Quality and Finance: The Stars Align

1. Friday the 13th August, 2010 Quality and Finance: The Stars Align Jason Sanders, Budget and Reimbursement, Sisters of Charity Providence Lori August, Director of Quality, Sisters of Charity Providence Karen Reeves, VP Quality Compliance and Risk Management, SCHA Barney Osborne, VP Finance, SCHA

2. Institute of Medicine and AHRQ RHQDAPU and HCAHPS Pay for Reporting Never Events Hospital Acquired Conditions Quality and Finance: The Stars Align MS DRGs ObamaCare… ARRA HITECH Meaningful Use Value Based Purchasing Bundling 30 Day Readmissions Medicaid HACs

3. American Recovery and Reinvestment Act of 2009 (ARRA)

4. ARRA 2011 - 2012 • Facility base rate of hospital’s Medicare/Medicaid percent of $2,000,000 • $200 per discharge between 1,149 and 23,000 BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

5. ARRA 2011 - 2012 The criteria for meaningful use will be staged in three steps over the course of the next five years • Stage 1 sets the baseline for electronic data capture and information sharing. • Stage 2 (est. 2013) and Stage 3 (est. 2015) will continue to expand on this baseline and be developed through future rule making. BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

6. ARRA 2011 - 2012 For Eligible Professionals, there are a total of 25 meaningful use objectives. 20 of the objectives must be completed to qualify for an incentive payment. 15 are core objectives that are required, and the remaining 5 objectives may be chosen from the list of 10 menu set objectives. For Eligible Hospitals, there are a total of 23 meaningful use objectives. 14 are core objectives that are required, and the remaining 5 objectives may be chosen from the list of 10 menu set objectives. https://www.cms.gov/EHRIncentivePrograms/35_Meaningful_Use.asp

7. ARRA 2011 - 2012 The Recovery Act specifies three main components of Meaningful Use in Stage 1: • The use of a certified EHR in a meaningful manner (e.g.: e-Prescribing); • The use of certified EHR technology for electronic exchange of health information to improve quality of health care; and • The use of certified EHR technology to submit clinical quality and other measures. BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

8. BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

9. BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

10. The Patient Protection and Affordable Care Act (PPAC)

11. Health Care Reform Act 2013 Senate Committee Apr. 29, 2009, Page 4 Hospitals that meet or exceed performance standards would receive value-based “bonus” payments. The incentive payments would apply to all MS-DRGs under which a hospital provides services.

12. PPAC 2010 • Support comparative effectiveness research by establishing a non-profit Patient-Centered Outcomes Research Institute. • Reauthorize and amend the Indian Health Care Improvement Act. BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

13. PPAC 2011 • Prohibit federal payments to states for Medicaid services related to health care acquired conditions. • Develop a national quality improvement strategy that includes priorities to improve the delivery of health care services, patient health outcomes, and population health. • Prohibit federal payments to states for Medicaid services related to health care acquired conditions. BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

14. PPAC 2011 • Rewards physicians for participation in the Physician Quality Reporting Initiative (PQRI). BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

15. PPAC 2012 • Allow providers organized as accountable care organizations (ACOs) that voluntarily meet quality thresholds to share in the cost savings they achieve for the Medicare program. • Reduce Medicare payments that would otherwise be made to hospitals by specified percentages to account for excess (preventable) hospital readmissions. BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

16. PPAC 2012 • Reduce annual market basket updates for home health agencies, skilled nursing facilities, hospices, and other Medicare providers based on VBP program protocol. • Establish an acute hospital value-based purchasing program in Medicare on or after October 1, 2012. • The baseline data for the initial FFY 2013 calculation in 2013 is April 1, 2010 to March 31, 2011. • The measurement data for FFY 2013 calculations is April 1, 2011 to March 31, 2012. BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

17. PPAC 2012 • Develop plans to implement value-based purchasing programs for skilled nursing facilities, home health agencies, and ambulatory surgical centers. • Establish VBP demonstration programs for CAHs and hospitals excluded from the VBP program because of insufficient volumes. BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

18. PPAC 2012 • Develop plans to implement value-based purchasing programs for skilled nursing facilities, home health agencies, and ambulatory surgical centers. • Establish VBP demonstration programs for CAHs and hospitals excluded from the VBP program because of insufficient volumes. BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

19. PPAC 2012 …the law includes a newhospital readmission policy to address the fact that nearly20% of Medicare patients are readmitted within 30 days. More than half ofthese readmitted patients have not seen their physician betweendischarge and readmission, and a recent study suggests thatbetter coordination of care can reduce readmission rates formajor chronic illness. The policy provides $500 million over5 years to manage care for 30 days after hospital dischargeand also imposes payment penalties on hospitals with high risk-adjustedreadmission rates for certain conditions. The New England Journal of Medicine Posted by NEJM • June 16th, 2010 Peter R. Orszag, Ph.D., and Ezekiel J. Emanuel, M.D., Ph.D.

