• On October 30, 2013 the Senate Finance Committee and the HouseWays and Means Committee released a discussion draft of a SGR fix,offering a comprehensive approach to MPFS payment reform.

• Key provisions include:

– Payment freeze

– Termination of payment penalty programs (PQRS, MU)

– New value-based performance (VBP) program

– Alternative payment model (“APM”) participation

– Complex chronic care management

– Appropriate use criteria

– Valuation of services

February 7, 2014


Physician Quality Reporting System(PQRS)

• 2014: 201 quality measure available forreporting

• Paid for reporting (pay-for-reporting or P4R),not attaining certain scores (pay-for-performance or P4P)

• Carrots followed by sticks

– 0.5% bonus for 2012-2014

– 1.5% penalty for 2015

– 2.0% penalty for 2016 and thereafter

February 7, 2014


PQRS: How Patients are Identified

Patients whose care you directed: you billed 35% or moreof all their outpatient E&M visits

Patients whose care you influenced: you billed less than35% of outpatient E&M visits but 20% or more of theircosts

Patients whose care you contributed are those you billedless than 35% of visits and less than 20% of their total cost

February 7, 2014


Tiered Value-Based Payment ModifierAssessment Low Cost Average Cost High Cost

High Quality 2.0%* 1.0%* 0.0%

AverageQuality

1.0%* 0.0% -0.5%

Low Quality 0.0% -0.5% -1.0%

* Physicians who score in these categories who treat high-risk beneficiaries could receive an additional one percentage point in bonus money.

Source: Proposed 2013 physician fee schedule, Centers for Medicare & Medicaid Services, Federal Register, July 30.

February 7, 2014


Other Forms of PQI

Meaningful Use Incentives/Penalties

- Stage One objectives and clinical quality measures

- Stage 2 delayed – if attested Stage 1 in 2011 attestStage 2 in 2014 (instead of 2013)

- 1% penalty in 2015 if not MU in 2014; 2% in 2016; 3% in2017; 4% in 2018 or 2019

Electronic Prescription Incentive Program

- 2.0% penalty in 2014 unless used eRx 10x by 06/30/13(only receive 98% of Medicare Part B PFS amount forcovered professional service in 2014)

MU

eRx

February 7, 2014


Fundamentals DrivingClinical Integration

February 7, 2014


Defining Clinical Integration

February 7, 2014


Plotting Your Course on the way toManaging Population Health

February 7, 2014


PCMHPCMH: Patient-Centered Medical Home

• Improves primary care through patient-centered care, cooperation among physicians,and coordination and tracking care over time

• Facilitates partnerships among patients, theirphysicians and the patient’s family members

• Care is facilitated by registries, healthinformation technology (HIT), healthinformation exchange (HIE), etc. to ensurethat patients receive the appropriate care atthe appropriate time in the appropriate manner

Patient-Centered MedicalHome


+ Coordinated Care

+ $ for Coordinated Care

February 7, 2014


IPA: Independent Practice association

• Association of medical doctors(primary care physicians andspecialists) and other healthcareprofessionals that have contractedwith most PPO, POS, and HMOinsurance plans

IPA

Specialist

Physician

Physician


February 7, 2014


PHO

PrimaryCare

PhysicianSpecialist

Physician

PHO: Physician Hospital Organization

• Joint venture between hospital(s)and physician group(s)

• Acts as a single agent for managedcare contracting

• Aligns interests of hospitals andphysicians but allows each to retainautonomy

• Opportunity to act as a vehicle toadvance clinical integration networkinitiatives

Physician

February 7, 2014


CIN

What is a CIN?

A network of physicians working in collaboration with a hospital, usinga performance management infrastructure to develop and implementinitiatives to improve the quality and efficiency of healthcare services

Network negotiates and contracts with payers for improvedreimbursement based on quality and efficiency

February 7, 2014


Understanding BasicCIN Economics

February 7, 2014


What Does a CIN Do?

February 7, 2014


ACO: Accountable Care Organization

• “Under the program, primary care physicians areencouraged to join together with other providers to takeresponsibility for the full continuum of their primary carepatients’ care.”

• “[Physicians] must commit to reporting comprehensivemeasures of the quality and -- eventually -- outcomes ofcare. If they are able to improve quality and therebyreduce costs, they will receive a share of the savingsachieved.”

• “The term “accountable” is intended to mean just that;ACOs should only receive additional payments to theextent that they are demonstrably improving care for theirpatients.”

ACO

– The Dartmouth Atlas of Health Care –

February 7, 2014


MSSP ACOMSSP ACO: Medicare Shared Savings Program ACO

• Clinically integrated networks that have contracted withCMS to share in whatever money the community saves

– To be eligible for shared savings, must meetminimum performance standards for 33 ACO qualitymeasures.

– How do we know if they have “saved”?

– CMS reviews the historic costs of the patients in thenetwork and uses that as the baseline to determinesavings.

– As of January 1, 2014, 343 MSSP ACOs approvedby CMS.

February 7, 2014


MSSP ACO FunctionsWhat Really Matters

Establish and maintainquality assurance andimprovement program

Promote evidence-basedmedicine, patientengagement, care

coordination, patient-centeredness

Compile and reportparticipants’ quality

measure scores

Distribute shared savingsand assess shared losses

February 7, 2014


Each ACO participant continues to bill fee-for-service independently

Eligibility for and level of shared savings based on performance score

Calculate actual annual Medicare spent for assigned beneficiariesagainst pre-determined benchmark

Apply formula to determine share of savings (losses)

Calculating Shared Savings/Losses

February 7, 2014


Episode 1: Hip Replacement

• Orthopedic Surgeon• Surgery

o Anesthesiao Pathology

• Acute Care• Rehabilitation Facility

o PT

BPPBPP: Bundled PaymentProgram

• A single “bundled”payment covers the entirerange of servicesdelivered by two or morehealthcare providers thatare rendered during asingle episode of care orover a specified timeperiod

Single payment

- payment

- payment

- payment

- payment

- payment

- payment

February 7, 2014


Success in Bundling forEpisodes of Care

SuccessfulBundling forepisode of

care

Decrease Costs• Financial/Gain-

sharing Model

CreateEfficiencies

• Re-design CareModel

Improve Care• Quality Focus

February 7, 2014


What is Next?

February 7, 2014


Other InterestingDevelopments/Disruptions

• Gamification

• Big Data

• Quantified Self Movement

• Nanomedicine

• Digital Medicine

February 7, 2014


Questions?

February 7, 2014


Terms

ACO Accountable Care Organization

BPP Bundled Payment Program

CIN Clinical Integrated Network

eRx Electronic Prescription

FFS Fee-for-Service

HACs Hospital Acquired Conditions

HIE Health Information Exchange

HIT Health Information Technology

HVBP Hospital Value-Based Purchasing

IPA Independent Practice Association

IQR Inpatient Quality Reporting

MSSP Medicare Shared Savings Program

MU Meaningful Use

P4P Pay-for-Performance

P4R Pay-for-Reporting

PCMH Patient Centered Medical Home

PHO Physician Hospital Organization

PQI Physician Quality Incentives

PQRS Patient Quality Reporting System

PQRS Physician Quality Reporting System

PVBP Physician Value-Based Purchasing

VBP Value-Based Purchasing

February 7, 2014


Thank you!

David McMillan

Principal

PYA

[email protected]

865-673-0844

mailto:[email protected]

learning the new language of healthcare

Health & Medicine