PPS and P4P: Understanding the Alphabet Soup

1. PPS and P4P:Understanding the Alphabet Soup CDR Maureen Padden MD MPH FAAFP Deputy Chief of Staff Navy Medicine National Capital Area

2. Objectives Review the elements of PPS and relation to funding Understand P4P and the payout scheme Relate these incentives to the Medical Home Consider how to re-engineer your practice to be efficient, productive, patient focused and succeed under PPS and P4P 

3. Realities of Today Resources (money and people) are tight US healthcare costs are four times that spent on National Defense Line Commanders note rising health care costs claim significant portions of their budgets Resource allocation in the future will receive considerable scrutiny The stakes for MTF Commanders are high

4. The Big Picture Core mission: Keep fighting forces ready. Care for service members and their families Patient and family centered care Regular source for primary care has been shown to improve satisfaction and health outcomes Healthy primary care infrastructure Referral base for subspecialty and inpatient care. Necessary to maintain high quality GME programs. Shown to reduce overall costs

5. Concept of Operations SherrySherry

6. PPS Financial reimbursement for work produced (fee for service) Rates based on price at which care can be purchased in the local area: RVU�s RWP�s Mental Health Bed Days Computed at MTF level but rolled up before allocation to services Reconciliation quarterly at service level

7. TMAC versus PPS Civilian Inpatient Institutional Hospital (DRG) Including ancillaries, pharmacy Professional (RVU) Surgeon Anesthesiologist Rounds Consultants Outpatient Professional (RVU) Institutional (APC) Outpatient Ancillary (RVU) Direct Care PPS Inpatient (RWP, i.e. DRG) All Institutional and Professional Hospital Including ancillaries, pharmacy Surgeon Anesthesiologist Internist Consultants Outpatient (RVU) Professional No institutional (Pass Thru) Except Emergency Room Outpatient Ancillary (Pass Thru) None

8. Valuing MHS Workload - Fee for Service Rates (FY09) Value per RWP - $8,797 (MEPRS A codes)* Average amount allowed Including institutional and professional fees Excluding MH/SA Adjusted for local Wage index and Indirect Medical Education Adjustment (IME) *Case Mix Index adjustment FY08/09 +1.4% (Rate change $8,677) Value per Mental Health Beddays - $753 (MEPRS A codes) Average amount allowed Including institutional and professional fees Adjusted for local Wage index and Indirect Medical Education Adjustment (IME) Value per RVU - $90 (MEPRS B codes) Average amount allowed Segmented by Specialty Excluding Ancillary, Home Health, Facility Charges (except ER) Adjusted for local Wage index

9. FY 2009 PPS Budget Adjustment Military Personnel PPS value includes work produced with military personnel However, MilPers is not in the DHP in year of execution Adjustment = O&M Adjustment * (Difference between Business Plan/Most Recent 12 Months Value and FY07 Workload Valued at FY2009 Rates) Note: Changed Baseline Year from 2003 to 2007

13. MTF Business Planning Model SherrySherry

14. Domains and Measures for Phase One of Pay for Performance Quality HEDIS Preventive Services ORYX Satisfaction Health Plan Health Care Doctor�s Communication Access Getting Needed Care PCM appointment when available 3rd next appointment 14

15. Quality Adherence to HEDIS Guidelines HEDIS Cancer Screening, Asthma Controller Meds, Diabetic control and practice 50th and 90th civilian percentiles $5/$10 Relevant enrollees Adherence to ORYX clinical practice guidelines CAC, SCIP measures, AMI measures, CHF measures ORYX benchmark $400 per patient that meets the benchmark per month Relevant patients Example: For a hospital with 40,000 enrollees there may be 1000 diabetics. If that hospital meets the 90th percentile for HgB A1C screening then the hospital would get an additional 1000*$10 = $10,000 per month in operating funds. 15

16. Satisfaction Health Plan % Satisfied (8,9,10) with Health Plan Internal DoD 50th, Civilian average $10, $25 Enrollees Health Care % Satisfied (8,9,10) with Health Care Internal DoD 50th, 90th percentile, Civilian average $1, $3, $5 Visits Doctor�s Communication % Response falling in best category (Always) with Doctor�s Communication* Internal DoD 50th, 90th percentile, Civilian average $1, $3, $5 Visits 16