20. South Carolina Medicaid • HACs structured by MS-DRG, SC Medicaid still codes by Medicare DRG codes. Since FFS pays per diem, current MMIS could not simply remove the HAC and recalculate the DRG. • Plan is for a third party to crosswalk the DRG to a MS-DRG, recalculate without the HAC and take a percent of total to the original total and apply that percentage to the per diem. • Mandatory MCOs will not completely solve the problem. MHNs remain FFS. BASED ON: HEALTH REFORM IMPLEMENTATION TIMELINE, THE HENRY J. KAISER FAMILY FOUNDATION

21. The South Carolina Hospital Association Value Based Care Pilot Project Funding provided by The University of South Carolina Arnold School of Public Health Centers for Health Policies and Policy Research A²HA Finance Spring Meeting, March 22, 2010 A²HA Quality Spring Meeting, May 24, 2010 Barney Osborne and Karen Reeves

22. Observations Lack of “actionable data” • MySCHospital.org and HospitalCompare data is too old to be used to resolve real-time problems • High cost of quality data tracking systems • No cooperation from vendors • No peer comparisons outside of purchased reports or multi-hospital systems

23. Observations “Ahead of your time” Michael T. Rapp, MD, JD, FACEP Office of Clinical Standards and QualityCenters for Medicare & Medicaid ServicesDepartment of Health & Human ServicesBaltimore, MDmichael.rapp@cms.hhs.gov

24. The South Carolina Hospital Association Value Based Care Pilot Project Funding provided by The University of South Carolina Arnold School of Public Health Centers for Health Policies and Policy Research Outcomes

25. SCHA White Paper

26. New Quarterly VBP Reports

27. RHQDAPU Scores

28. HCAHPS Scores

29. CMS Model

30. Senate Model

31. Problems with current reports • Age of data-No longer actionable • Only preparing and reporting quarterly • Hospitals are not tracking and trending concurrently • Hospitals with purchased software have data available but don’t use it • Small hospitals can’t afford software

32. VBC Pilot Reports

33. Actual Chart Extracted Data

34. Scoring Base Period National Scores (CMS Data) Hospital Base Period Scores (CMS Data) Actual Scores for Period (From your worksheet) Score Achieved From Scoring Period Data Scoring Period Improvement from Base Period Higher of Attainment or Improvement

35. Case count < 100 is not computed Improvement does not apply once Attainment is maxed out at 10 Higher of Attainment or Improvement

36. Attainment Score (Period Performance - Threshold) / (Benchmark-Threshold) x 10 The amount you exceeded the threshold compared to the amount the national benchmark exceeded the threshold

37. Improvement Score (Period Performance – Base Period Performance) / (Benchmark-Threshold) x 10 The amount of your improvement from base compared to the amount the national benchmark exceeded your base period

38. Percentage recovery of 2% Withhold CMS Model

39. Translating Performance Score into Incentive Payment: Example Full Incentive Earned Penalties Hospital A 57% performance 76% Reimbursement Percent Of VBP Incentive Payment Earned Hospital Performance Score: % Of Points Earned Source: CMS’ Progress Toward Implementing Value-Based Purchasing: Lisa Graberth 18

40. Budget Neutrality Full Incentive Earned Translating Performance Score into Incentive Payment: Example Savings due to penalties No Bonuses ? Percent Of VBP Incentive Payment Earned Hospital Performance Score: % Of Points Earned Source: CMS’ Progress Toward Implementing Value-Based Purchasing: Lisa Graberth 18

41. Percentage recovery of 2% Withhold Senate Model

42. Budget Neutrality Translating Performance Score into Incentive Payment: Example Full Incentive Earned No Bonuses ? Savings due to penalties Percent Of VBP Incentive Payment Earned Hospital Performance Score: % Of Points Earned Source: CMS’ Progress Toward Implementing Value-Based Purchasing: Lisa Graberth 18

43. Benefits of Pilot Reports • Easy to use • Minimum time and effort • Real-time tracking • Real-time score estimations • Real-time reporting • Basic core measure evaluation tool • Financial impact estimations

44. Problems with Pilot Reports • Manual input • Lack of final CMS protocol: • Can only track RHQDAPU data as HCAHPS is unavailable to the hospitals • Can’t establish exact financial protocol

45. Jason’s Sanders, Reimbursement and Budget Analyst

46. The VBP time bomb... …the clock is already ticking.

47. Data Application Baseline Period For Comparative data to use as a based for measuring improvement Measurement Period For determination of current score Application Period Calculated adjustment applied to reimbursement

48. Data Application Measurement Data: 2011 Score Determinations: 2012 2013 Application U.S. Department of Health and Human Services REPORT TO CONGRESS: Plan to Implement a Medicare Hospital Value-Based Purchasing Program November 21, 2007

50. South Carolina Rankings