17. Access Access to Needed Care % Response falling in best category (Not a Problem) with Access to Needed Care* Internal DoD 50th, 90th percentile, Civilian average $10, $30, $50 Enrollees 3rd next appointment % of days when 3rd next appointment is within access standards for acute (1 day), routine (7 days), and well (28 days) Internal DoD 50th, 90th percentile $1, $3 Primary care Appointments PCM appointment when available % of appointments when PCM is available that are with the enrollees PCM Internal DoD 50th, 90th percentile $1, $3 Primary Care Visits 17

18. FY08 Summary

19. Challenges The �law of unintended consequences� Balance of access versus continuity versus quality versus cost Don�t incentivize �bad behavior�; �gaming� the system The �perfect being the enemy of the good� Start the program and the quality of data will improve Start the program and the �poor� metrics will be identified Where do you apply the reward? The hospital The clinic The individual The patient How do you sustain balanced performance in the long term? When to change to a new P4P focus Readiness, Publications, etc 19

20. Patient Centered Medical Home (PCMH) Patients have a relationship their personal physician Practice-based care team takes collective responsibility for patients' ongoing care Care team is responsible for providing and arranging for the health care needs of all patients Patients can expect care to be coordinated across care settings and disciplines Quality is measured / improved as part of daily work flow Patients experience enhanced access and communication Practice uses EHRs, registries, and other clinical support systems Practice model is intended to improve outcomes while realizing cost savings In civilian medicine, PCMH has emerged as a metaphor for payment reform

22. P4P measures are intended to reward MTF�s who successfully implement the PCMH concept The parallels are undeniable Aimed at: -Access -Quality -Satisfaction P4P is gravy

23. How do you get there? Clinical Business Reengineering Who does what in your practice? Disease management strategies: Proactive approach to care Use of pharmacists and other extended providers Reduce unnecessary re-work Leverage information support Expand use of ancillary support staff Maximize use of physicians for work that requires their expertise

24. Improve Efficiency of Primary Care Right size empanelment to PCM availability Incorporate the medical home concepts Scrutinize and manage clinic templates Aggressively seek continuity for routine care Appointing business rules: Promote continuity with PCM Avoid unnecessary appointments (labs, consults) Leverage RN�s and CPG�s when appropriate Open access especially for acute care

25. Traditional Work Flow Design

26. Parallel Work Flow Design

27. PCMH Pilot at NNMC Medical Home project begun June 2008 Program has already begun to show improvements in: PCM continuity Access to care Evidence-based healthcare metrics Medical Home implementation in the civilian sector has consistently been shown to improve outcomes, reduce costs and utilization of healthcare services while improving access and patient satisfaction NNMC is providing valuable information as a blueprint for wider adoption in MHS

28. PCM Continuity 13 Sep 08 � 3 Jan 09

36. What We Know Cornerstones of success for the Medical Home: PCM Continuity Leveraging advanced IT / electronic systems Re-engineering / training of healthcare team Implementation of the Medical Home concept must attend to and incorporate facets of each of these principles to achieve success Reward: Improved access, satisfaction, health outcomes and reduced costs through care coordination and communication

37. Needs of the population should drive business planning What should not: -Current resource structure -Staff centered approach

38. Primary Care Base What resources do you actually have? What is their availability after MENBA? Utilization rates and demand of population? Should you be doing more or less? What do you need to get there? Strategic reinvestment of resources: Promote the Medical Home concepts Improve access to care and patient satisfaction Should reduce capitated costs over time

39. Final Thoughts Business Planning involves strategies that focus on healthy outcomes and patient satisfaction. More than just RVUs/RWPs Reimbursement strategies in the future will emphasize both. Pay for performance will measure performance in outcomes and satisfaction Hitting this target will requires a strategy that ensures a primary care infrastructure founded in a well resourced Medical Home with appropriate subspecialty care support. MTF Commanders must continuously re-assess performance and reinvest resources as necessary to meet the needs of the population.